The history behind our current nonsensical scheme started with FDR capping wages during the great depression, which spurred companies to offer "perks" like healthcare to recruit talent. An example of one market intervention leading to another, and another, ad nauseam.
Totally agree that insurance should be decoupled from corporations. The way the "market" is regulated hampers people from working independently or starting small businesses because it's so damn expensive for individuals to pay for healthcare themselves.
1. FDR did not propose a wage cap until 1942, 3 years after the Great Depression had ended. It was a temporary wartime fundraising effort (and was quite popular with the public). In fact, health insurance really first came into existence during the Great Depression (mostly to ensure physicians and hospitals got paid).
2. FDR's wage cap did not pass.
What actually happened was the passing of the the Stabilization Act of 1942, which gave FDR a power (that he invoked) to freeze wages and salaries during the war. The freeze was deeply unpopular with the labor movement, who threatened mass strikes. As a compromise, congress exempted health insurance (and other benefits like PTO and pensions) from the freeze.
This was certainly a contributing factor (proportion of US population with healthcare roughly doubled from 1940 to 1945), but ignores the other factors that prompted the rise of employer sponsored healthcare. Indeed, by 1945, less than a quarter of Americans had health insurance.
Rather, the two largest contributors to employer-sponsored health insurance was the demand of health coverage by labor unions and the 1954 legislative change that made health insurance tax exempt.
The specifics of the American healthcare system aside, what leads you to believe that the problem is regulation? By essentially any metric, state provided (single-payer) healthcare is the best-known solution to the healthcare problem. Why is there any reason to believe that there's too much state intervention as opposed to, say, too little?
I think they meant the kinds of regulation, not the fact of regulation itself. In fact, it wouldn't surprise me if American healthcare had more regulation than the average European country.
> By essentially any metric, state provided (single-payer) healthcare is the best-known solution to the healthcare problem.
Except things like, you know, quality of care or satisfaction.
Single-payer healthcare beats the American implementation, which is not a high bar to clear.
There's a reason medical tourism to Mexico and India is so prevalent. Totally deregulated private doctors seem to kick the ass of state healthcare (in quality and wait times) and American healthcare (in cost). I wouldn't want to get, say, complicated brain surgery in Mexico; in that case, the tens of thousands of dollars premium you would pay, uninsured, for US care is probably worth it. But for routine medicine (dental care, minor surgery, etc.) it's medical tourism all the way. For certain kinds of medicine, people will even make medical visits to the US from socialized countries like Canada or France.
> There's a reason medical tourism to Mexico and India is so prevalent
Yes, and it's because labor is cheaper in these countries than in yours, because their standard of living is lower, and therefore living costs are cheaper.
So it's cheaper for you, because you come from a country with a higher standard of living, and your income is much higher than average in those countries. So for you, their prices are cheap. But for the locals, they're definitely not cheap.
If you switch to a completely private system in US, those doctors will want to be paid US wages, not Mexican or Indian wages. And then you'll find the cost of their services much less affordable.
> For certain kinds of medicine, people will even make medical visits to the US from socialized countries like Canada or France.
There was an actual study on Canadians coming to US for healthcare. The scope of it is vastly overblown, and the reasons are very different from what people often assume they are.
Nope, this is clearly wrong. Cost of labor and standard of living alone can't account for the cost difference. Average net-adjusted household disposable income is (per OECD) only 3x higher in the US than Mexico. GDPPC is 5x higher. Medical care in the US is drastically more expensive than these numbers would suggest. Claiming "it's because Mexico is poor" is a lazy argument that falls apart very quickly.
> doctors will want to be paid US wages, not Mexican or Indian wages. And then you'll find the cost of their services much less affordable.
Doctors already get paid US wages. Not really sure what you were thinking when you wrote that.
You're also wrong on two counts here; one, the primary cost sinks in the US that they don't have in Mexico are increased regulatory costs (meaning huge administrative staff), red tape (mostly around excessive malpractice and CYA requirements) leading to incredibly overpriced line items (e.g. $1500 to hook you up to an oxygen tank), and a weird incentive scheme where it makes economic sense for doctors to waste money on pointless CYA tasks like uneccesary medical scans and specialist consultations. Two, fully private doctors in the US are actually vastly cheaper if you pay in cash. I have shitty major medical insurance, so I just pay in cash for routine medicine (checkups, prescriptions, etc.). It ends up being a fraction of the cost of what I would pay with insurance at a public hospital. There are a lot of reasons it's so much cheaper, but the biggest is that getting money out of insurance companies is itself a huge money sink for doctors. Insurance companies can't afford to be good or easy anymore.
I don't dispute that care in US is more expensive for a variety of reasons.
But your post stated that the only, or at least the biggest, reason why that difference exists between US and Mexico is because of less regulation in the latter, and more healthy private market resulting from that. I point out that a large part of that difference does have to do with standard of living. It's not true just for healthcare - the same goes for most other things. It's why people from US often retire to those countries.
> Doctors already get paid US wages. Not really sure what you were thinking when you wrote that.
Of course, but they get paid out of your insurance. You were, again, comparing that system to going to a place like Mexico, and paying out of pocket. If you were to pay out of pocket here in US for those wages, it wouldn't really be affordable.
The problem is that you cannot have any sort of sensible health insurance on an unregulated market.
On an unregulated market, insurers would begin to drop people who get chronically sick, or land in risk groups.
Before you can say: "so just forbid dropping insured people" - that's what US initially did. But there was a simple loophole around that - you don't drop people per se. You just start a new insurance company, and offer a lower rate to the healthy people who want to sign in.
The healthy go to the new one. The sick stay with the old one. Old one's costs increase, they get pushed to the everyone who was left, to the level that is unsustainable, and either the sick leave too, or the company dissolves.
So you need more regulation preventing companies from only taking up healthy people. But you can't go overboard, because if a sick person can sign up at will, people will only seek insurance when they get sick.
And you end up with the clusterfuck that US is right now. Which they are exactly for the reason of trying to avoid government intervention and government-set prices for services.
And then you have medical companies and doctors, who invent a new treatment, and the insurance is obliged to cover that treatment. So it's complicated negotiations there too. Without government interference, the medical companies have no incentive to keep the costs down really.
On the other hand, you - as a patient - probably don't want the government to tell private medical companies how much to charge for what. That's a new kind of problem altogether.
You don't need industry-specific regulations to prevent insurance fraud; you just need to enforce insurance contracts. If you're worried about becoming a huge medical cost in 20 years, find an insurance company that's willing to go into an n-year preset-rate contract. You might pay a premium corresponding to the increased risk on the part of the insurance company, but if insurance companies were allowed to do this and people wanted it, the correct price would be found sooner rather than later.
Insurance companies already do something like this. It's called "long term care insurance" and it is entirely separate from normal health insurance which they don't want to place on a multi-year contract because the health care costs themselves are changing too much year-to-year for it to be viable.
Car insurance is a two tier market and full insurance is not mandatory. So people who are way too risky do without, or they just don't get their own car. You can't do the same thing with your health.
I personally find Indian capitalistic medical care equivalent to the US. Under most circumstances (i.e., I don't need a super specialist who happens to be located elsewhere) I'll always choose to have work done here in India.
I've made this choice before and never regretted it. You can read about a description of my spine surgery if you like:
Similarly, I messed up my wrist a month ago while I was in the US. I waited until I got to India to even bother with a doctor - too much hassle in the US ("no I don't want narcotics, just tell me how to fix it") whereas over here I just swiped a credit card. Unlike in the US, I even knew the price before I bought services!
(Any doctor/hospital who won't tell you the price will get no business - that's capitalism + cost conscious consumers for you.)
> I personally find Indian capitalistic medical care equivalent to the US
Having had multiple friends and relatives get treated for identical diseases and/or undergo identical treatments between the United States and India, I respectfully disagree. Survival, technology, training and quality of care are undoubtedly higher in America.
Comparing averages, I agree. Most of India is rural poverty, with few good hospitals. Or, for that matter, few good toilets.
Comparing the places available to me - an upper middle class professional - I strongly prefer India. Spine surgery cost me 1 month of the average Indian software engineer's salary (vs easily 1 year of salary in the US), and quality was equivalent.
My doctor was as good as any in the UK (he was licensed to practice there, in fact), he just came back home for family reasons.
Nope, it's also better for the vast majority of medicine. Have you ever used Mexican private healthcare? I have! Customer service and convenience is through the roof compared to US healthcare.
> I rest my case.
Not a very good case!
The reason you wouldn't want to get complicated surgery in Mexico is that they don't have as many medical specialists, or as much equipment. The US is richer and has better schooling, so we have a huge supply of experts and medical technology. For the cutting edge of medicine, the benefit of having this outweighs the costs of receiving care in the US.
However, almost all medicine is simple and doesn't require a particle accelerator or superconductors or whatever else you can find in cutting-edge American medicine.
I wouldn't buy a radiation-hardened satellite microprocessor from China, but I'm perfectly happy to buy a Chinese laptop!
The reason is that what you pay for "cheap" service is actually the premium service over there. Super expensive private hospital in US would provide as good customer service.
Case in point in north Texas: Witness the staggering difference between the specialty hospitals that have cropped up like weeds over the past decade (many of them are clustered around the larger hospitals in places like Plano and Denton) versus, say, the public and not-for-profit hospitals that must take all comers.
Most of these specialty hospitals oh-so-carefully do not offer "Emergency Services" (as in, they don't staff a room called an "emergency room" even though they, conveniently, have an ambulance bay and are staffed 24/7) so they don't have to accept Medicare or several of the known-to-pay-on-the-low-side private insurance plans.
Meanwhile, Parkland, JPS, Baylor, and UTSW get to deal with the "cast-offs" who have no other choice.
Yep, you can get luxury suites at hospitals in the US; and they'll serve your every whim. And that "better customer service" often results in worse medical care. Just google "VIP syndrome" and see tons of examples where it appears that this "better customer service" of deviating from procedure killed these VIPs.
That doesn't make sense. The cost of goods doesn't magically scale linearly with GDPPC, even service-heavy goods. Even if it did, that wouldn't be a valid explanation. According to the OECD, average net-adjusted household disposable income is only 3x higher in the US than Mexico, but our medical care is many times more expensive than that.
US medical care is much much more expensive than most, if not all, developed world. I'm too lazy for google for source, but there was statistics that US gdp/capita medical expenses are like 2x next country. Even in super expensive countries doctors don't earn as much which is part of the issue.
I'm from rather cheap European country. We're on the receiving end of medical tourism. To cut costs, private hospitals save wherever they can. Nurses (as well as junior doctors) are paid less (gdp-adjusted) than in richer countries. Corners are cut in non-essential (parts of) procedures. Behind-the-scenes equipment is outdated. Anything customer-facing is top notch though.
> Despite spending, by far, the largest amount on healthcare, the USA was among the 10 OECD countries with the lowest life expectancy.
What you propose will make it more expensive, and doesn't seem to address anything around patient safety or efficiacy of treatment. You will end up with nicer carpets and comfier chairs in the waiting rooms. The US medical system is currently risk averse, which leads to a lot of over-diagnosis and over treatment, which cause harm.
Mexico health care is doing very poorly [1] and they've switched to single-payer euro-style system recently [2]. India is switching to single-payer too [3]. Their current numbers don't look nice either.
I'm referring to the separate, private medical industry in Mexico, not the horrible state-managed medical system. But you're right; medical systems with heavy government involvement are usually bad.
But regular Mexicans don't go to those private hospitals. Actually Mexico is now introducing more gov involvement to fix things. They were much more lax before.
Btw, single-payer health care is going pretty well over there in Europe...
If America completely deregulated the medical industry then where would you get that complex brain surgery? It doesn't sound like completely deregulated markets cater to that speciality.
It sounds great until you need something that isn't routine.
Speaking from experience, it's easier to get non-routine procedures done in France than in the USA. This is because the provider is less concerned with profitability of the technique.
So no. It's especially great when you need something that isn't routine.
You're claiming that "totally deregulated private doctors" are better in terms of cost and service than any other system, but you can't give a single instance of a first world system that does this. More than that, you seem to be cherry picking the best of the examples you did give, which is not really helpful since the best in the U.S. (if you have a good insurance plan) is as good or better than these other countries.
India has some good healthcare in the major cities and major problems in the rural areas where many of its people live. Mexico is a public-private hybrid, like Australia and many other countries. Again, you can probably find excellent care in some urban areas which likely cater to medical tourists, but they do not match up to more advanced countries as far as high tech care goes.
If you can't give an apples-to-apples comparison for what you're advocating, then I don't see how helpful your example of "private being better" really is.
A big one is that there is a tax deduction for employer provided health insurance. So offering a decent health plan is more compensation than just handing over the cost of the plan (which would be taxed).
As far as how employer coverage can drive up individual costs, there are a couple of factors. One is that people with good health plans often don't pay attention to how much they cost, and often don't have much of a deductible, so they just use the medical system without paying too much attention to costs. That at least has the potential to drive medical prices up.
The other is that people in the group insurance market tend to be somewhat healthier than the individual market. So the pool for individual insurance is more expensive to insure. Setting aside discussions about whether it is fair or not, it does result in higher costs for the individual market.
The reasons that you have given might be part of the explanation, but on their own they do not explain it.
Yes, it is true that there is a tax benefit to employers purchasing healthcare insurance, which is tax deductible, and providing it as a benefit in kind.
However, it does not follow at all from that the insurers should benefit: their costs are not affected and in a competitive market, they would price at marginal cost.
Yes, it is true that people in employer plans could be perceived as being a better risk than those who are do not have them.
They would still be better risks (and 'deserving' of a lower premium) however they obtained their health insurance.
So, as I said before, there must be something else going on.
Similar arguments apply to your claim that employers are less price sensitive than consumers - that really is implausible, given their buying power and incentives to maximise profits.
Totally agree that insurance should be decoupled from corporations. The way the "market" is regulated hampers people from working independently or starting small businesses because it's so damn expensive for individuals to pay for healthcare themselves.