Yes - it makes private insurance an added luxury product. This is normally how it works where there is a publicly funded universal system. On the other hand the public insurance covers many expensive things very well (e.g cancer treatment) so the private insurance is for things like getting a knee surgery without waiting time where the public system can have 90 days waiting time. Someone like an athlete wouldn’t want to wait that long but for most people it’s acceptable if it keeps premiums (taxes) lower.
The “paying twice for the same thing” is a feature, not a bug. Most people wouldn’t do that of course, meaning they would simply get rid of their private insurance.
It makes it inefficient in economic terms. I think you are attempting to frame it in terms of cost-shifting: making the "rich" pay for "the poor" by paying twice.
But when the public hospital is 10 miles away, and the private hospital is 1 mile away, paying twice effectively lowers the access of care to the people that can't afford to pay twice.
And then, proximity to public hospitals would be so valuable, that housing prices would icnrease close to the best public hospitals, and the richer will again take profit of it, just like it happens with zone-dependent schools.
Doesn't that type of inefficiency already exist when a patient may need (or want) to go to a "network hospital", when there are multiple competing networks instead of one enormous one (that has say 95% of the "market")?
> paying twice effectively lowers the access of care to the people that can't afford to pay twice
My private insurance that kicks in if I e.g. need a knee surgery with 14 days wait instead of 90, will often require me to fly to a different city, likely even a different country, to get the procedure performed at a specialist private clinic. This care is something completely different to the regular care I need day-to-day for a child delivery, cancer treatment, appendectomy or whatever. As there is so very little overlap I'm also not paying twice. There isn't a private insurer that will offer me cancer treatment, child delivery etc.
They don't exist because who would want to pay twice for that?
> Doesn't that type of inefficiency already exist when a patient may need (or want) to go to a "network hospital", when there are multiple competing networks instead of one enormous one (that has say 95% of the "market")?
Not really, because all the insurers typically insure all hospitals. By having multiple insurance companies, hospitals get bargaining power and lower what insurance can ask from them. If you had only one insurance, like the state, you have 3 possible solutions: its the same, it pays more than the competing system (overly generous and thus worse for the tax payer), it pays less (uses monopoly market power and reduces hospital size/supply)
Hospitals and insurance companies are in a bargaining fight constantly, and if you look at the numbers, hospitals have won. However, hospitals are 60%+ non-profit (60% non profit, 20% public, 20% profit hospitals), so its not so clear you want hospitals to lose. Its really messy.
> My private insurance that kicks in if I e.g. need a knee surgery with 14 days wait instead of 90, will often require me to fly to a different city, likely even a different country, to get the procedure performed at a specialist private clinic. This care is something completely different to the regular care I need day-to-day for a child delivery, cancer treatment, appendectomy or whatever. As there is so very little overlap I'm also not paying twice. There isn't a private insurer that will offer me cancer treatment, child delivery etc.
The main benefit of having a single insurance company, or single payer system, is that you dont have to spend so much moeny on administrative costs. If you start getting into the rabbit hole of what will be public or private, at what cost and quality, i suspect the gains from the administrative relief will fade. Economically, maybe the best thing about having a public/private system would be that the public system is dirt cheap and effective, while the private one is simply more expensive. Thus there is some component of redistribution, but also some market forces. I think hybrid beats full state owned (I accept my own ideological bias and maybe hybrid beats fully private, though I believe it wouldnt).
> They don't exist because who would want to pay twice for that?
As an example of this, I can speak of Argentina. Argentina has had a diminishing public expenditure of public funds to public health. It has a very decaying public health system, and a thriving private one. The private one does have price controls, but not too much in effective terms: they biggest cost threat is probably that patients could choose to not have private insurance and just go to a public hospital. The reality is however crude: some public health services are of terrible quality. But its a trade-off: poor people dont pay and receive quite the tax benefit as a whole. Private is thriving and has very good quality metrics at reasonable prices.
So yes, you can have a system with "double paying" that is definitely stable.
The “paying twice for the same thing” is a feature, not a bug. Most people wouldn’t do that of course, meaning they would simply get rid of their private insurance.