Single Payer

[CBB_Fan]

Medicare was signed into law on July 30th, 1965. The passage of medicare and subsequent fixes to medicare had a direct correlation to the explosion in health care costs.

Judging by national health expenditures, that does not appear to be the case. After taking national health expenditures from U.S. Centers for Medicare & Medicaid Services, putting those values in 2015 dollars, and dividing by population to get per capita numbers I get the following:

Year: Per Capita Healthcare Expenditure (% Change) in 2015 dollars
1960: 1205.42 (0.0%)
1961: 1255.69 (4.1%)
1962: 1333.4 (6.1%)
1963: 1416.08 (6.2%)
1964: 1529.9 (8.0%)
1965: 1622.47 (6.0%)
1966: 1710.29 (5.4%)
1967: 1842.6 (7.7%)
1968: 1981.58 (7.5%)
1969: 2099.69 (5.9%)
1970: 2222.26 (5.8%)
1971: 2330.48 (4.8%)
1972: 2504.02 (7.4%)
1973: 2589.44 (3.4%)
1974: 2618.89 (1.1%)
1975: 2718.95 (3.8%)
1976: 2917.01 (7.2%)
1977: 3088.01 (5.8%)
1978: 3189.45 (3.2%)
1979: 3212.82 (0.7%)
1980: 3231.65 (0.5%)
1981: 3365.45 (4.1%)
1982: 3540.92 (5.2%)
1983: 3743.47 (5.7%)
1984: 3917.48 (4.6%)
1985: 4100.25 (4.6%)
1986: 4274.74 (4.2%)
1987: 4447.38 (4.0%)
1988: 4746.66 (6.7%)
1989: 4993.11 (5.1%)
1990: 5240.46 (4.9%)
1991: 5420.83 (3.4%)
1992: 5624.64 (3.7%)
1993: 5783.89 (2.8%)
1994: 5878.22 (1.6%)
1995: 5966.3 (1.4%)
1996: 6024.34 (0.9%)
1997: 6149.71 (2.0%)
1998: 6335.66 (3.0%)
1999: 6516.87 (2.8%)
2000: 6681.05 (2.5%)
2001: 6982.05 (4.5%)
2002: 7462.03 (6.8%)
2003: 7850.53 (5.2%)
2004: 8125.26 (3.4%)
2005: 8312.13 (2.2%)
2006: 8496.45 (2.2%)
2007: 8712.96 (2.5%)
2008: 8684.61 (-0.3%)
2009: 8985.17 (3.4%)
2010: 9120.4 (1.5%)
2011: 9088.47 (-0.4%)
2012: 9189.47 (1.1%)
2013: 9256.8 (0.7%)
2014: 9521.4 (2.8%)
2015: 9989.4 (4.9%)



This shows that there wasn't some massive jump in 1966 after Medicare was signed into law. In fact, per capita expenses went down from 1964 > 1965 and from 1965 > 1966. And over time, the rate of expanding costs has decreased and largely normalized to to 2-3% over inflation (lower than the year over year increases before Medicare was enacted).

If this were tracked by major healthcare reforms, you would expect to see large spikes from 1966-1969 (Medicare), from 1986-1989 (COBRA), from 2003-2006 (BIPA), and from 2010 to 2013 (ACA) (there were also reforms that canceled out in 1996, 1997, and 2000). And yet none of those are significantly different from the years before or after.

[Kung Wu]

Judging by national health expenditures, that does not appear to be the case. After taking national health expenditures from U.S. Centers for Medicare & Medicaid Services, putting those values in 2015 dollars, and dividing by population to get per capita numbers I get the following:

Year: Per Capita Healthcare Expenditure (% Change) in 2015 dollars
1960: 1205.42 (0.0%)
1961: 1255.69 (4.1%)
...
2014: 9521.4 (2.8%)
2015: 9989.4 (4.9%)

This shows that there wasn't some massive jump in 1966 after Medicare was signed into law. In fact, per capita expenses went down from 1964 > 1965 and from 1965 > 1966. And over time, the rate of expanding costs has decreased and largely normalized to to 2-3% over inflation (lower than the year over year increases before Medicare was enacted).

If this were tracked by major healthcare reforms, you would expect to see large spikes from 1966-1969 (Medicare), from 1986-1989 (COBRA), from 2003-2006 (BIPA), and from 2010 to 2013 (ACA) (there were also reforms that canceled out in 1996, 1997, and 2000). And yet none of those are significantly different from the years before or after.

He didn't say there was a "massive jump". There was absolutely and clearly a change in the increase in healthcare costs and GDP spend starting around 1965. That chart is crystal clear.

You would NOT expect massive spikes from any of the reforms you posted. The damage was done when price controls were implemented ... everything else (except Obamacare) since then is an effort to stop the train from derailing -- and so far none of it has worked.

Obamacare is the ONE thing that was passed that made it worse, and you will see that in the graph when it's updated in a few years. You will see another slight shift up in the acceleration of the pricing problem. It will be much more subtle than the initial impact of the price controls -- and possibly not much of a shift because the massive increase deductibles may offset it.

[Aargh]

There have been some comments about the relative efficiency of government operations and how those relate to private operations. It's easy to see inefficiencies in places like tag offices because we all see the details of how something is done.

I was a tech writer for a MAJOR software company ($500 mill annual sales). We wrote documentation from the design specs. then we went over various documents used in creating the product. If we found any discrepancies, we did interviews with the heads of departments, who would routinely refer us to project managers. Sometimes we went all the way to the programmers to figure out what was actually going to be in the final product.

We found groups of programmers in different departments both spending months writing different applications that did the same thing and both departments thought their implementation was the one that would be used across all product lines in multiple applications. The production version contained neither.

We had stakeholders who defined terms to be used in development of multiple integrated packages. Programmers started workingon on that basis and we began developing documentation based on the design specs. When that same stakeholder group got together to spec the 3rd application that would share those definitions, they changed them and didn't even realize they had. That completely reversed the lines of flow in an incredibly complex security system. rewrites on two applications and the corresponding documentation were required.

I don't know what causes someone to think that inefficient employees in a DL office would be more efficient employees if the DL office was privatized. Kansas has privatized several State functions and improved efficiency is the opposite of what has happened.

[ShockCrazy]

He didn't say there was a "massive jump". There was absolutely and clearly a change in the increase in healthcare costs and GDP spend starting around 1965. That chart is crystal clear.

You would NOT expect massive spikes from any of the reforms you posted. The damage was done when price controls were implemented ... everything else (except Obamacare) since then is an effort to stop the train from derailing -- and so far none of it has worked.

Obamacare is the ONE thing that was passed that made it worse, and you will see that in the graph when it's updated in a few years. You will see another slight shift up in the acceleration of the pricing problem. It will be much more subtle than the initial impact of the price controls -- and possibly not much of a shift because the massive increase deductibles may offset it.

Spending went up but it's hard to calculate if absolute cost went up. Spending went up for many reasons. We are caring for more people, we are treating more things, we are treating things in new ways that may cost more but have higher efficacy. If I could see data on actual cost of service rising I'd but into arguments. Also yes the price controls did not work in the 70's but since 2009 spending per capita growth per capita has significantly slowed.

[Aargh]

Another example of private industry "efficiency". A good friend of mine works for Spirit. He's a senior machine operator. He got called in to work on a Sunday on a holiday weekend. That amounted to $70 an hour that he got paid that day.

He waited around a while and then got the part he was supposed to work on. He had to reject it because it was painted the wrong shade of green. The work he was going to do on the part would have removed the paint, but he wasn't allowed to accept it with the wrong color.

He sent it back to be repainted and called me, while making $70 an hour, to shoot the breeze while literally waiting for paint to dry.

It's easy to complain about government wasting tax dollars because we see government inaction (not a typo) every day. We don't see private industry inefficiencies. Even if we are in a position in our employment to see it, it's kind of a heavily enforced "unwritten rule" that you don't talk about it.

I don't think that government administering something is necessarily less efficient than having private enterprises administering it. It would seem that the profit motive would make private industry more efficient, but the power bases built in private industry can damage efficiencies. Department managers have the same incentives to protect territory and expand their influence as bureaucrats in government. People are people.

[CBB_Fan]

He didn't say there was a "massive jump". There was absolutely and clearly a change in the increase in healthcare costs and GDP spend starting around 1965. That chart is crystal clear.

You would NOT expect massive spikes from any of the reforms you posted. The damage was done when price controls were implemented ... everything else (except Obamacare) since then is an effort to stop the train from derailing -- and so far none of it has worked.

Obamacare is the ONE thing that was passed that made it worse, and you will see that in the graph when it's updated in a few years. You will see another slight shift up in the acceleration of the pricing problem. It will be much more subtle than the initial impact of the price controls -- and possibly not much of a shift because the massive increase deductibles may offset it.

There is absolutely no way you can make the case that there was a change in the increase in healthcare costs based on that table. Healthcare went up an average of 5.14%/year from 1961-1965 (more than it is going up today), 5.32%/year from 1966-1970, 3.65% from 1971-1975, and 2.66% from 1976-1980. It started picking up again in the 80s, which coincides more with the general interest rate spike at the time than it does with any social program. It seems to be common sense that if healthcare costs increased faster than inflation, then they would increase even more under higher inflation.

I will note that pre-1960 numbers are much harder to come by to give a more accurate estimation. At best guess healthcare spending per capita in 2015 dollars went from $830.88 in 1950 to $961.47 in 1955 to $1205.40 in 1960, giving 5 year increases of 2.72% and 4.05%. So the rate of increase was going up before 1965, and actually started going down after 1965. And again, I would put more stock in the idea that this is linked more to interest rates than health policy, as interest rates went up considerably during that time period while health policy stayed satic.

[wufan]

1. Does not necessarily follow. The current government healthcare system can be both relatively inefficient, AND gain from expanding coverage. For example, right now Medicaid and Medicare already has to negotiate with providers, adding more people under the coverage does not change or increase this load. There are likely other areas where this is the case as well.

It absolutely can gain efficiency from expanding. But the platform put forth by Mr Single Payer himself stated that they could add 250 million people to the program and remove all copays without adding any cost. This doesn't even include the approximate 1 trillion dollars in savings you'd expect by doing away with private health insurance. I don't buy that, thus we need to recognize that there is added expense to adding people and we need to discuss what is the added expense.

[wufan]

There have been some comments about the relative efficiency of government operations and how those relate to private operations. It's easy to see inefficiencies in places like tag offices because we all see the details of how something is done.

I was a tech writer for a MAJOR software company ($500 mill annual sales). We wrote documentation from the design specs. then we went over various documents used in creating the product. If we found any discrepancies, we did interviews with the heads of departments, who would routinely refer us to project managers. Sometimes we went all the way to the programmers to figure out what was actually going to be in the final product.

We found groups of programmers in different departments both spending months writing different applications that did the same thing and both departments thought their implementation was the one that would be used across all product lines in multiple applications. The production version contained neither.

We had stakeholders who defined terms to be used in development of multiple integrated packages. Programmers started workingon on that basis and we began developing documentation based on the design specs. When that same stakeholder group got together to spec the 3rd application that would share those definitions, they changed them and didn't even realize they had. That completely reversed the lines of flow in an incredibly complex security system. rewrites on two applications and the corresponding documentation were required.

I don't know what causes someone to think that inefficient employees in a DL office would be more efficient employees if the DL office was privatized. Kansas has privatized several State functions and improved efficiency is the opposite of what has happened.

So...recognizing that both government and private industries have inefficiencies, which one is more likely to strive to gain efficiency? What motives do the two groups have to drive efficiency, how are they controlled, and which one works better?

[shockmonster]

I've posted this graph in other threads. Prices exploded exactly at the same time as medicare was enacted. Costs jumped at every instance the government attempted to "fix" medicare.

It's impossible to prove and absolutely pinpoint a single reason for health care going up in the 1960's. This was the time of the great Society programs by LBJ who was going to obliterate the problem of poverty. How about the increasing of welfare in this area, and dependence on government?

This problem (below) also began during the late 1960's that would affect health care and the dependence on government to take care of their children who overwhelmingly have health problems at young ages.

"Since 1970, out-of-wedlock birth rates have soared. In 1965, 24 percent of black infants and 3.1 percent of white infants were born to single mothers. By 1990 the rates had risen to 64 percent for black infants, 18 percent for whites. Every year about one million more children are born into fatherless families. If we have learned any policy lesson well over the past 25 years, it is that for children living in single-parent homes, the odds of living in poverty are great. The policy implications of the increase in out-of-wedlock births are staggering".

I would maintain that the unintended consequences of many government programs, and other things could have at least some affect on the costs of healthcare.

[ShockCrazy]

So...recognizing that both government and private industries have inefficiencies, which one is more likely to strive to gain efficiency? What motives do the two groups have to drive efficiency, how are they controlled, and which one works better?

I would argue for the people who do work the motives to drive efficiency are the exact same, threat of losing employment and pay. I don't think there's anything about working in the government that makes one a bumbling inefficient idiot.

[jdshock]

Re: Efficiency -

Profit-seeking companies tend to be more efficient than organizations not interested in making a profit. That's the nature of capitalism and financial incentives.

Sometimes, certain industries can be made more efficient by having a single-entity act as a monopoly. At the local level, for example, it doesn't make any sense to have a choice in garbage removal because it is more inefficient to have two organizations doing the same work. Even though the gut instinct is that competition would be better for the consumer, you're better off with the single choice.

The most persuasive arguments to me have been have to do with industry wide efficiency that would be gained by consolidating many companies into one organization. Frequently, this has to do with the fact that you're talking about multiple companies paying multiple CEOs, CFOs, accounting departments, upkeep on multiple websites, advertising campaigns, and whatever else. I do not find arguments about increased efficiency at a firm level all that persuasive. We all have different stories that could make us think private or government work is efficient or inefficient. If you believe in a single payer system, you can still take the reasonable assumption that private companies are going to be more efficient at the firm-level because they have a profit motive.

[jdmee]

Re: Efficiency -

Profit-seeking companies tend to be more efficient than organizations not interested in making a profit. That's the nature of capitalism and financial incentives.

Sometimes, certain industries can be made more efficient by having a single-entity act as a monopoly. At the local level, for example, it doesn't make any sense to have a choice in garbage removal because it is more inefficient to have two organizations doing the same work. Even though the gut instinct is that competition would be better for the consumer, you're better off with the single choice.

I recently went through the situation were we went from choosing our trash company to having city contract out the garbage. The prices for the new service were at most $5/month cheaper then the old trash company and this is not taking into account the guaranteed increases in fees that were in the cities contract.

However, we went from a company that:

If you had extra trash, just put it out and they would pick it up.
Provided a 90 gallon trash can for the lawn service, if you needed more they provided them or you could put them in the lawn bags.
Locally owned and operated.


To the current company,:
We provide 1 trash can, we will not pickup anything not in our trash can, If you need an extra trash can, $XX/month.
For lawn service, $XX/month, We do not provide the trash cans, however, the lawn refuse must be in a trash can, not more than 32 gallons in size, thus taking up more space to store. Which according to our mayor is ok because you can just stack them up when your are not using them.


A national company that is run out of state.


I don't see that I am better off with the single choice.

[jdshock]

I recently went through the situation were we went from choosing our trash company to having city contract out the garbage. The prices for the new service were at most $5/month cheaper then the old trash company and this is not taking into account the guaranteed increases in fees that were in the cities contract.

However, we went from a company that:

If you had extra trash, just put it out and they would pick it up.
Provided a 90 gallon trash can for the lawn service, if you needed more they provided them or you could put them in the lawn bags.
Locally owned and operated.


To the current company,:
We provide 1 trash can, we will not pickup anything not in our trash can, If you need an extra trash can, $XX/month.
For lawn service, $XX/month, We do not provide the trash cans, however, the lawn refuse must be in a trash can, not more than 32 gallons in size, thus taking up more space to store. Which according to our mayor is ok because you can just stack them up when your are not using them.


A national company that is run out of state.


I don't see that I am better off with the single choice.

If you live anywhere near me, you can do what I do: just put the enticing stuff next to the dumpster and make the local entrepreneurs' jobs a little easier when they go on their daily hunt for new treasures.

[CBB_Fan]

I recently went through the situation were we went from choosing our trash company to having city contract out the garbage. The prices for the new service were at most $5/month cheaper then the old trash company and this is not taking into account the guaranteed increases in fees that were in the cities contract.

However, we went from a company that:

If you had extra trash, just put it out and they would pick it up.
Provided a 90 gallon trash can for the lawn service, if you needed more they provided them or you could put them in the lawn bags.
Locally owned and operated.


To the current company,:
We provide 1 trash can, we will not pickup anything not in our trash can, If you need an extra trash can, $XX/month.
For lawn service, $XX/month, We do not provide the trash cans, however, the lawn refuse must be in a trash can, not more than 32 gallons in size, thus taking up more space to store. Which according to our mayor is ok because you can just stack them up when your are not using them.


A national company that is run out of state.


I don't see that I am better off with the single choice.

This is actually a good demonstration of why our current healthcare system doesn't work, from the private side.

You didn't make the choice to switch trash companies. Someone else did, and they have entirely different motives. In a totally free market, the previous trash company would win out, but to the government official in charge of negotiating trash contracts things are different. They just want to tell their boss they cut costs and saved money.

How is that related to private healthcare? Employers. In the same way that someone chose your trash company, your employer probably chose your health insurance company. And that comes with all the same problems.

My position is that either single payer or an actual free market (private citizens buying their own healthcare with visible costs) would reduce health expenses considerably.

[ShockerPrez]

This is actually a good demonstration of why our current healthcare system doesn't work, from the private side.

You didn't make the choice to switch trash companies. Someone else did, and they have entirely different motives. In a totally free market, the previous trash company would win out, but to the government official in charge of negotiating trash contracts things are different. They just want to tell their boss they cut costs and saved money.

How is that related to private healthcare? Employers. In the same way that someone chose your trash company, your employer probably chose your health insurance company. And that comes with all the same problems.

My position is that either single payer or an actual free market (private citizens buying their own healthcare with visible costs) would reduce health expenses considerably.

Kind of off topic, but if you outlawed employer sponsored health insurance, one would know if they were working for greedy SOBs if they did not receive an immediate raise.

Interesting idea to contemplate. Not really for it personally, but interesting to think about the effect of that move.