Healthcare Models

  • Bismarck Model (Germany, Japan, Netherlands, Switzerland): The worker and the employer share the premiums for a health insurance policy. The insurer picks up most of the tab for treatment, with the patient either making a co-payment or paying a percentage. Offer universal coverage using private providers and private insurance plans- with government exercising various degrees of regulatory control over insurance coverage, pricing, and so on.-The Healing of America by Reid.

  • Beveridge Model (Britain, Italy, Spain, Scandinavia, Cuba): Government owned doctors and nurses working in government owned clinics and hospitals. There are no medical bills. Government serves as both provider and payer.-The Healing of America by Reid.

  • National Health insurance policy (Canada, Taiwan): The providers are private, but the payer is a government-run insurance program that every citizen pays into. The national, or provincial, insurance plan collects monthly premiums and pays medical bills.-The Healing of America by Reid.

  • The Out of Pocket Model: USA


 Summary/Background

  • There are two basic approaches to keeping people healthy:

    • Public Health deals with populations as a whole and can involve changing a nation's social and cultural norms on a massive scale.-The Healing of America by Reid.

    • Medical Model which deals with people on an individual basis, seeking to head off diseases or detect them before they become serious.-The Healing of America by Reid.

  • If your disease is your fault, who should pay for your medical treatment? Britain's National Health Service, for example, or America’s Medicare system for the elderly- the cost of everybody’s health care is shared by everybody else. A person who smokes or eats too much ice cream or rides a moto without a helmet may be endangering his own body, but he also endangers my wallet. He could be imposing high costs on the health care system, a system funded by my premiums or my tax payments.-The Healing of America by Reid.

  • As a happiness researcher, I cannot see a more obvious policy to improve quality of life than by providing universal health care.-The Little Book of Lykke by Wiking. 

  • In healthcare, you can have affordability, quality, universality, timely. You can't have them all though.-Ben Shapiro.

Pros

Cons




Terminology

  • Guaranteed Issue: Health insurance plans are required by law to guarantee coverage for anybody.

  • Adverse Selection: People who refuse to buy health insurance when they’re healthy but go shopping for a plan after they’ve been diagnosed with a serious disease. The solution to adverse selection is to mandate that everybody pay for health insurance, through either private company or a government program. That requirement is known as individual mandate, and it is a necessary corollary to guaranteed issue.

  • Individual Mandate: Everyone HAS to buy insurance

  • Capitation Payment: Paying a doctor for keeping his patients healthy (a perk).

  • Socialized Medicine: Government paying for all medical bills from private providers.


Healthcare in the USA

Summary/Background

  • For veterans, active duty military personnel, and Native Americans, we use the British model. For people over 65, we’ve adopted the Canadian Model. For working people who get insurance through their employers, we’re a Bismarck country, like Germany or Japan. And for the tens of millions without insurance coverage, we’re just another Out of Pocket country like Rwanda.-The Healing of America by Reid.

  • 44% of Healthcare programs is covered by major government programs.-The Healing of America by Reid.

  • While the United States spends 17.4 percent of GDP on health care, the next most expensive system in a large, wealthy country is France at 11.8 percent. The other wealthy countries spend as little as 8.5 percent (Japan) of GDP.-Back to Work by Bill Clinton. 

  • Four Systems

    • Military/Vets/Native Americans

      • The US Department of Veteran Affairs operates one of the planet’s purest examples of socialized medicine.-The Healing of America by Reid.

      • Limits availability via “in-network” list of doctors, or “preauthorization” by the insurance company .-The Healing of America by Reid.

    • Medicare

      • Summary

        • In 1965, when the US Congress decided to guarantee health care to any American over 65, the Americans adopted both the National Health Insurance model- that is, private providers and public financing- and the name that Tommy Douglas gave it, Medicare.-The Healing of America by Reid.

        • Designed for seniors.

        • Does not cover a host of conditions including pregnancy, vision, or dental.  —pregnancy — that younger people face.

        • It includes significant copays and no limit on out-of-pocket spending, which is why three-quarters of enrollees use supplemental insurance to help defray costs.

        • Medicare makes substantial use of private insurance.

        • All prescription drug coverage is provided by private insurers through Medicare’s Part D program, and about 34 percent of Medicare beneficiaries are enrolled in private Medicare Advantage plans instead of traditional Medicare.

        • Medicare, like Social Security, is financed by a payroll tax, 1.45 percent.-Back to Work by Bill Clinton.

        • Arguments For

        • Arguments Against

        • Potential Solution

    • Medicaid

      • # of Americans on Medicaid: 57 million (2017).

    • Employer Funded

    • Out of Pocket

Pros

Cons

  • Spends 20 cents of every dollar for nonmedical costs: paperwork, reviewing claims, marketing, profits, and so on .-The Healing of America by Reid.

  • The fundamental difference here is that foreign health insurance plans exist only to pay people’s medical bills, not to make a profit. Health care economists around the world say that there’s a basic conflict between the principle of health insurance and the pursuit of profit.-The Healing of America by Reid.

  • Led by for-profit insurance companies, our health-care system spends about eleven cents on the dollar more on paperwork and administration than any other wealthy nation. That’s more than $200 billion a year.-Back to Work by Bill Clinton. 


The Affordable Care Act

  • OBAMACARE AKA Public Law 111-148: The Patient Protection and Affordable Care Act signed into office on 23 MAR 2010.

  • Expanded Medicaid to 138% of Poverty Level

  • Expanded Coverage occurs in two major ways

  • Half of the increase will come from easing the qualifications for Medicaid, the government program that provides free or subsidized health care for low-income families. Normally, the cost of Medicaid is split between the Federal Government and each state; under the new law, Washington will pay all the costs of the expanded coverage for the first five years.-The Healing of America by Reid.

  • 2014: Each state will have to set up an insurance “exchange.” Essentially, that means an online market like the Web sites that sell books or airline tickets. People who don’t get insurance through their employer can go to this marketplace and find a choice of plans from various insurance companies. The law says that each exchange should offer five different levels of coverage plans (Bronze, Silver, Gold, Platinum, Catastrophic) to give buyers a broad choice.-The Healing of America by Reid.

  • Requires all employers with more than 49 people to provide a health insurance plan.-The Healing of America by Reid.

  • Guaranteed Issue: Beginning in 2014, insurers will be required to issue, or renew, a policy to anybody, regardless of any preexisting condition. Until this rule takes effect in 2014, states are supposed to expand their existing “high risk” insurance programs so that more of these uninsurable’s can be covered.-The Healing of America by Reid.

  • The plan sets up a new federal agency, the Independent Payment Advisory Board, to recommend how much Medicare should pay doctors and hospitals for each medical procedure. .-The Healing of America by Reid.

Pros

Cons

  • The individual mandate is not firmly established so people don’t HAVE to buy insurance.-The Healing of America by Reid.

  • The reform law outlaws the reprehensible insurance practice of “rescission,” where the company accepts your premium payments every month as long as you’re healthy, but then rescinds, or cancels, your coverage when you face big medical bills.-The Healing of America by Reid.

  • The US Firms will still be allowed to deny your claims (although they will have to report, for the first time, how many claims they reject each year). When they do pay, they can still take weeks or months to do so, without the strict time limits that are common elsewhere. And the US will continue to be the only developed nation that permits health insurance companies to make a profit on the basic package of coverage.-The Healing of America by Reid.

  • Obamacare costs $940 billion over the first ten years. To raise the money Congress is taxing Drug Companies, medical device makers, and health insurance companies.-The Healing of America by Reid.

  • Beginning in 2013, the bill also raises Medicare tax for people earning more than $200,000 ($250,000 for couples) from 2.9% to 3.8%.-The Healing of America by Reid.

Summary

  • It may seem strange to think that we “purchase” the right to sue. Of course, that right is not an itemized portion of the insurance bill—but it is clearly included in the price.-Nudge by Thaler & Sunstein.

  • Consider this fact: both health care customers and taxpayers are now forced to help pay for the eighty-five thousand medical malpractice lawsuits that are filed each year. These lawsuits cost a lot of money—estimates range from $11 billion to $29 billion per year. Exposure to medical malpractice liability has been estimated to account for 5 to 9 percent of hospital expenditures—which means that litigation costs are a contributor to the expense of the health care system.-Nudge by Thaler & Sunstein.

  • Many doctors must pay $100,000, or significantly more, in insurance bills every year. Your medical bill reflects those costs.-Nudge by Thaler & Sunstein.

  • There are indirect costs as well, and patients must bear those costs too. For example, many doctors practice “defensive medicine,” ordering expensive but unnecessary treatments for patients, or refusing to provide risky but beneficial treatments, simply in order to avoid liability. Another indirect cost of liability—and an especially bad one—is that error reporting in hospitals and among physicians is discouraged.-Nudge by Thaler & Sunstein.

  • It would be stupid to say that everybody is equal. Some are rich and some are poor. Some are beautiful, some aren’t. Some are brilliant some aren’t. But when we get sick- then everybody is equal. Everybody must have equal right to the best medical treatment we can provide.-The Healing of America by Reid.

  • In the 1980s, Taiwanese private insurance giants learned a profitable lesson from American insurers. US companies like Aetna and UnitedHealth had been buying up nonprofit health insurers like Blue Cross Blue Shield and converting them into profit making operations.-The Healing of America by Reid.


Arguments For

Arguments Against

Potential Solution

  • Health insurance companies should be permitted to offer plans with and without the right to sue for negligence.-Nudge by Thaler & Sunstein.

  • Patients should be presumed to be permitted to sue only for intentional or reckless wrongdoing—and not for mere negligence. (Negligence is normally defined as the failure to meet what is called the “ordinary standard of care,” a vague concept that tends to make lawyers fight and judges scratch their heads. Intentional or reckless wrongdoing is a harder standard for plaintiffs to meet.)-Nudge by Thaler & Sunstein.


Healthcare- France

Summary/Background

Pros

  • Under French law, every health facility is “in network.” Any patient can go to any doctor, any specialist, any surgeon, and any hospital or clinic in the whole country, and the insurance system must pay the bill.-The Healing of America by Reid.

  • France spends about $3165 per capita each year for a health insurance system that covers everybody; the US spends more than $7000 per capita and leaves tens of millions without coverage. France’s spending runs just under 10% of its total national wealth; The united states is spending about 17% of GDP on health care.-The Healing of America by Reid.

  • The French use the vital card which contains the patient's entire medical record, back to 1998. Embedded in the gold metallic square just I a digital record of every doctor visit, referral, injection, operation, X Ray, diagnostic test, prescription, warning, etc., together with a report on how much the doctor billed for each visit and how much was paid, by the insurance funds.-The Healing of America by Reid.

  • No French doctor pays a penny to go to college or medical school.-The Healing of America by Reid.

  • French physicians pay less in a year for malpractice insurance than their US counterparts pay in a week.-The Healing of America by Reid.

Cons

  • The average French doctor is making about a third of what his counterpart in the us would earn.-The Healing of America by Reid.

  • The major health insurance funds are all operating at a deficit, and the costs of the health care systems are increasing significantly faster than the economy as a whole. That’s why the doctors keep striking and the sickness funds keep negotiating and the government keeps going back to the drawing board, with a new major health care reform every few years.-The Healing of America by Reid.


Healthcare- Germany

Summary/Background

  • Germans pay about 15% of their paycheck for health insurance, split between the worker and the employer. That’s almost exactly equal to what an American worker and his employer pay in Social Security and Medicare taxes.-The Healing of America by Reid.

Pros

  • On a regional basis, insurance providers negotiate pricing arrangements with hospitals and doctors associations. The price established in this agreement becomes the fixed price for all physicians and hospitals in the region. For the patient, this price is basically irrelevant; the doctor collects her free from the sickness fund and the patient never sees a bill. The patient pays a monthly insurance premium to the fund; this fee is a percentage of income (like the Social Security tax in the US).-The Healing of America by Reid.

  • The sickness funds are nonprofit entities; they exist to pay people's medical bills, not to pay dividends to shareholders. Thus, they don’t have the same incentive that the US insurance industry has to limit the people they cover or to deny claims; in fact, the German insurance plans are required to accept all applicants and to pay any claims submitted by a recognized doctor or hospital.-The Healing of America by Reid.

  • As is common in Europe, students do not face any debt. For a busy GP with more than 700 active patients, a GP pays about $1400/yr for malpractice insurance- barely one week's premium for many American family doctors.-The Healing of America by Reid.

Cons


Healthcare- Japan

Summary/Background

  • Health care in Japan is paid for through insurance plans; generally, the patient has to pay 30% of the doctor bill as a co-pay, and the insurance company picks up the remaining 70%.-The Healing of America by Reid.

  • Everyone in Japan is required to sign up with a health insurance plan. This is what’s known as “individual mandate.”-The Healing of America by Reid.

Pros

Cons

  • The system squeezes cost by sharply limiting the income of medical providers- doctors, nurses, hospitals, labs, drug makers. The Healing of America by Reid.

  • The secret of Japan’s low health care costs is simple: The system shafts doctors and hospitals, paying some of the lowest fees on Earth for medical treatment.-The Healing of America by Reid.


Healthcare- UK


Summary/Background

  • Government owns hospitals, pays the doctors, buys the medicine, and covers all the bills: as close as it gets to “socialized medicine.”-The Healing of America by Reid.

Pros

  • In the NHS, there is no insurance premium to pay, no copayment, no fee at all, whether you drop by the GP’s office with a cold or receive a quadruple bypass from the nation's top cardiac surgeon. The doctor’s bill is paid by the government, and the patient never even thinks about it.-The Healing of America by Reid.

Cons

  • They pay through a network of taxes that would make any American cringe; the sales tax in the UK is 17.5% on anything you buy, while income and social security taxes are higher than America’s in every income bracket.-The Healing of America by Reid.


Healthcare- Canada

Summary/Background

Pros

Cons

  • The constant fear is that rich people will turn more and more to private insurance and away from Medicare. The result would be two-tiered medicine. Many fear that if Canada did move to two-tier medicine, the rich might get better care, with less waiting, than the poor.-The Healing of America by Reid.

  • Doctor shortages and waiting lists continue to be a basic frustration for anybody who has to rely on Canada’s health care system.-The Healing of America by Reid.


Healthcare- Taiwan

Summary/Background

  • Hsiao urged Taiwan to set up a single national insurance system: “When you have a single payer…for the doctors and hospitals, then you can identify who’s really abusing the system. That also allows you to put a global budget in place. When you have a single payer, you can say, “I'm only going to spend X percent of my GDP for health insurance,” and you can enforce that.”-The Healing of America by Reid.

  • In the 1980s, Taiwanese private insurance giants learned a profitable lesson from American insurers. US companies like Aetna and UnitedHealth had been buying up nonprofit health insurers like Blue Cross Blue Shield and converting them into profit making operations.-The Healing of America by Reid.

  • Insurance companies were required to offer a basic package of benefits to all applicants, and insurers could not make a profit on basic health coverage (any profits or surplus earnings must be used to reduce premiums for the next year).-The Healing of America by Reid.

Pros

Cons

  • The low rate of spending has emerged as the most serious problem facing Taiwanese health care in the second decade of the national system. Many clinics and hospitals are defaulting on bank loans and threatening to declare bankruptcy unless National Health Insurance agrees to pay higher fees.-The Healing of America by Reid.