Is Universal Health Care Economically Viable? | Connecting Point | Feb. 3, 2020


>>UNIVERSAL HEALTHCARE IS A
CENTRAL TALKING POINT FOR MANY DEMOCRATS IN THE RACE FOR THE
WHITE HOUSE. BUT WHAT WOULD IT
LOOK LIKE AND WHAT WOULD IT COST? OPPONENTS OF SUCH A
HEALTHCARE OVERHAUL SAY IT WOULD BREAK THE BANK AND COULD LEAD TO
A LOWER QUALITY OF HEALTHCARE FOR ALL. PROPONENTS, LIKE ECONOMICS
PROFESSOR ROBERT POLLIN, CO-DIRECTOR OF THE UNIVERSITY OF
MASSACHUSETTS POLITICAL ECONOMY RESEARCH INSTITUTE, SAY
UNIVERSAL HEALTHCARE IS ECONOMICALLY VIABLE. HE SAT DOWN RECENTLY WITH
CAROLEE MCGRATH TO SHARE HIS PERSPECTIVE.>>BASIC FEATURES OF MEDICARE
FOR ALL ARE NUMBER 1, THAT EVERY RESIDENT OF THE COUNTRY IS
COVERED WITH GOOD QUALITY HEALTH INSURANCE. THEY ALL HAVE ACCESS TO GOOD
QUALITY CARE WHICH IS NOT THE CASE NOW.
AND THEN THE SECOND FEATURE OF IT IS BECAUSE THE WAY IT’S
DESIGNED, YOU ALSO SAVE MONEY. RIGHT NOW THE U.S. SPENDS
ROUGHLY TWICE AS MUCH AS OTHER ADVANCED ECONOMIES PER PERSON ON
HEALTHCARE AND MEDICARE FOR ALL WOULD LOWER COSTS AND EXTEND
COVERAGE FOR EVERYBODY.>>SO ALL PRIVATE INSURANCE GOES
AWAY?>>YES.>>SO ANY PLAN THAT A PERSON
CURRENTLY HAS THROUGH THEIR EMPLOYER THAT THEY LIKE, THEY
DON’T HAVE ANYMORE, THEY’RE PUT INTO A GOVERNMENT SYSTEM. THAT MAKES SOME PEOPLE WORRIED.>>RIGHT. IT DEPENDS HOW YOU ASK THE
QUESTION. IF YOU SAY — LET’S TAKE A
MIDDLE CLASS PERSON. IF YOU SAY RIGHT NOW YOU’RE
SPENDING $8,000 ON HEALTHCARE, NOW, UNDER MEDICARE FOR ALL
YOU’RE GOING TO SPEND $800 A YEAR FOR HEALTHCARE AND YOU’RE
GOING TO GET TO CHOOSE ALL YOUR DOCTORS, ALL YOUR PROVIDERS,
WHICH ONE WOULD YOU RATHER HAVE?>>AND THEN THEY MIGHT SAY TO
YOU HOW MUCH ARE MY TAXES GOING TO GO UP BECAUSE A FEW DIFFERENT
STUDIES HAVE TALKED ABOUT $32.6 TRILLION OVER THE FIRST 10 YEARS
AND THAT’S FROM CONSERVATIVE GROUPS AND FROM SORT OF THE
CENTER GROUPS AS WELL OR THAT’S FROM YOU?>>NO, NO. SO, YEAH, BUT WHAT YOU FORGET IS
UNDER THE SYSTEM WE HAVE NOW FOR THE 10-YEAR PROJECTION WE’RE
LOOKING AT $55 TRILLION SO THIS IS ACTUALLY A BIG SAVINGS. THAT’S THE THING THAT PEOPLE
FORGET. WHEN THEY MAKE THESE COMPARISONS
LIKE SOME OF THE POLITICIANS I WON’T MENTION NAMES, MAKE
COMPARISONS THEY SAY WELL, THIS IS GOING TO COST 35 TRILLION. THIS IS GOING TO COST 50
TRILLION OVER 10 YEARS, AND THEY’RE NOT OFF IN TERMS OF THE
BROAD RANGE BUT THE PRIVATE HEALTH INSURANCE SYSTEM,
DOMINATED SYSTEM THAT WE HAVE RIGHT NOW IS MORE EXPENSIVE.>>SO YOU’RE SAYING OVER THE
NEXT 10 YEARS THE SYSTEM THAT WE CURRENTLY HAVE IF WE DID NOTHING
ELSE WILL INCREASE TO 55 MILLION, THAT WHAT YOU JUST
SAID?>>NOT MILLION, TRILLION.>>OKAY. SO IF NOTHING IS DONE?>>WELL, THIS IS THE ESTIMATE OF
THE U.S. GOVERNMENT, YOU KNOW, THE CENTER FOR MEDICARE AND
MEDICAID. THEIR ESTIMATE IS IF WE MAINTAIN
THE SAME SYSTEM WE HAVE NOW OVER THE NEXT DECADE IT WILL COST US
FOR 10 YEARS ROUGHLY $55 TRILLION.>>SO THE 32.6 TRILLION THAT
YOU’RE TALKING ABOUT — SO NOW THIS ALL GETS DOLLED OUT, YOU
KNOW, INTO TAXES, HOW IS THIS PAID FOR VERSUS HOW IS THE
SYSTEM THAT WE WOULD CURRENTLY HAVE CONTINUE TO BE PAID FOR
BECAUSE PART OF THAT IS PRIVATE INSURANCE SO THAT WOULD BE PAID
FOR BY PEOPLE WHO HAVE THEIR OWN INSURANCE BUT YOUR PLAN OR THE
PLAN MEDICARE FOR ALL WOULD THEN BE DIVIDED BY EVERYBODY? HOW WOULD THAT WORK?>>WELL, YOU KNOW, THERE’S
VARIOUS WAYS. BASICALLY WE’RE SAYING WE HAVE A
SYSTEM WHERE EVERYBODY GETS COVERED AND YOU HAVE TO PAY FOR
IT. NOW, IN THE CURRENT SYSTEM JUST
TO BREAK IT DOWN — ‘CAUSE WHEN YOU GET THESE AGGREGATE NUMBERS
THEY’RE SO GIGANTIC, YOU KNOW, MILLION, TRILLION — SO LET’S
BREAK IT DOWN AGAIN TO AN AVERAGE MIDDLE CLASS HOUSEHOLD. THE AVERAGE MIDDLE CLASS
HOUSEHOLD NOW IS GOING TO PAY ON AVERAGE ABOUT $8,000 A YEAR
THROUGH PREMIUMS, THROUGH OUT OF POCKET, THROUGH DEDUCTIBLES,
THROUGH CO-PAYS AND, YEAH, THAT’S WHAT THEY PAY. THAT’S MONEY THAT THEY PAY. NOW, UNDER THE WAY THAT I
DESIGNED MEDICARE FOR ALL, THEY WOULD PAY ABOUT $800.>>OKAY. SO WHAT IS THEIR TAX
DIFFERENTIAL THERE? THEIR TAX DIFFERENTIAL THEY
WOULD PAY $800. UNDER MY THING — I WAS
BASICALLY ASKED TO WRITE A PROPOSAL BY SIXTEENTER SANDERS
SO THE DETAILS WILL CHANGE BUT ROUGHLY SPELL WHAT WE’RE TALKING
ABOUT, IS YES, YOU WILL PAY TAXES BUT THE TAXES YOU PAY —
LET’S SAY THE $800 IN TAXES ARE GOING TO BE A WHOLE LOT LESS
THAN WHAT YOU’RE NOW PAYING FOR HEALTH INSURANCE PREMIUMS,
DEDUCTIBLES, COPAYS OUT OF POCKETS.>>SO OTHER STUDIES HAVE SAID
THAT IS NOT THE CASE. THAT PEOPLE WILL PAY — A LOT OF
PEOPLE WILL PAY MORE IN TAXES –>>THAT’S NOT TRUE.>>THE HERITAGE FOUNDATION IS
ONE OF THE STUDIES.>>IF WE WANT TO LOOK AT A VERY
CONSERVATIVE THINK TAKE THAT, THE MUR CADES INSTITUTE FOUND BY
THE KOCH BROTHERS AT GEORGE MASON UNIVERSITY. THEY COME TO A RESULT THAT’S
ROUGHLY SIMILAR TO MINE. IN TERMS OF THE NET COSTS THAT
THE COSTS WILL GO DOWN.>>ACTUALLY, THEY ALSO SAID THAT
THE REIMBURSEMENTS FOR MEDICAL PROVIDERS WOULD ALSO GO DOWN
WHICH WOULD BE A BIG CHALLENGE SO THEY DIDN’T EXACTLY
COMPLETELY AGREE WITH YOUR REPORT. THERE WERE SOME DEFINITE
DESCRIPT SIS.>>THERE’S — DISCREPANCIES.>>THERE’S DIFFERENCES BUT
THEY’RE NOT AS LOW AS MINE BUT THERE ACTUALLY WAS A NEWS STUDY
THAT WAS JUST PUBLISHED 2 DAYS AGO THAT LOOKED AT ABOUT 12
DIFFERENT STUDIES INCLUDING MINE, INCLUDING THE MER CADES
INSTITUTE, INCLUDING THE YOU SHALL INSTITUTE AND I THINK — I
MIGHT NOT GET IT ACTUALLY RIGHT 11 OUT OF 12 SAY THE COSTS GO
DOWN AND THIS IS ACROSS THE POLITICAL SPECTRUM. THE COSTS DO GO DOWN BASICALLY
FOR 2 HUGE REASONS AND SOME SMALLER ONES. THE TWO HUGE REASONS ARE YOU GET
RID OF ALL THE ADMINISTRATIVE WASTE, EXCESSIVE ADMINISTRATIVE
ACTIVITY THAT ARE BUILT INTO OUR EXISTING SYSTEM.>>WITH THE GOVERNMENT ‘CAUSE A
LOT OF PEOPLE WOULD SAY THAT’S IMPOSSIBLE. THERE WOULD BE SO MUCH
ADMINISTRATION WITH A GOVERNMENT-RUN PROGRAM.>>ACTUALLY WE HAVE A VERY EASY
WAY TO COMPARE. MEDICARE, EXISTING MEDICARE, AND
THE ADMINISTRATIVE COSTS ARE 2% OF ADMINISTRATIVE COST WITH
EXISTING HEALTH INSURANCE ADMINISTRATIVE COSTS ARE ABOUT
12% SO THAT’S A FAIR COMPARISON. 2% VERSUS 12%. AND A BIG SOURCE OF SAVINGS ARE
PHARMACEUTICAL PRICES. RIGHT NOW ON AVERAGE IN THE
U.S., WE PAY ROUGHLY TWICE AS MUCH AS PEOPLE PAY IN BRITAIN,
GERMANY, JAPAN, FRANCE FOR THE SAME DRUGS BECAUSE WE DON’T
INTERVENE IN THE MARKET IN THE WAY THEY DO AND SO THE DRUG
COMPANIES BASICALLY EXERCISE THIS MARKET POWER AND PEOPLE PAY
TWICE AS MUCH.>>HOW WOULD HOSPITALS BE ABLE
TO PROVIDE THE CARE THAT YOU’RE SAYING THAT THEY CAN PROVIDE IF
THEY’RE REIMBURSED AT A LOWER RATE? HOW WOULD THEY REMAIN PROFITABLE
AND BE ABLE TO CARE FOR PEOPLE IN A WAY THAT, YOU KNOW, PEOPLE
WOULD NEED TO BE CARED FOR?>>THE HOSPITALS ARE REALLY NOT
GOING TO BE AFFECTED, PER SE. WHAT GETS AFFECTED IS THE
INSURANCE PROVISION, SO THE HOSPITALS ACTUALLY ARE GOING TO
SAVE MONEY BECAUSE THEY THEMSELVES ALSO WILL HAVE LOWER
ADMINISTRATIVE COSTS BECAUSE RIGHT NOW, YEAH, HOSPITALS,
PROVIDERS, DOCTORS’ OFFICES, THEY HAVE TO DEAL WITH THIS LAB
RINTH INSURANCE INSURANCE SYSTEM THERE’S ALL DIFFERENT KIND OF
PAIRS AND RULES AND THERE’S WAYS TO GET APPROVALS THAT ARE
DIFFERENT. THERE’S DOCTORS THAT ARE WITHIN
THE PLAN, DOCTORS THAT ARE NOT WITHIN THE PLAN AND THAT TAKES A
LOT OF ADMINISTRATIVE TIME AND THE HOSPITALS ARE GOING TO END
UP SAVING MONEY ON ADMINISTRATION AS WELL.>>OKAY. THE CATO INSTITUTE SAID THERE
WOULD BE A 40% LOWER REIMBURSEMENT RATE —
>>I DON’T KNOW — THAT NUMBER IS NOT CORRECT. I ACTUALLY WAS IN TOUCH WITH THE
AUTHOR ABOUT THAT. I MEAN, HERE’S — IF WE ASSUME
THAT ALL DOCTORS ARE PAID AT EXISTING MEDICARE RATES, OKAY,
MY ESTIMATE IS THAT PER PATIENT EVERY DOCTOR GETS ON AVERAGE A
7% LOWER REIMBURSEMENT RATE. NOT — I DON’T KNOW WHERE HE GOT
44%.>>OBVIOUSLY, HE DISAGREES
‘CAUSE HE HAD PUBLISHED THAT IN THE REPORT.>>YES, HE DID. SO BUT I CAN TELL YOU HOW I GOT
MY NUMBER AND THEN ON TOP OF THAT, WHICH HE DID NOT FACTOR
IN — UNDER MEDICARE FOR ALL, THERE WILL BE MORE COVERAGE. PEOPLE WILL GO AND USE THE
SYSTEM, WHICH MEANS THERE WILL BE MORE DEMAND FOR PHYSICIAN
SERVICES. IN ADDITION THE DOCTORS WILL BE
RELEASED FOR A LOT OF THE TIME THAT THEY NOW SPEND FILLING OUT
FORMS SO THAT WILL GIVE THEM MORE TIME FOR TREATING PATIENTS,
BILLABLE HOURS. I MYSELF TALKED TO MY OWN
PRIMARY CARE PHYSICIAN AND I ASKED HER AND SHE SAYS SHE
SPENDS 20% OF HER WEEK FILLING OUT FORMS.>>I THINK ONE OF THE BIG
CONCERNS FOR PEOPLE WHO DISAGREE WITH YOU WILL SAY THAT, YOU
KNOW, A GOVERNMENT-RUN HEALTHCARE SYSTEM WOULD LEAD TO
RATIONING OF CARE, RIGHT OFF THE BAT WHEN WE STARTED THE
CONVERSATION YOU SAID PEOPLE WILL HAVE BETTER HEALTHCARE AND
A LOT OF PEOPLE DOUBT YOU AND THEY SAY LOOK, IF WE’RE PUT IN
ONE SYSTEM IT’S VERY POSSIBLE SOMEBODY WHO MAY BE AN ELDERLY
PATIENT MIGHT BE KIND OF PUSHED TO THE SIDE. HOW DO YOU RESPOND TO PEOPLE WHO
HAVE THOSE CONCERNS?>>WELL, LOOK, WE ALREADY HAVE
MEDICARE. IT’S BEEN OPERATING SINCE 1965. PEOPLE LIKE IT. YOU MENTIONED ELDERLY PEOPLE,
ELDERLY PEOPLE ARE ALL IN MEDICARE NOW AND, YOU KNOW, OF
COURSE, THERE’S PROBLEMS BUT GENERALLY SPEAKING, IT WORKS
PRETTY WELL SO WE COULD EXTEND THAT MODEL AND SAY, WELL, THAT’S
GOING TO BE AVAILABLE TO EVERYBODY.>>COULD THERE BE RATIONING OF
CARE.>>OF COURSE THERE’S RATIONING
OF CARE — HERE’S HOW WE RATION CARE NOW, IF YOU DON’T HAVE
ENOUGH MONEY YOU DON’T GET THE CARE AND THAT’S WHY, YOU KNOW,
20% OF THE — 27% OF THE POPULATION THAT HAS INSURANCE,
THAT HAS INSURANCE DOESN’T GET THE CARE THEY NEED BECAUSE EVEN
WITH INSURANCE THEY CAN’T AFFORD TO PAY FOR A DOCTOR’S VISIT OR
TO GET THE DRUGS THAT THEY NEED. THAT THEY’RE ASKED TO GET SO
THAT’S THE WAY THAT WE RATION NOW. THE WAY THAT WE WOULD RATION
UNDER MEDICARE FOR ALL WOULD BE MORE EGALITARIAN. EVERYBODY WOULD BE COVERED AND
WE WOULD SAVE MONEY. WE WOULD — WE WOULD NOT HAVE
THIS MASSIVE ADMINISTRATIVE BURDEN OVERHANGING US.

2 thoughts on “Is Universal Health Care Economically Viable? | Connecting Point | Feb. 3, 2020

  1. I think it was a comedian who said, "Universal health care is so complicated, that only 38 out of the 39 most developed countries have been able to figure it out."

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