If Medicare for All Is Politically Impossible, “All Payer” Could Fix the System

Yves here. While I like the “all payer” idea a lot, one quibble I have regards price-setting on a regional basis. There’s a big difference in pricing between major cities and exurbs. In Manhattan, doctors in Queens and Staten Island charge lower fees due to lower rents. And it used to be not unheard of to develop much more granular cost adjustment formulas. When I was in college, I spent the better part of the summer doing survey research for a firm that was getting cost data to develop cost adjustments for payments for local law offices in the Legal Services Corporation. We rang around to law firms all over the US and wheedled cost information out of them, like their expenses for malpractice insurance, paralegals, publications, rent. So the basic idea is appealing, but it would need to be implemented on a more granular basis that this article suggests.

However, even though this “all payer” system would help curb abuse like ginormous and opaque hospital bills, it doesn’t address the administrative burden of fighting with insurance companies. Some experts have estimated that his accounts for as much as 30% of total US medical costs when accounted for properly (as in extra doctor and hospital staff, as well as doctor time spent justifying the services they provided). Numerous anecdotal reports also suggest it is driving doctors to drop out, or shift their practices to services to the affluenza, like anti-aging, so they no longer deal with insurance companies (or treating sick people). Also bear in mind that doctors and hospitals have made an art form of “upcoding” medical procedures, so coding simplification would likely need to be part of this reform too. For instance, some readers complained of being given questionnaire about depression at their latest visit to their GP when they’d not complained of it. They assumed the doctor wanted to push pills. More likely was that he intended to charge for this assessment.

By Marshall Auerback, a market analyst and commentator. Produced by Economy for All, a project of the Independent Media Institute.

Affordable health care providing universal access has long been a holy grail of the Democratic Party. Like the grail itself, however, many have tried to obtain it, and all have failed in the efforts.

Even after the implementation of President Obama’s Affordable Care Act, American health care is still neither particularly affordable (especially after repeated Republican efforts under the Trump administration to gut its main elements), nor is the access universal. Unlike in most other countries, U.S. health care is still largely predicated on employment, despite the insistence of many that it is a “universal right.”

On the other hand, a wholesale restructuring of the existing employee-based patchwork system with a single-payer Medicare for All system seems to be equally challenging without a huge Democratic majority in Congress and a sane operator in the White House. Despite growing political support (helped by an apparent endorsemen tby former President Obama), it is still not a goal universally shared by Democrats in the present congressional term, if recent statements by Speaker of the House Nancy Pelosi are anything to go by. A tough row to hoe.

While we wait and perhaps agitate for a better health care system, it’s worth examining other potential remedies that can improve what we currently have coming from a different political logic that the current political alignment may find even slightly palatable. Consider, for example, that the Trump administration has some kinds of price regulations in mind with regard to pharmaceutical prices, regulating them against what they cost on average in other countries. “Lower costs” and “administrative simplicity” have currency in this political climate. If Medicare for All remains a bridge too far, what about the concept of the “all-payer system”?

In general terms, as Sarah Kliff, a leading health care journalist, has highlighted, an all-payer system means that all payers pay the same price for the same procedure or drug everywhere, so issues such as the asymmetry of bargaining power (which exists in the current system, say, between a consumer and a health insurance conglomerate or HMO) cease to matter.

Of course, $1 means different things to people of different economic levels. But the variance in price for the same medical services is gigantic, and the power of fixed prices would steamroll many of the worst elements of the system we currently have in place. Consider that the taxi businesses in many cities profitably operate on fixed rates, as do health care systems in other countries in the Organization for Economic Cooperation and Development (OECD).

How would it work? As the economist Uwe Reinhardt puts it: “All private and public insurance programs in a region would pay all physicians, hospitals, and other providers of health care on the basis of a uniform fee schedule common to all payers, and the cost of uncompensated care rendered to uninsured patients would be covered by a separate fund.” In essence, the goal is to ensure that everybody pays the exact same price and the same rate for any procedure or medicine, regardless of where you live or work. And everybody is covered.

Decades of “reform” in this country have demonstrated conclusively that simply tinkering with the existing system won’t work. America’s health care provision delivers inferior outcomes relative to those in other countries, which do provide universal health care coverage. And for a country that supposedly has the most market-savvy consumers in the world, U.S. health care furnishes remarkably lousy value for money for them, as the OECD’s “Health Care at a Glance 2011” highlighted:

The same set of hospital interventions (including the normal delivery of a baby, a Caesarean section, a hip or knee replacement, etc.) cost 60 percent more in the United States than in a selection of other countries. Similarly, 50 high-selling pharmaceuticals cost 60 percent more in the United States than in Europe. …Overall, therefore, high prices are the main reason for high health care spending in the United States.

Prices remain so high because the overall system (outside of Medicare) remains largely administered via a for-profit private health insurance oligopoly, and pharmaceutical companies, which preserve margins via predatory price gouging, and literally kill people in the process because of lack of affordability.

As a result of these longstanding failures, “single-payer” proposals such as Medicare for All have finally started to gain serious policy traction, especially within the progressive wing of the Democratic Party. Single-payer can take many forms, but in essence, it is a system in which a single public or quasi-public agency provides health care financing (via taxation or social insurance charges). But even though publicly funded, the delivery of that care remains in private hands. This is fundamentally what Medicare is, and the goal of politicians such as Senator Bernie Sanders is to expand Medicare provision to all Americans—Medicare for All.

In health care, the right is ideologically fixated on the idea that the answer to predatory pricing is more competition (which can’t work in imperfect medical markets, for reasons highlighted by economist Paul Krugman). By contrast, a large number of elected Democrats, both at the federal and state levels, want to do it through single payer, which has worked in other countries where the insurance and pharmaceutical industries don’t represent 15 percent of GDP.

Unfortunately, the fact that Big Pharma and a large private health insurance oligopoly exist in the United States is precisely what makes Medicare for All tricky to enact. With each reform threat, the two groups—Big Pharma and the health insurance industry—quickly mobilize opposition in Congress (to whom they have generously donated precisely for this purpose), much as Wall Street banks thwarted wholesale financial reform in the wake of the 2008 crisis, even when those banks were at death’s door.

All-payer systems have many of the same virtues of Medicare for All, particularly the reduction of costs and minimal overhead and complexity. The key feature with all-payer systems is that everybody pays the same government-set price for the same drug or procedure, which keeps costs low (as do single-payer systems). But as Kliff notes, the key distinction from the Medicare for All proposal (or other forms of single-payer) is that “Single payer does this by eliminating private plans for one government plan. All-payer rate setting gets there by setting one price that every health insurer pays for any given medical procedure.” But in banding together, a country’s insurers can achieve cost savings comparable to nations where single-payer is operative, argues Kliff, who cites the international pricing data to illustrate the magnitude of the price differentials currently existing between the United States and these other countries.

The virtue of the all-payer system in contrast to single-payer is that the former allows for the existence of multiple insurers—government, private commercial, nonprofit—thereby avoiding the politically toxic threat (largely exploited by the right) of a big socialistic government, via rationing and “death panels,” taking full control of your existing health care, and destroying it in the process.

States such as Maryland already use this kind of system when they negotiate with hospitals, and several European health systems, such as Germany and Switzerland, have, as Kliff illustrates, “long used an all-payer approach on a regional basis for physicians, hospitals, pharmaceutical products, and various other providers of health care.” So has Japan, an aging society that arguably has an even more acute demographic problem than the United States. Kliff cites a study of that country’s all-payer rate setting program, published in Health Affairs in 2011, which found that “the share of the country’s economy devoted to health care grew 0.8 percentage points between 2000 and 2008. During the same time period, American health care grew 2.7 percentage points.”

The “all-payer” system, then, cuts less against the grain of the existing American health care architecture. The government does not eliminate the private health insurers but merely sets the standard prices that providers can charge. In countries where it currently exists, negotiated rates are established over a medium-term time frame, usually two to three years, by an independent rate commission with representatives of providers and payers. And because of the existence of a uniformly imposed fee schedule, the cost of, say, an appendectomy, or a cancer treatment, remains the same, regardless of one’s insurer, the hospital, or the state in which one lives, so administrative burdens are significantly reduced, as is the cumbersome complexity of our current health care system.

Of course, the stringent cost controls built into all-payer are exactly why the for-profit insurers and pharmaceutical companies will still vigorously oppose its introduction. Both industries thrive on complexity and minimal efforts to contain spiraling costs, which fatten their considerable margins. Their usual justification for these exorbitant profit margins, particularly in the pharmaceutical industry, is that intense price controls stifle innovation. But some of the most innovative developments in health care treatments have arisen in countries that tightly constrain costs, such as France or Switzerland (which also have thriving pharmaceutical sectors). And as the Commonwealth Fund has illustrated, the lack of price controls hasn’t exactly given the United States a massive qualitative edge in health care provision:

1. The U.S. ranked last place among the 11 countries for health outcomes, equity and quality, despite having the highest per capita health earnings.

  1. The U.S. also had the highest rate of mortality amenable to healthcare, meaning more Americans die from poor care quality than any other country involved in the study.
  2. Poor access to primary care in the U.S. has contributed to inadequate chronic disease prevention and management, delayed diagnoses and safety concerns, among other issues.

It is also worth noting that like many of their counterparts in other industries, U.S. pharmaceutical companies in particular are increasingly deploying their substantial profits not toward R&D, but share buybacks, which also undermines the justification for the exorbitant prices of their products. Big Pharma’s other rationale for high prices—namely, to recoup the amount of time and cost deployed toward the research undertaken—also conveniently ignores the fact that many of their “pioneer” drugs were originally devised in academic laboratories with considerable federal government support, only then to be patented and licensed to private companies, as former Congressman Henry Waxman notes in a 2017 report, “Getting to the Root of High Prescription Drug Prices: Drivers and Potential Solutions.”

To get around the likely opposition to all-payer in the United States, Uwe Reinhardt has suggested taxing prices that vary too much from the Medicare or Medicaid reference prices, as opposed to banning private health insurance altogether, as California Senator (and presidential candidate) Kamala Harris recently suggested (and subsequently walked back). Regulators can just extend the Centers for Medicare and Medicaid Services fee schedules to the private sector. After a few rich specialists retire, and the hollowness of the claims of Big Pharma are exposed, we can settle down to a new normal of non-predatory pricing as occurs in the rest of the OECD. Only if for political reasons we discover we can’t have direct all-payer regulation of medical prices (which most advanced countries no matter their insurance systems have) might there be a need to resort to Plan B, namely, a single-payer system in which government or large organizations use their monopsony power to set prices.

To the complaint that even all-payer introduces a huge new level of “statist” government control antithetical to the “values” of America’s market economy, it is worth noting that it is only “statist” in the sense that electric utility rate commissions are statist. But it doesn’t require “socializing” anything, any more than utility regulations do.

The optics of health care are changing. Given the hard political realities of the United States, what is most likely to happen in the next 10 years?

Print Friendly, PDF & Email


  1. Carla

    “After a few rich specialists retire, and the hollowness of the claims of Big Pharma are exposed, we can settle down to a new normal of non-predatory pricing…”

    How about this version?

    “After Pelosi, Schumer and McCormick retire (or expire), and the hollowness of the claims that money is speech and corporations are people are exposed, we can settle down to a new normal of non-predatory representation” and eliminate an entirely predatory industry, “health” insurance.

    1. zagonostra

      Nicely put Carla. I took issue with the opening sentence to the article, which I think is patently false. The Democratic Party leadership has never given a damn about M4A or some faithful variant, they only want to ensure continued money rolling into their coffers.

      Affordable health care providing universal access has long been a holy grail of the Democratic Party. Like the grail itself, however, many have tried to obtain it, and all have failed in the efforts.

    2. Marshall Auerback

      I like your version! Maybe that becomes part of the follow-up article! PS I also happen to agree with Yves’s quibble. My only point is that moving toward a single payer system in one go, given the current political configuration is an impossibility (in fact, as Carla suggests, it might even be a political impossibility if and when the Democrats become a majority party again). But there’s a lot that can be done even within the existing structure that eliminates many of the egregious excesses of the current system via All Payer. So it’s a start, but by no means a conclusion.

      1. templar555510

        I’m not American, but I have a particular interest in this because my daughter is married to an American ( who just happens to be a doctor ) and they have two small children. If there is one issue that can be made into a battleground that can be won it is this. But I agree with Marshall it can’t be won via the present political system . It needs a movement and from this distance it seems all the preconditions for that are present and there is almost tow years to mobilise .

      2. Darius

        What about budget reconciliation. Democrats never want to talk about because, to sum up, they’re gutless cowards. But it’s the go-to for Republicans to enact their agenda even with razor thin Senate margins. An initiative and strategy by a popular Democratic president could be a decisive difference however. Or are Democrats constitionally incapable of behaving strategically?

      3. Susan the Other

        Yes, Carla is right. But this All-Payer sounds as good as MfA to me. So if it is the path of least resistance then we should take it. Something tells me that this alternative will send Pharma and Insurers into as big a tizzy as MfA. Because it disincentivizes them even more than MfA by taking away their ability to literally manufacture their own profits. I wish we could be even more draconian with them. Let the state run health care like a human right, not like some grand generosity that big corporations graciously allow us.

      4. jonboinAR

        Electing a nutbag game show host as president was a political impossibility. Suddenly, it wasn’t. Until just recently, a straight-up old-line socialist becoming probably the most well-regarded-by-everybody politician in the US would have been considered a political impossibility, as well. The mood to try something completely different from our latter 20th Century ways has been growing in this country since at least 2008. Stirrings of discontent with the status quo probably go back at least to the second half of the GWB presidency what with his administration getting bogged down in Iraq and middle Americans coming to realize that, unless they were involved with flipping houses, the supposed recovery from the 2000 recession wasn’t improving their circumstances any. More than a decade later, imagining Bernie Sanders as our President is no longer a crazy idea. Neither is Medicare-for-all. Don’t let yourself be stuck in a ’90’s mindset with the Pelosi’s and Clintons where MFA is “of course, a pipe-dream”, or even 2009, where the Obama team removed the milder Public Option from all discussion, thinking that no one would notice. MFA is an option. Let. It. Sink. In. HA!

          1. Spring Texan

            Exactly. Yes. Here’s a really interesting article about how even Brad DeLong doesn’t think middling solutions are the most politically feasible today:

            We tried to do health reform the Republicans’ way ,and what’s now clear with a Republican Supreme Court and with a lot of Republican governors, any attempt to do it the Republicans’ way is going to get shredded. We tried to do climate policy the Republicans’ way, and got nowhere.Until something non-rubble-ish is built in the Republican center, what might be good incremental policies just cannot be successfully implemented in an America as we know it today. We need Medicare-for-all, funded by a carbon tax, with a whole bunch of UBI rebates for the poor and public investment in green technologies. That’s the best policy given the political-economic context. If the political-economic context were different — well, I’m fundamentally a neoliberal shill. It is very nice to use market means to social democratic ends when they are more effective, and they often are..

    3. Eureka Springs

      From a must read, imo, article posted yesterday.


      But it’s important to understand that the successors to Pelosi and the Party leadership have already been groomed and decided, and they are more right-wing than Pelosi. This includes Ben Ray Lujan, a Democratic Representative from New Mexico who was just made Assistant Speaker of the House. He ran the DCCC for the past four years, where he turned over candidate recruitment and mentoring to the ultra-conservative Blue Dog Democratic Caucus.

      It also includes Hakeem Jeffries, a Representative from New York who is now the Chair of the House Democratic Caucus and who got his start as a corporate lawyer for Viacom and CBS.

      Also in line for Party leadership is Illinois Representative Cheri Bustos, who received the DCCC Chair post and was an executive in the healthcare industry before she came to Congress.

      The next generation of congressional Democratic Party leaders is more conservative than Pelosi, Steny Hoyer and the sitting leadership. They are in their 40s and 50s and will literally run the party into the 2050s.

      Anything worth doing must include a combination of abandoning and crushing the D party and its ways.

      1. Carla

        Agreed. Let us remember and LIVE these words from Dr. Martin Luther King, Jr :

        “This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism.”

      2. Brian (another one they call)

        The parties are relevant only to those that gain financial power from those parties. They only give a damn about their control. Since Americans are now overwhelmingly independent voters that have fecal choices at the ballot box, we do have the overwhelming ‘other’ that wants this nightmare to change. Many people go bankrupt trying to pay medical bills and that is uncivilized. Civility is something that can’t continue when it comes to our government working for us, instead of themselves.

      3. Adam Eran

        From Ralph Nader: “The Democrats could blow it again. They blew it in 2010, ’12, ’14, and ’16, against the worst Republican Party that Kafka could ever imagine. Cruel, vicious, ignorant, Wall Street-indentured, warmongering, anti-labor, anti-woman, anti-consumer, anti-children — these are their votes in Congress. Why aren’t the Democrats landsliding them? They’ve lost the state legislatures, the majority of state governors, the House, the Senate, the Supreme Court and the executive branch. Because they’re still dialing for dollars and that’s the most important thing.”

        Link: https://www.salon.com/2018/10/14/ralph-nader-democrats-are-still-weak-and-corrupt-could-blow-it-again/

        1. WobblyTelomeres

          Cruel, vicious, ignorant, Wall Street-indentured, warmongering, anti-labor, anti-woman, anti-consumer, anti-children

          Sorry. Got lost there. Which party are you referring to here?

      4. Carla

        My Senator, Sherrod Brown, has pronounced Medicare for All “just not practical.” In his 2018 Senate campaign, he spent $28 million to retain his seat. Here are some rounded subtotals of where that money came from, by category: Health Professionals: $3.1 million; Insurance, $1.1 million; Hospitals/Nursing Homes, $1 million; Real Estate, $1.8 million; and Securities & Investment, $1.5 million.
        Source: http://www.opensecrets.org

  2. Jack

    I think using the term All Payer is better than Single Payer, but I believe the system as described here is still too convoluted. Rather, I think the best solution is three fold. One, do nothing to regulate existing insurance plans any further. Rather set up an independent government supported health system separate from Medicare (at least initially). Call it One Care or something. Do away with Medicaid and roll it into this system. Make the acceptance of One Care mandatory for all physicians and hospitals. Just like Medicare set a price structure. Two, do away with pharma price fixing for One Care. Allow One Care to negotiate prices and import from overseas with no tariffs. Three, completely revamp the regulation of Doctor licensing as it exists today. There is a large and growing doctor shortage, in no small part due to the monopolies put in place by state medical licensing boards and the AMA. Eventually you can roll in Medicare to One Care. Keeping Medicare separate right now would placate the seniors who are worried about Medicare being diluted and eroded. Let the existing insurance companies compete with One Care. Eventually they would have to adjust their prices, service, etc. because companies and individuals would leave them and enroll in One Care.

  3. ACF

    All Payer is fine as a concept, but leaving intact
    a) the individual marketplace (Obamacare or not)
    b) Medicare
    c) Medicaid

    is not helpful. The three should be merged and all three function as an improved/enhanced Medicare funded solely by taxes, and everyone who wants to opt out of employer-provided/union provided/church provided care to participate in that system should be able to. Access to government paid care should not be keyed to income or age, just, preference and/or lack of alternative. The cost savings in not having to screen people for eligibility for government care (a real medicaid cost) would be significant. Eliminating the Obamacare complexity would be terrific too. Both on the admin side and the consumer side.

  4. Gregory Etchason

    Public Option “One Care” is the next step. The private monopolists will soon move on to a softer target than individual health.

  5. William Beyer

    Sadly, Uwe Reinhart, one of my favorite economists, died a couple of years back. He had keen insights on a boatload of topics, and expressed them with great humor and beautiful writing.

  6. simjam

    Sounds like more Rube Goldberg attempts to fix the system. To make providers happy the “buying them off” price would be astronomical. The fundamental problem is our current “system” of governing is pervasively corrupt. We need to start talking about fundamental change. Our Constitution is designed to prevent this.

    1. jonboinAR

      Y’all, we need to listen to what Carla brings up from time to time. The first kind-of-fundamental problem that needs to be addressed is the corporate and billionaire money complete swamping of our political process. (Thank God for the Internet, so far!) Move to Amend!

  7. jefemt

    I am 60, not eligible for medicare/caid too young, earn too much. I do not have insurance, as premiums are too high and- before it went away, I was exempt from participating in ACA as premiums exceed 8% of my adjusted gross. Riding nekkid.

    I attended a Medicare meeting last autumn, during the campaign season, hosted by a candidate. I assumed it was going to be about care/ insurance/ US medical system, but it was really a nuts and bolts primer for Medicare /caid eligible voter- taxpayers as a heads-up on 2019 changes, what folks needed to do/anticipate, with a panel of care providers, insurors, and administrators. I sat through it, and was astounded at the byzantine nature of the ‘system’. I finally turned to a couple kind faces sitting near me, and implored, ” Why do we put up with this nonsense?” It was like something out of Monty Python…
    The implied waste of time, man hours, effort, immoral anxiety that circles all health issues… predation on fear. My oh my

    In my mind whatever we come up with, it needs to be streamlined and simplified.
    We need to dump out on the notion of insurance. Payment for care is what it comes to. So:

    -One system of reimbursement for care for all patients
    -All eligible— no ages/groups excluded (The all-American Patriot Care Act) No more divide-and-conquer.
    – The system is the one that our legislators – at all government levels and entity-classes, use
    – No more segregation for military
    -It must be federal— our government, central banks – are the only entity with the power to create money, payments, debt, and taxes to nuance the funding
    -Implicitly, there will be cost controls, and doctors/ clinics/ corporations can choose to stay in business, or get out. No Hank Paulson legal tablet legal pad bail-outs.
    -Nothing precludes the most well-heeled deepest pockets from seeking out whatever additional care/ coverage they might, anywhere in the world.

    Obviously, there are implications that a few hypochondriacs will over-tax, and a few providers will ‘game’ the system. But the $8,000 night in a hospital, the $35 dollar tongue depressor-MUST come to an end.

    My two pennies

  8. Doctor Duck

    Not regarding the article itself but rather Yves’ prologue:

    I know this is somewhat petty but please don’t use the word affluenza to refer to a group of people. It’s a condition, not a cohort.

    1. Clive

      That is a correct colloquial useage of the term and what you’re describing is a compulsivity disorder — a significant and complex area of psychiatric practice. It needs careful diagnosis because there is a broad spectrum https://www.mind.org.uk/information-support/tips-for-everyday-living/money-and-mental-health/#.XGWBRxqnyf0

      Incorrect, I would go so far as to say sloppy and glib, non-clinical evaluations and mis-labelling is hugely damaging. Compulsive spending, compulsive hoarding, gambling addiction and similarly related morbidities are varied conditions and need specific treatment approaches. You’re right to draw attention to these matters which affect greatly quality of life and are even life-limiting. But if we want them to be looked at with the seriousness they deserve, we need to ourselves get serious and use the correct medical definitions where disease processes are present and not apply pop culture terms. Someone with, say, bipolar disorder who spends too much when going through a manic episode is *not* suffering from affluenza. A society which has skewed norms around money and wealth is.

      1. Doctor Duck

        I agree with you that the term has been trivialized in popular media. Still, I have seen no indication that it’s correctly used to refer to a group of people, perhaps as an analog of terms like intelligentsia. The only time I’ve ever seen it used that way is on this site, at least twice. If you have any other sources for that usage, I’d be pleased to see them.

    2. Joe Well

      I assumed she was making a joke with the offhand affluenza usage. She’s writing all this in the limited time available and I don’t expect her to be consulting style manuals.

      If you are making a roundabout criticism of her negativity toward the merely affluent, as opposed to the billionaires, I disagree. Our housing crisis is primarily due to the merely affluent preventing the construction of affordable housing. Our educational system is badly damaged by the merely affluent redirecting state aid away from poorer districts. Our healthcare system is beset by affluent leeches from specialists to hospital administrators to pharma salespeople. And we’ve seen what they’ve done to the Democratic Party.

      1. Doctor Duck

        My only point is that the perfectly good word affluent does the job. No need to invent a new use for a different word. If it was a joke it’s one she’s made before and it fell flat then too.

        But this has taken too much attention and space for what was a minor quibble about usage.

  9. XXYY

    So the big idea here is to standardize pricing for medical procedures and products, while leaving everything else as-is?

    As Yves notes, leaving the for-profit insurance system in place keeps most of the objectionable and wasteful features of the US healthcare system intact. It’s a tweak, not a reform.

    It’s also worth noting that this proposal will also face enormous opposition from many of the same forces that oppose Medicare for All. The gigantic profits in the US healthcare system are made possible by providers being able to charge whatever they can get away with. The idea that this is more “realistic” (which, in US parlance, means retaining more grift payments to politicians) than M4A seems dubious.

    If we’re going to confront the powerful actors that have a grip on our Healthcare system, let’s do it on behalf of something we really want, not just to enact another pointless half-measure.

    1. Eureka Springs

      +1 Why fight for incrementalism which still feeds the beast?

      I’ve always liked the old VA tri-care model.

  10. marym

    The countries that have implemented universal healthcare have eliminated private for-profit insurance for the common universal benefit package. In the US private insurers (including privatized aspects Medicare and Medicaid) are allowed an 80-85% medical loss ratio.

    A comparison of the success of all-payer structures in universal healthcare countries to the potential in the US has to consider the impact of this for-profit model.

    Another factor in the comparison should also be the degree to which hospitals and other provider entities are for-profit institutions. A cursory search suggests that in Japan (all), Switzerland (65%), and Germany (most) hospitals are not-for-profit.

    The for-profit insurance hospital industries have great political influence in the US, of course. Their profit model and the political influence it buys would have a big impact on the planning and implementation of any system designed to retain them as for-profit actors.

    In country as geographically and economically diverse, universal healthcare will be a challenge even in a single payer system. Adding complexity to any of its elements (multiple payers, state-level implementations, retaining some existing public systems, retaining elements of privatization) introduces multiple points of potential failure and gaming.

    1. Carla

      “In [a] country as geographically and economically diverse [as the US], universal healthcare will be a challenge even in a single payer system. Adding complexity to any of its elements (multiple payers, state-level implementations, retaining some existing public systems, retaining elements of privatization) introduces multiple points of potential failure and gaming.”

      marym, you said a whole lot here. The Advantage plans’ gaming of Medicare is just one poster-child that proves your point as it continues to crapify the largest and best government health care program the U.S. has ever had.

      1. marym

        Thanks for clearing up some of my typos! I don’t think there’s any reason to believe that for-profit insurance can ever provide a path to universal healthcare.

  11. Eclair

    The term ‘politically impossible’ is a mealy-mouthed cop out. A way for the power elite to tell us peons that, no, you can’t have more porridge. While they dine on caviar, quail, champagne and out-of-season organic strawberries.

    A healthy and educated citizenry is the basic building block of a Democracy. It’s non-negotiable.

    Throwing off the reign of a ‘divinely anointed’ king was politically impossible. The abolition of slavery was politically impossible. Universal suffrage was politically impossible.

    1. Yves Smith Post author

      There was violent action to achieve all of the changes on your list. See Simon Schama’s account of revolutionary violence in France, including heads of aristocrats murdered on the street being put on pikes and paraded about. 620,000 dead in the US civil war, which was 2% of the population. The suffragettes didn’t kill people, but they used violence as well:

      It’s conveniently forgotten – even by their biggest admirers – that the suffragette movement is the only mass movement in British history since the Luddites to espouse violence as both a legitimate and necessary tactic…

      It is simply untrue to state that the suffragettes only targeted property, not people. That may have been true of the leadership, but certainly not of the rank and file membership. In one year alone, 1914, shortly before Mrs Pankhurst disbanded the WSPU’s campaign to concentrate on the war effort, there were several incidents of suffragette violence against individuals: Lord Weardale was attacked with a horsewhip by Mary Lindsay, who mistook him for Asquith, the prime minister; a bomb on a Blackpool train badly burned a train guard. Meanwhile there were widespread reports of suffragettes practising with revolvers on shooting ranges around London. Had war not broken out in 1914, there can be little doubt that suffragette violence against individuals would have intensified still further.


      Please tell me who in the US is prepared to go this far in an era of mass surveillance, where merely having the wrong views on Twitter, wrong interests on Facebook, or an arrest record (even for merely participating in a demonstration) is a fast path to unemployability? I don’t see anyone in the US willing to take this risk, or the risk of imprisonment, which is what happened to prominent Vietnam War protestors (the reason Daniel Ellsberg released the Pentagon Papers is he knew people personally who had been sentenced to prison over their opposition to the war, and he didn’t feel he could consider himself serious about his personal protest if he wasn’t willing to make that sacrifice. He fully expected to be incarcerated for years, likely decades).

      It’s easy to advocate that others take the revolutionary path when you don’t have to bear the cost.

      1. jefemt

        Canada chose to do it and not a drop of blood was shed. Not really any significant arguing.

        The bigger picture/ notion we need to get back to is defining and recognizing civil society Utility functions. Then, heavily regulated monopoly powers granted.

        Then, the hard discussions –that care is being applied to a mortal being.
        Compassionate palliative care is in the mix. Somehow, Sarah Palin vilified the idea, but the notion of death panels really is more the friends and family stepping in to pull plugs.

        Universal care on the trajectory toward universal death. Then, deep in our navel gaze, can we come back to social justice and a deeper meaning to life than shiny baubles?

        1. Cal2

          “The bigger picture/ notion we need to get back to is defining and recognizing civil society Utility functions. Then, heavily regulated monopoly powers granted.”


          Fire Departments, Sewage Treatment, some water and ambulance functions are public.
          Sewage treatment is a definite component of public health. While it’s a simple plumbing, energy using and bacteriological process, there are no different plans or coverage levels for treating sewage.

          Landlords pay based usually on either a flat fee, numbers of appliances or water usage.

          While there are a few elite private fire departments around Northern California they work in addition to public fire protection. The slippery slope was public fire department and public health ambulances being replaced by for profit ambulance rides. Demand fire service and local non-profit hospitals are part of your property taxes.

          What might work for promoting improved health care is passive civil disobedience, at a philosophical level applied to people’s willingness to obey government and fight it with a death by a thousand cuts of non-cooperation.
          “Dear IRS, I can pay my health insurance, or I can pay my taxes. I’m sorry, this year, insurance wins out. When we have Medicare For All, you will receive a lot more money.”

      2. Eclair

        Goodness, Yves, I am not advocating armed rebellion, for the record.

        What I am advocating, is to work to change the ‘political’ climate; to manufacture consent. Like Bernie Sanders, just keep talking about it, spreading the word.

        Apologies that all my examples did involve violence. But, violence is the name of the game …. the daily small violences inflicted on poor people and indigenous people and brown people by our government and our corporations. And we have all talked about that here on NC. And many of our commenters suffer those paper cuts of violence.

        I have led a fortunate life, yes. Born at the right time, lucky in my parents and my genes, my education and my ‘investments.’ But at one point in my life, divorced, jobless (thus, without health ‘insurance’), house in foreclosure, two small children, I really believed I would end up as a ‘bag lady.’ I have never forgotten the terror, the sleepless nights, the constant gnawing anxiety, the loss of confidence.

      3. William Hunter Duncan

        I suspect violence is inevitable, and will commence as soon as millennials find debt servitude leads to reduced life expectancy.

        Of course, no government in the world is more likely than this current government to perpetrate violence against it’s own people, the moment the people start thinking seriously about that statement in the Declaration of Independence about what needs to happen when TPTB are destructive toward life, liberty and the pursuit of happiness….

  12. Lynne

    If we say, for example, that New Yorker doctors and clinics should get paid more because rents are higher there, that doesn’t do much but raise rents, does it?

    As one of those lawyers dealing with fixed costs, it infuriated me that East Coasters calling for LSC saw (and see) only those costs that matter to them. They don’t care that i have to drive 400 miles round trip for even the most basic specialists if I want competent medical care, let alone that I spent hours driving to courthouses because my circuit was 250 miles end to end, with zero public transit, and that compensation for mileage was capped, or that the nearest law library was 60 miles away. You get the idea. All they cared about was my rent and malpractice premium, because that was their big expense items.

    1. Joe Well

      As a datapoint, NYC public school teachers are paid less than their counterparts in Westchester. Living in the capital of the world is supposed to be compensation enough.

      I really think that having a caste of overeducated one percenters in charge of caring for people is a bad idea. If more people realized how many specialists are in the 1%, and the fact that this is due to AMA cartel tactics preventing new med schools, there would be outrage. Lower doctor pay should be an explicit goal of any reform.

      1. Lynne

        Yes. I suspect there would also be outrage if more people were aware that in the 1980-90’s, there was a boom in doctors owning interests in labs. And, as well, that there was shortly thereafter an increase in doctor-ordered tests, which the AMA blamed on the need to practice “defensive medicine” due to an alleged boom in medical malpractice cases.

  13. BoulderMike

    I skimmed the article and I don’t care for the watered down proposal. But, the author lost me at:

    Affordable health care providing universal access has long been a holy grail of the Democratic Party.

    When your first statement is utter nonsense, your opinions have no credibility. Democrats want M4A, not the Party. Also, how convenient that Obama now supports it when he had all the power to implement M4A as President. Easy to support it now that he is a private citizen, and a wealthy one covered by Government Health Care.

  14. Matthew G. Saroff

    I live in Maryland, and the system works, it has taken Maryland’s position in healthcare from one of the most expensive to one of the least expensive among US states, but the improvements are incremental: Even in Maryland, the price* of healthcare is too damn high.

    *There is a COST issue, where certain procedures involve inputs that make them expensive, but the US healthcare issues are primarily a PRICE issue, where actors are incentivized to charge as much as possible despite the underlying costs.

  15. Code Name D

    As established with AOC’s Green New Deal, the goal isn’t necessarily to be an effective policy to combat climate change, but to force the issue into political circles so that effective policies can even be disguised on the floor. GND establishes a “first step” as it were. If the first step can not even be discussed, then any discussion about anything more substantive is a waste of time.

    IMMHO, Medicare 4 All is along the same lines. M4A in and of itself is simple, eliminate the age restriction for Medicare. That is it. While it would/will deliver real relief to a lot of Americans, it’s delusional to think that M4A will some how solve the healthcare crises. Especially when you consider that Medicare in and of itself still has plenty of issues.

    But if M4A can’t even be brought to the floor, this one simple and basic idea, then attempting to discus more meaningful reforms is rather pointless.

    Insteps “all payer” which attempts to present itself as an alternative to M4A should congress refuse to consider it. If it’s a true reform (meaning it will bring relief to Americans), then it’s foolish to think Congress will be any more inclined to consider it. If, however congress should pick it up, we must ask if all payer is some how less effective than M4A, or worse a further “reform” promoted by the industry intended to head reform off at the pass.

  16. elissa3

    Here in New Mexico an all-payer type bill is now working its way through our current legislative session. So far, one can be optimistic.

  17. Unna

    I suppose there’s no difference between a government saying, you can only charge $10 for X vs. a single payer government saying, I’ll pay you $10 for X. And then having a fund for those without insurance. But, then I suppose you’d have to have the government force people to buy insurance with penalties like Obamacare, or pay for it with with payroll deductions, whatever.

    But the unfairness comes in this way: If everybody pays the same in a payroll deduction, then it’s a regressive tax hitting the poor and working class harder as a percent of their income unless the deduction is set as a direct tax on a percentage of income with no upper limit as in Soc Sec. It may also hit older people harder if they are charged higher rates due to age risk. Which is why paying for medical care with taxes – a combination of progressive income taxes and regressive sales taxes is better and fairer. Even the payment of a portion with regressive sales taxes has some “progressiveness” built into it because presumably the rich buy more stuff than the poor and so pay more regressive taxes.

    Also in America you hear about young people complaining that they are subsidizing the older people with higher premiums than they’d otherwise ought to pay based on lower personal risk as a young person. Disconnecting paying for health care from risk weighted premiums and onto taxes, like Canada, diffuses that argument to a large degree. That’s because, although young people consume fewer medical services, they also generally pay lower income taxes than the middle aged and spend less money since they’re young and earn less money than middle aged people in peak earning years. Also, every Canadian twenty year old knows that when they are sixty they’ll be covered just like their parents or grandparents are. So age fairness is not an issue. I’ll pay for someone else when I have the money based on my income and affluence, and someone else will pay for me when I don’t, because I’m very young or very old. It’s called Socialism. So in Canada you don’t hear young people complaining about unfairness to them based on their age like in the States.

    Caution: I’m not an economist and so regard these as some random thoughts.

    1. marym

      It’s also an advantage to younger people to have the healthcare of their parents and grandparents covered, and not become an inter-generation responsibility – parents not able to give their kids a helping hand because they need to help their own parents as unpaid caregivers or by paying for care, for example.

      1. Unna

        And conservative political parties can’t exploit and divide people on generational differences for political gain and to prevent progress.

        I think Bernie’s plan uses employee and employer deductions and so I’m wondering about that. Why doesn’t he use taxes? Not closely familiar with the whole thing and so I don’t know.

  18. Dwight

    With the all-payer system, the U.S. could leave people working for large corporations with their private insurers, but create a National Health Insurance plan for those without access to employer-based health care, whether they are unemployed, self-employed, or employed by a small business. (This might just be a Medicare expansion) This would also give people the freedom to leave their corporate employment without the coercive worry about losing their insurance. Tax subsidies for employer-based health insurance should also be phased out, putting employer-based insurance on an even footing. All this might be enough, or it might be a way to transition to improved medicare for all. Kamala Harris’ posturing about abolishing private insurers seems designed to protect private insurance profiteering, since I don’t believe for a minute that she and her party are trustworthy.

    1. Joe Well

      In every other country I know of, private insurance is offered on top of the mandatory national health plan, which is automatically deducted from pay just like FICA is here in the US.

      The fundamental issue is that universal entitlements (Medicare, or even fire, police, water, parks, the post office) are far more politically defensible than piecemeal means-tested benefits or benefits that only are available to part of the population (like TANF, SNAP, Medicaid, or even Affirmative Action or Pell Grants or state universities). Because then, it becomes something for those people. And as someone who has been self-employed for years, believe me that it arouses a lot of envy and resentment among people who have responsibly chained themselves to an employer and a program to help lucky people like me will not be popular.

      Also, taxing employer-provided insurer benefits is perfectly sound and just policy, but it’s been proven a political lead balloon and the Republicans have shamelessly whipped up opposition to it in the past. It is government welfare for the middle class, like the mortgage interest deduction, and as such cannot possibly be done away with until something better (like Medicare for All) is offered in its place.

  19. JeffC

    Minor datapoint: My (US) internist, definitely not an aggressive pill pusher, popped the depression screening questionnaire in front of me at my last check-up. I asked why, and he said the insurance companies are requiring it now.

  20. bruce wilder

    Price discrimination schemes are so common across all industries because they are one of the few practical ways of efficiently coping with cost structures that feature high fixed and sunk costs.
    Having a single price is one of those ideas like a simple, flat tax that sounds good to those who do not understand an inherently complex problem and do not want to be bothered by complexity (or be dictated to by experts leveraging complexity).
    Gaming of the system by vendors and providers is certainly a hazard, but realistically if the ultimate objective is a high standard of health care, then it is necessary to create institutions that pursue that goal strategically with intelligent purpose. Which probably entails price discrimination schemes driven by pursuit of effective health care outcomes. It is not about “a level playing field” or some other neutral standard. It has to be about organizing for control and feedback. In most every other industry that means fixing and administering prices, but never having a single price for every customer and circumstance.

    1. Joe Well

      So what is your criticism of the concrete case of Maryland? It just doesn’t exist? The numbers are lies?

  21. Paul P

    Won’t have New and Improved Medicare for All until the organizing
    for it occurs on a neighborhood level. Say four blocks from your house. In a forum at the local library. At a table in front of the local supermarket. Meeting groups to discuss the issues.

    The political clubs maintain a thin relationship between the party and the constituents. This was brought out well in HBO’s film Brexit, but it applies to us in the US as well. Cambridge Analytica could do its will because the establishment had abandoned the popular constituency.

    “Medicare for All’ is in the air, but undefined and the public must now render their judgment while facing a blizzard of pros and cons, alternative proposals, and misinformation from Democratic politicians, and from corporate and right wing media and money machine.

    The only counter to this power is neighbor to neighbor contact and time. No organization is doing this work. So, the issue has been decided.

  22. Joey

    Medicare requires depression screens and other ‘quality measures’ through ‘meaningful use’ of electronic health records (EHR). The only apparent purpose of EHR was to allow Medicare to reduce physician reimbursement not through standardization, but through escalating sets of arbitrary requirements. This is also why you get an email with disease management advice or reminders for cancer screening.

    I like the onecare name and concept, not only to start the process then incorporate the rest, but also to not have to fold people into a very broken Medicare system. Medicaid is the better platform, albeit woefully underfunded in most states.

  23. Davey

    The country should continue moving towards a publicly funded, privately delivered health care model that works in high performing systems elsewhere. Put the dollars in the hands of families to choose among a regulated list of provider networks. Phase out the tax preference for employer-sponsored coverage. Guarantee price transparency.

    I suspect that many people don’t know how much their employers pay for coverage, which ultimately comes out of the employee’s pockets.

    As an example, my employer pays about $13,500 towards a bronze Blue Cross Plan and I contribute $3,500 for a total of $17,000. My self-employed consultant neighbor pays about $11,000 for a roughly comparable bronze Blue Cross plan. Why the $6,000 difference in insurance costs?

    1. Bob Hertz

      Dave, is this family coverage? your employer package costs over $1400 a month and then you still have a high deductible.

      If this is single coverage, how old are you and what state are you in?

      1. Davey

        family coverage for my neighbor and I we are both in our mid 50’s, in Maryland. My only observation here is the insurance company collects 17,000$/yearly for my plan and $11,000 from my neighbor for equivalent high-deductible HSA-eligible plans.

  24. Bob Hertz

    Maryland does have an All Payer system for hospitals, but health insurance premiums in the ACA exchanges are very high and getting higher.


    1. The rates were set high enough for Johns Hopkins hospital to flourish.

    2. No controls exist on the number of admissions.

    3. No controls on the prices of outpatient care.

    4. The ACA risk pool is assumedly old and sick.

    What we could do nationwide is to have a law that states the following:

    – if you need to undergo emergency care, and your insurance does not cover, the most you can be charged is 125% of the Medicare rate.

    This would not take a tax increase of any kind. It just takes a smidgeon of political courage.

    One final note….the cost of insurance billing is indeed wasteful, but it is nowhere near 30% as Marshall implies. There are numerous companies that take over all insurance billings for a fee of 5 to 10 per cent of revenue, and these companies are making a profit too.

  25. Synoia

    The UK NHS system, as badly underfunded as it is, has NO BILLING.

    This is what I remember of the funding…many years ago and not a complete understanding:

    Doctors generate a list, and a paid a lump sum per person on their list. Their list can be open or closed. If open they accept all comers. If closed they accept no newcomers.

    Hospitals are paid in a similar manner. All employees, including Doctors, are paid on a pay scale. Becoming a Doctor in the NHS system was not a path to riches.

    Billing is expansive and labor intensive, and is to be avoided.

    People working contribute a fixed percentage of their gross pay to the NHS. I believe the percentage was 2%, but I could be in error.

    The problem with Medicare for all in the US, is that the US system comes complete with a huge helping of greed. Eliminating the greed gores many oxen. Many rich oxen who contribute to many politicians.

Comments are closed.