Aaron Carroll has a follow up post about Singapore’s health care system. Typically, Singapore’s health care system would be too obscure even for me to mention; but, as some may recall, Singapore (see, e.g., here) was a go-to example for opponents of Obamacare when asked to point to a market based health care system. But, it was never really all that market-based in the first place.
That’s how you get conservatives advocating for Singapore’s health care system without any real understanding of it. Singapore’s system has massive subsidies for nursing homes, rehabilitation care, and home-based care. It requires mandatory savings – 36% of wages spread over various accounts. The government also provides a basic level of care that’s heavily, heavily subsidized. And here’s the kicker – it relies on tons of government intervention in the market to keep costs down. They use centrally planned and fixed budgets, they control the acquisition of new technology, they regulate the number of students and physicians, they use purchasing power to buy drugs more cheaply, they have an employer mandate for foreign workers,and they have a national EHR. They’re also not the most open society in the world.
But, now, even that seems to be insufficient in Singapore. Carroll’s new post notes that Singapore is adjusting its system to include even more government involvement.
I understand being skeptical of Obamacare. I even have fears of my own that it won’t work very well. But the system we have is just awful – much, much more expensive for the same or worse results than the rest of the world. And health care is not some unique problem for the U.S. We’re all nations composed of deteriorating human bodies. So the refusal to educate ourselves about systems that work and don’t work in other places is maddening. Historically, we’ve been a nation of pragmatists. Our redesign of our health care system has been hobbled by ideologues. Although, I guess I have to wonder how much is ideology and how much of the ideology is just pretext camouflaging the interests of those getting wealthy off the inefficiencies of the current system.
Dog, I started in Healthcare law in 1991. Clinton’s model would have basically driven small healthcare plans out of business and relied on about 5 plans to administer all private healthcare. The small insurers and MCOs I represented were rabid, using idealogical appeals to criticize the plan. Most everyone else was silent, but big Pharma took it on and the plan died. (An Obama care plan, maintaing small and mid-size insurers, could have been passed in a heart beat.)
The opposition this time has been far more idealogical, as I see, driven by Republican extremism. Most players are on board with obamacare, because it provides a flood of new insureds to the insurers and provides a stream of new revenue to providers.
It contains no meaningful cost-cutting mechanicsms. If it did contain such measures, the healthcare stakeholders would have torpedoed it.
The providers are in quite a quandry. They must lower costs or government will eventually lower them. But no one will take the first step into door of cost-cutting because some other provider type will cut them out of more revenue. As it stands now, we are a large hospital driven model and the cost savings must next come from them. It will be no easy challenge to get it from them. Our fragmented payor system denies payors bargaining power that can dram down costs. That is why I support single-payor, giving the government monopsony buying party over all healthcare. That is the only solution to the cost problem.
We have four major problems in healthcare right now. Provider-induced demand, which can only be crushed by abstemious reimbursment policies by single payor. Lack of coverage will be partially cured by Obamacare. Third, we have spiralling costs, which can only be controlled by single payor. Fourth, we have massive technology overuse which can only be tamed by single payor. All Obamacare gets us broader coverage which is a boon to both payors and providers. No wonder the biggest oppenents are greedy old tea partiers.
Am I correct in perceiving a hospital consolidation over the last decade or two? If so, does that primarily put upward pressure on prices?
Hospital Consolidation tends to raise prices because costs increase, competition is lost, and market power is gained.
You do correctly perceive a massive hospital consolidation… look no further than the Indy health-care groups that have taken over the small city hospitals. The Indy-area health-care alliances, at least some, are themselves part of larger national health-care alliances.
My non-scholarly mind tells me, as Carlito suggests, that we would be better off with single payer. I’ve thought this ever since I first heard politicians talking about this, back when I was a kid in the 60s… of course, back then, it was known as socialized medicine, in honor of the Soviet Union, I suppose, Red Scare and Cold War being what it was. The vilification of the word “social” has always amazed me, just as an aside.
A different time and a different name, but as Billy Preston once sang, “Will It Go ’round In Circles” and the answer to that, as per our medical industry, is a definite “yes.”
Odd.
I used to use the Singapore model to help sell health care reform pre ObamaCare.
I never considered it much market based at all.
Carlito nailed exactly what i think about Obamacare in my opposition to it, when he said in Comment #1, “It contains no meaningful cost-cutting mechanicsms. If it did contain such measures, the healthcare stakeholders would have torpedoed it.”
That sentence says a mouthful. The costs have been the main reason people have been clamoring for a political solution to health care as a problem. The concession is that the main problem doesn’t get solved. Therefore it is worth supporting?
The healthcare stakeholders would have torpedoed it. So, the insiders who are skimming all the profits from the unaddressed exorbitant costs have no opposition- meaning, they will continue to gain their high profits, which as most complaint I hear and read about the high costs are part and parcel to one another. Therefore it is worth supporting?
Please, hit me in the face with a shovel.
I continue to contend that insurance is the problem itself. It drives the costs up due to keeping the customer as distant as possible from the actual cost of delivering services. It generates massive non-productive overhead due to paperwork and book keeping. Insurance gets misused as pre-paid care, which again jacks up the costs.
So, there’s my opposition. It’s all practical, not ideological- although I could give that too.
One other item in Carlito’s Comment #1 regarding fragmented payers having the effect of not driving prices down. Please explain to me why that isn’t true for, say, electronic devices. We don’t have single payer for computers, and yet their capabilities grow exponentially while to prices go down. And it’s still a very profitable industry. How is health care materially different in economic dynamics from computers, free of ideology?