Health Care Debate

It is
charitable to call it a "debate" about health care.  It is
really a flame war with a veneer of civility.

It started with an opinion piece published in what is ordinarily a
respectable publication: the Los Angles Times (free registration
required).  Two bloggers jumped on it.  Then the
comments came in.

The bloggers who weighed in on this, href="">Brad
and href=""
rel="tag">Ezra Klein, both
correctly identified the argument as deeply flawed.  But both
the main flaw.  And the people who left comments picked up on
points, but missed the big one.

face="Helvetica, Arial, sans-serif"> href=",1,6553974.story?ctrack=2&cset=true">

Universal healthcare's dirty little secrets

Patients in countries that provide government insurance
experience hurdles to care such as extremely long waitlists.

By Michael Tanner and Michael Cannon, MICHAEL TANNER is
director of health and welfare studies and MICHAEL CANNON is director
of health policy studies at the Cato Institute.

April 5, 2007

AS THEY TACK left and right state by state, the Democratic presidential
contenders can't agree on much. But one cause they all support
— along with Republicans such as former Massachusetts Gov.
Mitt Romney and California's own Gov. Arnold Schwarzenegger —
is universal health coverage. And all of them are wrong.

What these politicians and many other Americans fail to understand is
that there's a big difference between universal coverage and actual
access to medical care.

Simply saying that people have health insurance is meaningless...

that I do not mean to imply that Klein, DeLong, and their commenters
are glib; to the contrary, they make a lot of good points.

The article is supposed to present an argument against universal health
coverage.  It suffers from a number of flaws.

One, their thinking is muddled.  Many debates about health
care policy suffer from this problem.   In considering health
care policy, it is necessary to make some distinctions between concepts
that often get conflated.  

The first distinction to make is the distinction between universal
coverage and single-payer coverage.  This seems obvious, but
they are not the same thing and they do not necessarily go together.
 Often, it is assumed that they do go together, and it is then
assumed that they mean the same thing.

The second distinction that often gets lost is the distinction between
health care costs, and health insurance costs.  Third, there
is an important distinction between health care costs, and health care

Health care policy is a complex subject.  If we are to have
any hope of understanding it and debating it in a rational way, we have
to be clear about it.  Maintaining these three distinctions is
necessary for understanding and for clear communication.

So what are the implications of these distinctions?  First,
the point of universal coverage is an humanitarian one.  The
point is to get coverage for everyone, obviously.  That is an
entirely different objective than the goal of single-payer coverage.
 The goal of single-payer coverage is to improve efficiency.
 Therefore, economic arguments pertain to the issue of single
payer coverage, while the issue of universal coverage is more closely
related to values and ethics.  

There is some overlap, but for the most part, if you want to argue
about economics, you need to look at the efficiencies gained by getting
rid of redundant private insurers.  The other side of this,
some would argue, is the potential for competition to improve

The issue of universal coverage does have the potential to affect
economics, but the influences are indirect.  Universal
coverage has the potential to increase direct health care expenditures,
but it also has the potential to lead to significant savings. 
The extent to which either of those things actually would happen is
open to debate.  It is very difficult to anticipate how it
would play out, or if there would be a net gain.  So the main
reason to consider universal coverage is not an economic one.

Second, let's look at the distinction between health care costs and
health insurance costs.  Health care cost is the cost of
providing health care.  This is different than the cost of
buying health care, which is different than the the cost of buying
health insurance.  Also important to consider, is the fact
that more than one kind of insurance is used to pay for health care.
 Some health care is paid for by auto insurance, some by
worker's compensation insurance, and some by various kinds of liability
insurance.  Note that if we had universal, single-payer health
insurance, there would be no need to have auto insurance, property
insurance, and worker's compensation pay for health care.  All
of those costs would go down; in some cases, the reduction would be

Third, let's examine the distinction between health care costs, and
health care expenditures.  Only part of the cost of providing
care is actually reimbursed, whether by insurance, or by patients and
their families.  Some costs are absorbed by providers, others
are absorbed by various agencies, governmental and otherwise.

All of this is background, by the way, for the discussion about the
article and the blog posts about the article...which is to be

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Intriguingly, countries that have universal health care, such as Australia, the UK, and most European nations, seem not to be falling apart, and much of the troubles in funding this that they do have seems due to private health insurance and the demands of the high-end medical profession.

I couldn't agree more. the questions of how much to fund high-end, or
end-of-life care, for that matter, are separate issues. I hope to
bring that up in a follow-up post. It is another distinction that is
necessary to keep in mind when thinking about and analyzing health
care policy.

Plus, it would be a lot easier to afford full health coverage if we
did not spend half our budget on defense.

As a user and employee of the UK national health Service, I get very confused (and angry) thinking about this debate. Is universal coverage the same as universal access? the latter we think about over here - I suppose the choice of "coverage" has a very insurancey feel about it, so that may mix me up.

I could not agree more with John Wilkins either. the NHS is a great system, and despite what you may hear about it, it works. In some respects I think tough that there is an issue in the funding of the NHS compared to public health funding, given the potential rewards of the latter. pervention being the best cure, and all that.

As a healthcare professional, I would always encourge people to go public (meaning the state run services) except maybe for once off, non recurring, otherwise healthy person, no long term implicaions, fixable interventions i.e. if you are healthy but misfortunate seems ok to go private - but, if like 95% of the people who have significant illness, you have something chronic/ life impacting - go public!

I written a little about the subejct of helath care in the US, where I've looked at the numbers. The US actually spend as much on public expenditures as many countries with universal health care.

My posts about the subject can be found here

Note that if we had universal, single-payer health insurance, there would be no need to have auto insurance, property insurance, and worker's compensation pay for health care. All of those costs would go down; in some cases, the reduction would be dramatic.

On the issue of this, I would argue vehemently that there is still a healthy auto/home insurance and Worker's comp system here in Canada, and while you still get access into the public system at first, the insurers are gatekeepers after that. And they play just as much hardball as do your insurers down in the states. Yes- you can wait to get treatment through health care, but it will be a LONG wait, as some treatments are available only at select centres, in other provinces, and therefore there is no priority placed on you as an "outsider".

The Workers Comp here in my province is running at least a twenty million plus surplus right now. They are supposed to be an agency that is not politically involved and is unbiased but there are questions in my mind as to how that can be when there is a government department in charge of overseeing their management. They have the most amazing facilities, pay their staff handsomely, and all that jazz. Doctors visits and services are paid by WCB, but at a capped and lesser rate, that does not take into account the increased paperwork and time needed to fully process a WCB claim, and can make it fairly easy for doctors to turn down cases if there is any way to do so. (Sports Medicine doctors do not accept WCB patients at all, even though in theory, they would be the experts in how to fix pulled muscles.) For diagnostics like MRI though, they pay a premium to jump the line. It is wierd. There is no-one to complain to without putting benefits into jeopardy. Which means people shut up and wait, sometimes until it is too late. Employers still envourage employees not to report, as their rates will go up for lost time claims.

In one instance, if you have an open WCB claim, or auto insurance claim, you are specifically barred from using a public program for the same condition, because the WCB and Insurance companies operate their own version of this type of program. Unfortunately, the difference is that the one program is attached to a teaching hospital, which means that theoretically you have more options available and they end to be less biased.

The auto insurance industry is making a killing off a government led initiative that saw payouts to those in auto accidents that are deemed minor capped at $4000.00 in Alberta. They posted record profits in the billions last year. We still pay the most for insurance in the country. Health costs like doctors visits are still billed to the public system, I believe, while PT and the like are paid by the customer and then reimbursed IF approved.

We still need house insurance, not to cover medical bills per se but to cover pain and suffering.

You also get supplementary insurance from your employer that covers dental and prescriptions. (If you are lucky, and have a job that offers it, or offers a plan that is flexible.) Many of the working poor here are not covered by government or private insurance, so they forgo medication or dental care in order to eat. Children are covered for this under a fairly new initiative in Alberta, but if you are an adult- good luck. If you are covered under a government welfare plan, you get the very basics covered for medication and dental. I don't think there is any coverage under CPP Disability.

There may be mistakes here as I am working from memory, but having researched this to death the last few years, I am pretty confident that what I am writing is accurate.

There is a difference in how each province deals with insurance as well. Manitoba and BC are examples of public insurance systems, in which it is no fault and payouts are capped. Alberta and Ontario are private with little government regulation attached- except for the 4 grand payout cap in Alberta. WCB is different as well, as each province recognizes and deals with injuries and the disease trajectory in a different way. Recently, for example, Nova Scotia was found culpable for chronic pain payouts by the Supreme Court, but other provinces have not followed suit.

It is definitely a hodgepodge, and was an education for me as I delved into the intricacies and idiosyncrasies of being insured in Canada.

By impatientpatient (not verified) on 08 Apr 2007 #permalink

I used to work for the NHS, and like Aust I'm constantly amazed by the lack of coverage in the US.
I've relatives in both the US and Canada, and although they have had excellent treatment, it seems expensive in the US and (occasionally )complicated in Canada. My uncles open-heart op in LA cost at least $175,000 (as an MD, he got a discount). My mother here in the UK got septicemic pneumonia and spent a month in ICU. Cost was zero. Thats the difference between private and public.
Of course there are things wrong with the NHS (where shall we start!), but at the end of the day, I and my wife know we have healthcare if we change jobs, have no job or if one of us has a long-term condition. My relatives in the US cannot say the same thing.
BTW - why did anyone think that an article from the Cato Institute would any connection to the real world?

I also wanted to let you know that there are health care premiums in Alberta that everyone, unless you meet the low income threshold, is expected to pay. About 90/month for a family and 60/month for a single person. Many employers , but certainly not all, offer this as a benefit. So, there are many people who shell out around a thousand dollars a year for health care. It is certainly not "free" but neither does it cover the full cost of providing health care for three million people either.

By impatientpatient (not verified) on 10 Apr 2007 #permalink