One of the worst problems with the deficit hysteria that has swept Washington, DC is that it is also accompanied by deficit solution blinders–blinders so powerful they allow the “serious people” to pretend the simplest solutions to our deficit problem literally don’t exist. The latest example is David Leonhardt of the New York Times:
We have come to believe a story about the deficit that is largely not true.
It’s a comforting story, to be sure. It holds the promise of a painless solution, because it suggests that the country’s huge looming deficits are not really our fault. Instead, they seem to stem from weak-willed politicians, wasteful government programs that do not benefit us and tax avoidance by people we have never met.
Leonhardt goes on to explain how we will “need” to cut Medicare and Social Security benefits and/or raise taxes.
In fact, though, the “comfortable story” is basically right. Our deficit really is a problem of weak-willed politicians–or, more technically, a very corrupt political system that protects huge inefficiencies from which a few big donors profit .
The main cause of our long-term deficit is our absurdly inefficient health care system that costs nearly twice as much as anywhere else in the world. If politicians honestly looked for a simple solution to this problem, within five minutes they would find out almost every other industrialized nation on Earth has it. It is single payer, or at least a government rate-setting all-payer system of non-profit insurers. If we simply adopted a single-payer health care system, roughly as efficient as France, Finland, Norway, Australia, Denmark, England, or New Zealand, we wouldn’t have a deficit.
To his credit, Leonhardt at least makes vague, indirect reference to this fact while, of course, avoiding the phrase “single payer” or the true scale of the problem. That is more than most “serious people” say when they talk about the deficit.
Even Medicare and Medicaid don’t look intractable. After all, every other country in the world, including some that get medical results as good as ours over all, spends far less on health care than we do. It is possible.
There is a simple “magic bullet” (to use a term with its roots in medicine) for our deficit problem: Adopt a single-payer system modeled of any of a dozen other countries and our deficits goes away. It actually is that simple.
Dr. William Hsiao’s single payer draft proposal for Vermont is just the latest evidence that we can give everyone insurance on par with what they have now but for roughly 25 percent less.




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Or we could close, say, two-thirds of our over 700 military bases overseas.
Exactly how do other developed countries keep medical costs lower? Eliminating the profits of intermediaries is only a fraction of their lower costs. And some western European countries DO have non-govt intermediaries that make profits.
And I would caution you to think really hard about relying on the USG to pay for something as vital as medical care after experiencing the current & prior prez. You’re assuming good will of the govt, which is clearly NOT the case.
the administrative waste, not even the profits is a huge issue. Doctors and nurse in American spend like 3-10 hours a week on paper work almost due totally to having multiple payers with different rates rules and what not
Canada’s universal healthcare is currently under attack to be slashed. Total dollars is cheaper than the US, but when one compares with other costs in Canada, the cost is astronomical. Even universal, is so damn corrupt right now, that it would solve nothing for the US. I know I might be alone in this line of thinking and wouldn’t trade with you for the world right now, but Canada’s healthcare is to the point now that you can’t even get an appointment with your doctor unless you are dying or can wait for weeks, if you can get in at all because he’s always “double booked” whatever the heck that means.
The simple way to eliminate the deficit, is to slash war spending to 0 and to cut the military budgets to the bones.
Jon –
I’m a big single payer advocate, with a Medicare buy-in or Public Option as a fallback alternative. However, I question whether just going to single payer eliminates the entire deficit, or are you talking about it just eliminates the Medicare portion of the deficit? Clairification? Numbers? Linkys?
First there would be noticeable reductions in the current federal spending, Medicare, Medicaid, SCHIP, Federal Employees, etc…
The other point is that by reducing the amount corporations are currently spending tax free on employee insurance you would result in the money being spend in a taxable manner for the most part probably a combination of hire pay and profits.
Single payer as a deficit reduction method is far too humane and rational to be considered seriously in contemporary US policy debates. Policy proposals must meet a minimum level of sadism in order to qualify for admission into discussion.
Again, only touching the surface of the costs.
The answer to my Q, according to Stevens’s Europe’s Promise is stakeholder panels (medical providers like hospitals, docs; patient reps; union reps; govt reps) getting together to ‘decide’ what ‘fair compensation’ is. Can you even begin to imagine such cooperative behavior in the U.S.?
And since the demise of communism, there is no left left in any major country, so the whole political sys of the developed countries, including western Europe is moving right (as politician after politician discovers the joys of monetary rewards of cooperating with corps), so I suspect western Europe will cease to be a model in your lifetime.
The U.S. will have single payer eventually, in about 35 years, but by then the U.S. will be a province of China or a balkanized collection of banana republics.
Oh, you also forget that if single-payer eliminates ONE inefficiency, there is an endless menu of inefficiencies the mafia of the intelligentsia can switch over too, most of which are much less visible. Like docs sending you to the MRI clinic that their colleague just opened & that needs revenue, while the patient does not need an MRI.
You are focusing on visible manifestations of the problem, while ignoring the systemic failure.
And you did not address my issue of the lack of goodwill on the part of the govt.
some of the doctors I ski with were all “it’s going to cut my income by 1/3″ and i was just “yeah, i know…” – single payer would have an impact their vail condo payments. hard to get people to buy into a 30% pay cut, but that’s what it’s going take, in addition to streamlining the paperwork & bureaucracy, which is currently mind boggling.
I think the vampire squid would kill the host before allowing that to happen.
PS – skiing Vail tomorrow – oh yeah!
Please give examples.
Last I looked (a decade ago), Canada’s system costs about half per capita vs. U.S. medical system. It’s the next most expensive one p/c of developed countries.
Rich Canadians cross the border for medical services in the U.S. But as for wait-times, a comparison by income categories would be useful, if you could provide the links. Wait times can be quite long in the U.S., depending on whether you’re paying up for a Park Ave. doc (weeks) vs. other parts of the country, which can be quite a bit longer.
It’s been clear to me for a couple of decades that U.S. medical costs are part of the slowmo suicide of the U.S. economy. Now we have all the malfunctioning U.S. inds (FIRE & energy to name 2 others) in bed with pols, which will speed up the process, but it will still be much slower than lefties think.
Sayeth Leonhardt:
emphasis added
Since we rank in low teens on most WHO measures except per capita expenditures (where we’re #1 and we’ve lapped #2 at least once), the list must include some who pay less than we do and get better results.
Let’s speak accurately, Mr. Leonhart.
the problem for the rich corporate insurance and Big Pharma people about single payer is that it doesn’t make them richer. They seem to be always looking for ways to
steal fromscrew with those of us who don’t have.Off to dinner. BBL.
The last time I looked, eCAHN, I think France was number 2, but we’re double and some their per capita costs.
More likely the Balkanized collection of Banana Republics.
some doctors can easily take a cut. Others not so easily. Other practitioners with lower income can’t take a 30% cut at all.
If you’re going to Vail, you are among the privileged. The rest of us don’t have that disposable income and are struggling to pay for the home/food/medicine, etc…
privilege has it’s privileges…
Ain’t that the truth!
Not only paperwork, but on the phone attempting to get paid by this horribly fragmented, duplicative, confusing non-system.
I hope you donate some of that disposable income to worthy organizations. You sound pompous.
Single Payer: There Really Is a Simple Way to
EliminateReduce the DeficitThis would be GREAT, but who says that they actually want to eliminate the deficit? I’m not being sarcastic, it’s an honest question. It seems the idea of the deficit is being hung over peoples’ heads as useful rhetoric to induce fear in order to implement exactly the programs (gutting social security, etc) you’re speaking of. Why would they want to get rid of that? Sorry for the cynicism, but you do realize who we’re dealing with here, a class of people who feel absolutely no accountability whatsoever towards the general population.
Maybe if there is a re-injection of jobs and some sort of industrial base in the American economy (job creation), corporations and CEOs would realize that it’s in their interest for their workers to have cheap and efficient health care, then it will happen. Until then, they will look for the least expensive labor possible, period, whether it’s inside or outside the US is irrelevant.
The root of the problem is that the American public, whether or not the polls indicate that it actually supports single payer, seems to feel that health care is a privilege, and not a right. Until we change that, well…
My brother’s a doctor (intensive care), and we have never had this discussion, but he did indicate to me once that basically it’s the insurance companies driving all of this, the doctors and even the hospitals pretty much just go along with it.
i’ll get right on that.
I’m a Canadian who’s lived the last 25 years in the United States. I recently attended the 60th birthday party of one of my oldest friends in Vancouver. Last year he had a cancer scare, which entailed his receiving radiation therapy and which is now (touch wood) “cured.” So I asked him how he liked this health care. I was not surprised to hear he was 100 percent satisfied with both the quality of care and the speed with which he received it. That gels with everything else I’ve ever heard from friends and relatives who actually live in Canada (and my own experience living there for 35 years). But we’re subjected to so much misinformation here, not just about “socialized medicine,” that I sometimes doubt my better judgment. Ergo, I’m glad I asked my friend’s opinion, since my wife and I are now seriously thinking about moving back to Canada for retirement (primarily because of medical).
You make a good point. For sure the deficit is being hung over everyone’s heads in order to rip off the serfs. Of that you can be sure. IF these elites were truly serious about “reducing the deficit,” they would get out of these costly wars pronto and start reducing the MIC. Quite simply: ain’t happening.
Not sure whether Single Payer is the answer to all deficit prayers. I’m mostly in favor of it, but, like eCHAN, do see some outstanding issues. That said, getting rid of the “health care” insurance industry middle-man rip off system would go some ways to reducing a lot of costs and possibly reducing some of the deficit.
But I do agree that a lot of this is just FEAR-mongering in order to force the serfs to bend over even further to take it where the sun don’t shine, and unfortunately, far too many serfs are quite blissfully willing to do just that (there was at least one of them posting on one of threads today).
Especially since the “administration” of programs like Medicaid takes nearly 60% of the moolah.
The problem with single payer reform that I’ve read about is that although it can lower health expenditure overall, you’re shifting the burden of paying for health insurance from employers/employees to the government. That means new taxes to finance all of this.
I wish it wasn’t Vermont leading the way on single payer. For such a small state to go it alone – it might really backfire if they impose their own 11% payroll tax to pay for the single payer plan and drive some employers over to New Hampshire instead.
Can single payer work on such a small scale when the barriers for companies to move across state lines are relatively low?
How are insurance premiums not a “tax”?
How is being denied health care by massive and inefficient corporations not an even bigger “tax”?
From the Vermont proposal :
- Why would this drive employers out of Vermont? I guess I’m missing something.
As for health care in general :
I swear, Americans need to get their heads out of their asses or they’re going to continue being led like lambs to the slaughter.
Hmmm. Let me see. Single Payer provides better outcomes for less money. If you are a TRUE Capitalist, then you demand Single Payer.
http://www.guardian.co.uk/news/datablog/2010/mar/22/us-healthcare-bill-rest-of-world-obama
Well, a tax is a mandatory government collection of revenue, and health insurance premiums are a price tag on an optional product. The two things are completely separate: you don’t have to pay for health insurance, or for a particular type of insurance. But you have to pay a tax, obviously.
Also, the 11% payroll tax may be deductible for federal income tax purposes, but it’s still a new tax. The fact that it’s not being doubly taxed as regular income doesn’t change the fact it’s a new tax. You’re raising the cost of payroll by 11%. Of course this is in addition to other payroll taxes for Social Security, UI, and Medicare.
For employers that aren’t spending 11% or more of their payroll on health care, the temptation may well be to either relocate from Vermont or lay people off to save on that payroll tax. Unfortunately, Vermont is such a small state, there are probably a lot of employers that wouldn’t have to relocate very far to open offices in New Hampshire, instead.
Well, thank you for responding to my somewhat rhetorical questions.
One of the points I was trying to make is that the notion of “tax” needs to be reexamined :
Some who have been denied health care would argue how “optional” it was, but there is a deeper problem here, namely : to think that ONLY a government can tax people, as a tax is mandatory. Now, in order to receive health care, depending on the state you live in, it is mandatory to pay your insurance premiums, worse, they reserve the right to deny you care based on pre-existing conditions, or really anything else they desire to invent. In this sense, it is very much a tax, and no different from any other government tax, in the sense that you do not necessarily reap the benefits of your contributions, but somebody might – or there is fraud, abuse, etc, as in government. So, the underlying logic here for those who do not support single payer is that access to health care is not something which can be considered “mandatory”. In most civilized societies, one would disagree.
The sole difference is that among different insurance providers there is theoretically competition, which in the simplistic “economics 101″ mindset is supposed to drive prices down. Does it? I think the reality is far more complex. I myself harbor some libertarian principles, and am not so gullible as to think what the various actors in the USG are working to my best interests, however, the for-profit companies aren’t either, so the argument is essentially that having more options (insurance providers) available is better than having a government monopoly on access to care – but this is a false dilemma. It is essentially a libertarian position that having too much power or authority vested in one location, without checks and balances, will eventually breed tyranny or abuse – however, this is exactly what we are seeing on the part of for-profit providers, and should therefore come to the conclusion that it isn’t working.
- I would be surprised if a large majority of employers were spending anything LESS on average globally than 11% presently, but I haven’t researched the figures. There has been ample write-up here on FDL about the Obama health care bill, so I’ll revisit it.
Lots more to say on this, but I won’t waste your time. Suffice it to say that the flag of faux-libertarianism is being waved in order to impose a system which is largely tyrannical and dysfunctional, and it is the lower income slice of the population paying the price (as usual).
The system has grown fat by having multiple layers of bureaucracy. The government can’t put pressure on providers because they are insulated by insurers and by segmentation of the market. So the first step is to get rid of the insurers. We can’t even do that so we are a long way from where we need to be.
The second step is to take on the providers, and that’s going to be really stomach-churning. But once the government firmly controls the purse-strings it can be done.
To the Canadian above your experience does reflect the overall reality because data shows Canada’s direct and indirect health costs are much lower than the U.S. while outcomes are similar. Health spending is increasing faster than inflation in both countries. No country has achieved this third step yet but it’s clear the solution is sensible cost controls.
I think socialized medicine is probably the way to go – not that it will ever happen. It’s much easier to control costs that way. Everyone’s on salary, noone has a vested interest in ordering more tests, more drugs or more procedures. The gov’t can shop around (internationally, if necessary) for equipment and drugs.
We also need to make med school cheaper and consider looking overseas for verifiable well trained doctors and nurses.
Unfortunately the TeaParty in charge of the House has delivered a hard punch to the face of the American people and will be following that up with a baseball bat to the knees in the final push off the cliff into 3rd world status.
And they seem to be on the rise. Lots of state houses are under their control. Look at Tuberstan (Idaho). They are ready to pass ‘nullification’ laws. The same moves made by the Confederacy. Ditto Texas, with prison terms for anyone trying to implement Obamacare.
And the final horror; Obama’s SOTUS. It’s gonna make for lots of vomiting in America.
America has decided to destroy itself, and the momentum seems unstoppable.
Any framing of the health care debate around “deficit reduction” is only self defeating for progressives. I didn’t trust it when Obama was using it for the simple reason that when they talk about deficit reduction all they are talking about is reducing the level of government commitment to a public concern. It says nothing about the costs or quality of services one will receive in the coerced private “market.”
Please talk about the overall societal benefits of single payer which would in fact be considerable. Even if it resulted in a higher deficit temporarily or permanently, so what? It would markedly improve our national economic health and couldn’t help but improve our national health.
I get your point. It’s trying to use their illogic to back your ideas. Not good.
Similar to using the Spotted Owl or Snail Darted to save an entire ecosystem because they are endangered. What if they go extinct? No reason left to save the ecosystem. Bring in the dozers, boys!
And I would caution you to think really hard about relying on the USG to pay for something as vital as medical care after experiencing the current & prior prez. You’re assuming good will of the govt, which is clearly NOT the case.
And yet what’s the alternative? The options today are relying on private insurance companies or doing without. I think Hsiao’s Option 3 design is smart in that it would set up an independent oversight board and creates a dedicated revenue source. If this system was set up at the federal level for a Medicare for system, it would mean that Congress would no longer set benefit package (mustn’t step on toes of supplementary insurers) nor would it have to vote annually on Medicare Part B appropriations.
Part A (hospital) coverage has dedicated funding from Medicare payroll tax so it has an automatic appropriation, however Part B (provider) coverage is funded out of general revenue. As a consequence Congress can torment doctors (the AMA endorsement of Obamacare still bugs Republicans) by monkeying with Part B fees in a way they can’t do with Part A fees.
Read this for comparisons between US health care & sane countries.
http://www.commonwealthfund.org/Content/Publications/Fund-Reports/2010/Jun/Mirror-Mirror-Update.aspx
Last time I checked, the use was spending over $2 trillion per year on health care costs while averaging more than twice the OECD country average. That indicates a waste of roughly $1 trillion per year. Deficit reduction, anyone?
That should be US, not use.