Author Topic: Munger Says We Will Have Single Payer  (Read 7774 times)

Cigarbutt

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Re: Munger Says We Will Have Single Payer
« Reply #20 on: June 03, 2018, 05:52:56 AM »
Also for those that state single payer =nationalized medicine - well thatís not necessarily true. The German system is single payer, but resembles a mutual Insurance System rather than a nationalized system.

Excellent point. International comparisons can be a useful exercise but improvements must account for intrinsic "cultural" differences.
So is a mutual system compatible with a free market and individual mindset?

Benjamin Franklin who, in a lot of ways embodies the American Spirit (used to anyways) and who, apparently is one of Mr. Munger's heroes, among his numerous accomplishments, set up a fire insurance "society" in Philadelphia (in a physical location probably close to where the Rocky Statue lies these days) in 1750. Along the way, the "father of American Insurance" improved the idea and incorporated the concept of safety reserves and management of float.

The system was built from the ground up, encouraged market-based best practices, included components of innovation, prevention, risk management and personal responsibility and eventually became mutually owned.

Healthcare is extremely complicated in part because of the way it has evolved (structure and incentives) but I would say that present-day policymakers could use inspiration from the principles used by Benjamin Franklin who introduced needed "reform" in a nascent state by building a mutual system from scratch. Don't necessarily need artificial intelligence.

https://www.bankinsurance.com/editorial/articles/pdfs/bim/1998-ben-franklin.pdf
« Last Edit: June 03, 2018, 06:11:16 AM by Cigarbutt »


Spekulatius

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Re: Munger Says We Will Have Single Payer
« Reply #21 on: June 03, 2018, 01:13:35 PM »
A mutual system should have some self interest in serving its members as well as self preservation in the long run. It isnít a surprise that most mutual institutions are in insurance.

There is a simple economic realty that if something canít be paid because it isnít  affordable then it wonít. The folks running Calpers know this, but canít tell their members, so they kick the can down the road as long as they can.
To be a realist, one has to believe in miracles.

TwoCitiesCapital

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Re: Munger Says We Will Have Single Payer
« Reply #22 on: June 03, 2018, 07:08:09 PM »
Quote
A free market solution cannot exist without being able to deny those who don't pay service and allowing those who day the ability to differentiate between products. But we, as a country, don't have the political will to tell people they cannot receive treatment NOR will the government enact a forced pricing scheme on private institutions.

I don't like the term free market in this context so I will use a different term. Normal market. You can have a pretty good "normal market" solution to this problem. And that is what Singapore has done. Its extremely effective in providing high degrees of health care availability, good outcomes, no lineups and very low costs. Singapore is a multi-payer system and its the single most effective healthcare system in the world.

By "normal market" I mean a system where the vast majority of consumers are paying for thing directly out of their own pockets with money they earned and for their own direct consumption (not to resell to someone else).  I would say that housing, stock market, education, car repair, healthcare are mostly abnormal markets since in these cases the consumers are mostly not paying using their own money directly for their direct consumption. Instead they are using loans, insurance.

Normal markets work well. In most normal markets prices typically decline, quality improves, pricing is rational and there are no large scale societal problems. Clothing, food, consumer goods are examples.

Healthcare is not a normal market since everyone uses insurance. But Singapore found a way to turn it into one. Their system is not a "free" market. But it provides all the true advantages that free markets have. Brad Delong has a solution that essentially accomplishes the same thing and is described here:
http://delong.typepad.com/sdj/2007/06/dealing_with_th.html

Basically the solution is as follows:
1) Compulsory HSA's and everything paid out of the HSAs up to a certain limit which is dependent on income
2) 100% insured coverage if you exceed the HSA limit


This is generally the solution I would advocate for, but just don't see the political will for it. Someone, somewhere, is going to stand up and say that some people still won't be able to afford it and that even the $30-40/month for a high deductible plan would be too much to pay, let along them being on the hook for a $2-3k deductible.

We don't have the political will to refuse those people service,s o still don't think this would work - though it would certainly be better than what we have now.


rb

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Re: Munger Says We Will Have Single Payer
« Reply #23 on: June 03, 2018, 07:43:21 PM »
I think that was a fascinating comment by Munger and he will probably be right over time.   The US may be the only large 1st world country without universal healthcare.   

If Single payer becomes a reality, the US govt will put the screws to a huge swath of the US healthcare system.  Profits will be massively squeezed at tons of companies.

Then what .. .  Probably cheaper healthcare for everyone per capita but utilization up. 

I am very against socialized medicine of the European pricing type.  For sure in the US there is a ton of waste
but once you get low prices for all types of healthcare, innovation will plummet.  With little incentive
companies, investors and innovators, etc. wont make super important R&D investments and then a big part of the
beneficial innovation of the US and world healthcare R&D system will be gutted.   All types of innovations wont happen and end up killing and reducing healthspans vs what they would of been.  A sad 2nd order effect.   

With due respect. I think you're wrong. What you're essentially saying is that if healthcare companies aren't allowed to price gouge they'll pack their toys and go home? No they won't. Healthcare will still be a profitable business - not as profitable as before - but still quite profitable. Capitalism still works. And as long as there's money to be made people will line up to make it. The valuations of certain companies will be lower than before but R&D, inventions, and innovations will go on.

longinvestor

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Re: Munger Says We Will Have Single Payer
« Reply #24 on: June 03, 2018, 09:09:21 PM »
Innovation to reduce costs is not even in the lexicon of US Healthcare. Healthcare Innovation has a great likeness to the defense industries. No lower bounds. 17% HC inflation versus 11% in other advanced economies. American industry is at a huge disadvantage. Munger is exactly right, HC practices are deeply immoral towards the last stages of life. Life expectancy increase over the past century can substantially be explained by elimination of infant and child mortality. Innovation is a convenient tag line used to ward off any talk on cost control.

rb

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Re: Munger Says We Will Have Single Payer
« Reply #25 on: June 03, 2018, 09:30:12 PM »
This is generally the solution I would advocate for, but just don't see the political will for it. Someone, somewhere, is going to stand up and say that some people still won't be able to afford it and that even the $30-40/month for a high deductible plan would be too much to pay, let along them being on the hook for a $2-3k deductible.

We don't have the political will to refuse those people service,s o still don't think this would work - though it would certainly be better than what we have now.
What you say is true. The US is a mess. You have all sorts of policies programs and ideas etc, etc. If single payer will go ahead I don't see it being a federal thing. Firstly, as I've said the whole system is already a huge, giant mess. Secondly, the US at this point is pretty much divided on everything. For something like this big to work the people working to make it happen have to want for it to work. If anything gets done federally what will happen is that someone will sabotage the whole thing from the beginning.

One way that I can see this happening is that say a state like California that is more united around the issue decides to go single payer. I'm not choosing California just because of politics. It's economy is about the size of Britain. They have a pretty good health care system in Britain. Single payer, equal access, no deductibles, it's got good outcomes, high approval ratings, and it's pretty cheap. Whatever dissatisfaction with the NHS exists comes from the fact that the NHS rations out care to keep costs low which creates wait times. But you want to spend some more money, the system get better in a hurry. 

Now if you were to implement an NHS like system in Cali and increase its budget by 30% to make it fantastic, you still come out 30% below what you're currently spending. Non medicare/medicaid costs would come in 50% below what they are right now. Those are BIG numbers. If a big state like California successfully implements something like this other states will follow suit. Then the current system falls like dominoes.

Schwab711

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Re: Munger Says We Will Have Single Payer
« Reply #26 on: June 03, 2018, 09:42:57 PM »
Quote
A free market solution cannot exist without being able to deny those who don't pay service and allowing those who day the ability to differentiate between products. But we, as a country, don't have the political will to tell people they cannot receive treatment NOR will the government enact a forced pricing scheme on private institutions.

I don't like the term free market in this context so I will use a different term. Normal market. You can have a pretty good "normal market" solution to this problem. And that is what Singapore has done. Its extremely effective in providing high degrees of health care availability, good outcomes, no lineups and very low costs. Singapore is a multi-payer system and its the single most effective healthcare system in the world.

By "normal market" I mean a system where the vast majority of consumers are paying for thing directly out of their own pockets with money they earned and for their own direct consumption (not to resell to someone else).  I would say that housing, stock market, education, car repair, healthcare are mostly abnormal markets since in these cases the consumers are mostly not paying using their own money directly for their direct consumption. Instead they are using loans, insurance.

Normal markets work well. In most normal markets prices typically decline, quality improves, pricing is rational and there are no large scale societal problems. Clothing, food, consumer goods are examples.

Healthcare is not a normal market since everyone uses insurance. But Singapore found a way to turn it into one. Their system is not a "free" market. But it provides all the true advantages that free markets have. Brad Delong has a solution that essentially accomplishes the same thing and is described here:
http://delong.typepad.com/sdj/2007/06/dealing_with_th.html

Basically the solution is as follows:
1) Compulsory HSA's and everything paid out of the HSAs up to a certain limit which is dependent on income
2) 100% insured coverage if you exceed the HSA limit


This is generally the solution I would advocate for, but just don't see the political will for it. Someone, somewhere, is going to stand up and say that some people still won't be able to afford it and that even the $30-40/month for a high deductible plan would be too much to pay, let along them being on the hook for a $2-3k deductible.

We don't have the political will to refuse those people service,s o still don't think this would work - though it would certainly be better than what we have now.

I think it's a bit of a flywheel right now. Costs are out of control so too many folks take advantage of EMTALA for services and then go bankrupt (or hospitals/other HC services don't bother trying to collect). That effectively spreads costs around to everyone. The point of ACA was to avoid having emergency room bills be shared by everyone and instead just give health insurance so that the charges would be lower. We also guaranteed coverage of pre-existing conditions at the same time so I think the country ended up conflating causes. Most research papers I've read point to pre-existing condition, the 80% expense ratio mandate for health insurers, and the lack of Medicaid expansion by many states as the primary contributing factors of rising health insurance and healthcare costs since 2008.

The biggest problems with EMTALA overuse are in non-Medicaid expansion states (as we'd expect). With Medicaid expansion, there's generally a pretty small percentage of people expected to pay the full premium on a HDHP, yet still making meaningfully below median income. No solution will help everyone. If low-income folks paid $50/month on a $5k deductible, I think we'd see a major improvement. Spontaneous $5,000 bills of any type will cause problems for many people but we'd certainly reduce the usage of EMTALA (and thus lower the cost of HC treatment overall). I don't know if most people here have been in this situation but most low-income folks would love to pay for affordable healthcare. Not being sure if you can get/afford healthcare treatment is extremely stressful.

I think if we can lower EMTALA usage (by increasing Medicaid programs in states), HC cost pressure would ease some and more people would be eligible for HSA accounts. More HSA accounts means more people would be putting money towards their medical bills, which reduces the nominal amount of healthcare costs shared among everyone. If HC costs decrease then cash compensation as a percentage of total compensation increases and the relative HC costs decrease by more than the nominal costs. As I said, the US is trapped in a negative flywheel. It can switch to a positive flywheel with small policy changes and a small shift in attitude/political will.

If we are going to deny services then we need to transition to mandatory insurance and HSA account funding (like Singapore). Looking at the US and other countries, full personal accountability doesn't seem to be feasible without mandatory participation. Singapore mandates 8% of monthly income go towards their version of HSA accounts. I think the US max healthcare spending on insurance is 10% or 15% of gross income. If we made it 15% with 8% HSA and 7% insurance, over time the costs would decline and the maximum would be less of an issue for most. I definitely agree with you that mandatory healthcare participation has been a major sticking point, politically, in the US. Without mandatory participation, it's pointless to try to emulate Singapore. At some point, employer-provided insurance will no longer make sense either.

If everyone must participate and someone still decides to not fund or refuses to pay for services then it's easier (politically/socially/legally) to deny them future treatment. The issue now is most folks realistically cannot afford medical treatment and it's bad for everyone (economically and socially) to deny such a large percentage of the population adequate healthcare.

Finally, on denying services, the issue is the most sensible people to deny services is not necessarily folks that cannot afford basic treatment but forcing folks with seriously debilitating illnesses/conditions to pay out-of-pocket (since they *generally* have a lower expected value to society purely through the perspective of contributing to broad funds). If the US was excessively utilitarian about healthcare, you could argue that we'd only provide healthcare for working individuals and abandon folks after retirement. That's probably a stupid idea for all sorts of reasons. I think attempting to deny healthcare treatment should be done with extreme care. Many folks provide excess value to society when we give them free healthcare. There are many ways to create value.

Either way, I think the issue around misusing EMTALA (and thus, the proposed issued of should we deny services and how) is a symptom of upstream issues and not a direct cause of high healthcare costs. Healthcare costs were problematic well before EMTALA of state versions of EMTALA that popped up a decade before the federal law. EMTALA was a band-aid.

As long as we can remove the political polarization from healthcare then the US should at least begin to move in the right direction. The political rhetoric has been way too high for a long time now.

Schwab711

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Re: Munger Says We Will Have Single Payer
« Reply #27 on: June 03, 2018, 09:47:05 PM »
This is generally the solution I would advocate for, but just don't see the political will for it. Someone, somewhere, is going to stand up and say that some people still won't be able to afford it and that even the $30-40/month for a high deductible plan would be too much to pay, let along them being on the hook for a $2-3k deductible.

We don't have the political will to refuse those people service,s o still don't think this would work - though it would certainly be better than what we have now.
What you say is true. The US is a mess. You have all sorts of policies programs and ideas etc, etc. If single payer will go ahead I don't see it being a federal thing. Firstly, as I've said the whole system is already a huge, giant mess. Secondly, the US at this point is pretty much divided on everything. For something like this big to work the people working to make it happen have to want for it to work. If anything gets done federally what will happen is that someone will sabotage the whole thing from the beginning.

One way that I can see this happening is that say a state like California that is more united around the issue decides to go single payer. I'm not choosing California just because of politics. It's economy is about the size of Britain. They have a pretty good health care system in Britain. Single payer, equal access, no deductibles, it's got good outcomes, high approval ratings, and it's pretty cheap. Whatever dissatisfaction with the NHS exists comes from the fact that the NHS rations out care to keep costs low which creates wait times. But you want to spend some more money, the system get better in a hurry. 

Now if you were to implement an NHS like system in Cali and increase its budget by 30% to make it fantastic, you still come out 30% below what you're currently spending. Non medicare/medicaid costs would come in 50% below what they are right now. Those are BIG numbers. If a big state like California successfully implements something like this other states will follow suit. Then the current system falls like dominoes.

I completely agree on the domino theory. Massachusetts has been pretty close to universal coverage and will likely lead the US in single payer. They are already showing signs of decelerating healthcare costs and it's possible they see costs decline in the near future.

DeepSouth

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Re: Munger Says We Will Have Single Payer
« Reply #28 on: June 04, 2018, 07:42:24 AM »

health care in the US........

any thoughts on this?

I am worried because I am invested in the MCOs
\

If the government were to institute a universal coverage system it would most likely be outsourced to MCOs. MCOs run most Medicaid plans today and are taking share quickly and close to half share in Medicare. Government run fee for service plans are not the way forward.

flesh

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Re: Munger Says We Will Have Single Payer
« Reply #29 on: June 04, 2018, 10:00:08 AM »
How about a constitutional amendment fixing the cost of nationalized healthcare to a % of gdp plus regular inflation not medical inflation adjustments.

Even if the initial number is nauseatingly high, this would reduce my fears by a substantial majority.

Aside from that, if you zoom out and look at the next century, I believe significantly more lives will be lost to reduced innovation than gained by single payer. The thing is, no one will be talking about that lives that weren't saved due to reduced innovation. Greater than 50% of lives saved from innovation in the last century are not a result of infant and children's death's. Plus, that's backward looking.... forward looking, a better innovation system humming on all cylinders with the tech that will come in the next century with 10 billion people innovating vs less people in the past could produce untold wonders.

What might have happened can't be calculated and isn't news on 99% of folks radar's.