Munger Says We Will Have Single Payer

[randomep]

 

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

 

any thoughts on this?

 

I am worried because I am invested in the MCOs

[TwoCitiesCapital]

The Libertarian in me hates the idea.

 

The realist in me thinks its the easiest way forward and most likely to happen. I would support it to get away from the monstrosity we have in place now, though my preference would be for everyone to have high-deductible plans and thus force some semblance of pricing discipline into the system and maybe motivate some real solutions.

 

Why would a private market option fail to work: We can't have a free market solution if we cannot discriminate against those who don't pay or provide consumers with the information necessary to differentiate between choices.

 

You can get care for free at any emergency room. They HAVE to treat you. As the burden from free service gets borne by those who do pay, prices will inflate for those services forcing more people to seek the free options and more costs to be borne by fewer and fewer people. You'd expect public outcry, right? Wrong.

 

Paying consumers don't see the cost because they don't pay - their insurance company does. And most consumers don't pay the bulk of their insurance premiums - their employer does. And the litte bit of the cost that we do carry? Comes out automatically from your paycheck and 95% of the population couldn't tell you how much it was or what % of the total cost it represents. Ultimately, the users of the services are 2 steps removed from the cost of the service allowing for increased usage even at inflated prices.

 

Further, even if there was pricing discipline with consumers directly bearing the cost and having the motivation to enact pricing discipline into the process, the information isn't there. You can't differentiate based on price for most services received at hospitals because hospitals themselves cannot quote you how much it costs for a service.

 

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.

 

So, a public solution is most likely to work and receive the most support since it can coordinate all of that on the back-end.

 

Just my two cents.

[rb]

I also agree that eventually you will get single payer healthcare in the US. But I think it will be quite far in the future. So your investments are likely fine right now.

[LC]

Good poInt TwoCities.

 

It may be useful to look at another industry which we cannot deny service to: legal council. Unfortunately it not an ideal comparison but it's  the best I can think of and it gets us 60% of the way there.

[DTEJD1997]

Good poInt TwoCities.

 

It may be useful to look at another industry which we cannot deny service to: legal council. Unfortunately it not an ideal comparison but it's  the best I can think of and it gets us 60% of the way there.

 

If medical care in the USA is going to be comparable to court appointed attorneys...we are in for rough times indeed.

 

 

[LC]

The point is, if we accept the premise that we are going to have universal coverage, there must be compromises.

[rb]

Single payer universal coverage is NOTHING alike court appointed legal counsel.

[Cigarbutt]

https://www.nejm.org/doi/full/10.1056/NEJMp1602009

"In short, single payer has no realistic path to enactment in the foreseeable future."

Then again, when reflecting on what happened in 2008, I never considered, in the potential range of outcomes, that banks, AIG and auto manufacturers would be bailed out by a federal rescue program.

 

Personal anecdote: A while back, was sometimes marginally involved in contracts negotiations for medical devices. After looking at some data, I found out that, for the same patient and the same device, the price paid by the US "client" was at least twice as much as the price being regionally negotiated in Canada. To the question: "How come you charge at least twice as much in the US for the same product?", the best answer obtained: "Because we can".

[rukawa]

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

[ASTA]

Was in the states on holiday and was stupid to go to ER. For a swab of my 4-month son cost me $7,000 makes me really consider if I ever want to move there. A mix between EU and USA would be good.

 

I do Have 2 million credit card Insurance so I should be good still have to fill the paperwork. Will test if it works :D but childbirth was 700 Euros in EU :D

[bizaro86]

If you ever go to the US, you absolutely need travel medical insurance.  A cousin of mine got hit by a car in Vegas breaking his leg, and the bill was over $500k.

[Guest Schwab711]

ACA + Medicaid expansion incentives + Medicare was our Singapore solution. Healthcare, like every other major policy, is too politically sensitive right now.

 

HSA + HDHP is the future imo. I also think the US will (mostly because they have to) move towards single payer in a multi-decade stepped approach. ACA was essentially a large step in this direction that was started in the 1980s. Healthcare will continue to cost a fortune until Medicaid expansion is ubiquitous and the market stops changing every couple of years. Insurance for young, healthy folks will need to be compulsory. Then eventually we can tweak ACA and add additional programs to shore up incentives. That's the route I see.

[LongHaul]

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.   

 

 

 

 

 

 

 

 

 

 

[ScottHall]

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. 

 

3rd order effect: China, understanding the strategic importance of long term investment, picks up the slack, allowing it the distinction of being able to helicopter into developing countries with new medical discoveries it can give away to extend and cement its soft power in countries that are going to be relevant in geopolitics 20 - 30 years from now.

 

We're in checkmate here folks, we just haven't figured that out yet. We got fat and lazy while the Chinese have been working to throw us off the high horse.

 

It reminds me of the intro to Rocky 3, where we see that Rocky has lost himself to the glitz and glamour of his fame. TV commercials, magazine photoshoots, the "perfect" family Christmas and his face on merchandise everywhere.

 

Meanwhile we are introduced to Clubber Lang, a young fighter making his way up the rankings. We see him brutally knock out his opponents while Rocky is beating up a bunch of palookas we later discover were set up as tomato cans for Rocky to squash by his manager Mickey.

 

 

And while we see Clubber Lang dedicate all of his time to improving himself to better his chances at his chosen profession, we see Rocky making appearances on The Muppet Show and shilling for American Express. Rocky had grown soft and the Rocky brand was more valuable with him beating up tomato cans than risking his title against legitimate competition.

 

But sooner or later, if you don't take the fight to your competition, your competition will take the fight to you. Rocky couldn't duck Clubber Lang forever, and when he eventually did fight Clubber Lang he discovered that his match ups with the palookas hadn't prepared him to face real competition again.

 

Ever since the Cold War ended, we've been like Rocky. We've been resting on our laurels and beating up palooka countries like Iraq and Afghanistan, while China has been investing in its domestic infrastructure, building up its soft power around the world and rising up the rankings.

 

The day is coming soon that the US will get knocked out cold and be unable to answer the 10 count, and it's our own fault for letting our country fall apart. All that wasted money for wars could have been used to reinvest in America and make us more competitive, but I guess reinvesting in your economic moat is a tough sell when many people believe American Exceptionalism alone has imbued us with our gifts, and that philosophy has made us arrogant and lazy.

 

We're in checkmate; when you're in checkmate, how can you win? You've already lost, and you can't win a game that you've lost. At least, not conventionally. But there is another alternative, famous in Go clubs around Asia... The Nuclear Tesuji.

 

You flip over the board and the pieces go flying everywhere. It's total chaos, and the usual rules and expectations no longer apply because we're no longer playing the same game. China has been besting us by building up their strategically important infrastructure.

 

It's time we do the same, by issuing trillions of dollars worth of bonds to build up our own domestic infrastructure to catch up with China. And we need to do this while we still have Donald Trump in office, because he is uniquely qualified to deal with the next step of the operation.

 

Being the first of the major powers of the world to default on its obligations to the others. Donald Trump has had six business bankruptcies so far, that is not an easy skill to hire for. And dare I say it's one we've NEVER had in the oval office before.

 

We are going to build up our own domestic infrastructure with the money of foreign governments, and leave them holding the bag. It's Economic Judo, and it's something Trump is very familiar of pulling on his creditors. He can do the same thing for ours, but first we need to build as big of a foreign debt as possible.

 

The more money we borrow, the more we make up for our cumulative trade deficit to these countries since free trade became the flavor of the day. We'll have had the benefit of decades of lower prices and we'll get the last laugh by pulling back all the money that has been sucked out of the pockets of American families by free trade with our Nuclear Tesuji.

[Spekulatius]

I think Scott has been smoking something again. The idea to use other people’s money to build something of value and then default on the mountain of debt that it took to do so, has some merit, although I suspect the devil is in the details. And, I agree that Donald T would be the right person to do so, because he is intimately familiar with defaulting on debts and generally doesn’t overthink complex matters. ;D

 

Back on that matter, I had an inlaw collapsing in the heat on my visit in Germany. he as taken into and ambulance and a few hours in thr emergency room. I prepaid 100€ on his behalf and the whole bill was 400€. It would ave been up to 1000€ if he had to spent the night in the emergency room. This was for an US citizen without health/ travel insurance in Germany. I am guessing the cost would have been 20x if the had occurred to a foreigner in the US.

 

Also for those that state single payer =nationalized medicine - well that’s not necessarily true. The German system is single payer, but resembles a mutual Insurance System rather than a nationalized system.

[Jurgis]

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. 

 

3rd order effect: China, understanding the strategic importance of long term investment, picks up the slack, allowing it the distinction of being able to helicopter into developing countries with new medical discoveries it can give away to extend and cement its soft power in countries that are going to be relevant in geopolitics 20 - 30 years from now.

 

We're in checkmate here folks, we just haven't figured that out yet. We got fat and lazy while the Chinese have been working to throw us off the high horse.

 

It reminds me of the intro to Rocky 3, where we see that Rocky has lost himself to the glitz and glamour of his fame. TV commercials, magazine photoshoots, the "perfect" family Christmas and his face on merchandise everywhile

 

Meanwhile we are introduced to Clubber Lang, a young fighter making his way up the rankings. We see him brutally knock out his opponents while Rocky is beating up a bunch of palookas we later discover were set up as tomato cans for Rocky to squash by his manager Mickey.

 

 

And while we see Clubber Lang dedicate all of his time to improving himself to better his chances at his chosen profession, we see Rocky making appearances on The Muppet Show and shilling for American Express. Rocky had grown soft and the Rocky brand was more valuable with him beating up tomato cans than risking his title against legitimate competition.

 

But sooner or later, if you don't take the fight to your competition, your competition will take the fight to you. Rocky couldn't duck Clubber Lang forever, and when he eventually did fight Clubber Lang he discovered that his match ups with the palookas hadn't prepared him to face real competition again.

 

Ever since the Cold War ended, we've been like Rocky. We've been resting on our laurels and beating up palooka countries like Iraq and Afghanistan, while China has been investing in its domestic infrastructure, building up its soft power around the world and rising up the rankings.

 

The day is coming soon that the US will get knocked out cold and be unable to answer the 10 count, and it's our own fault for letting our country fall apart. All that wasted money for wars could have been used to reinvest in America and make us more competitive, but I guess reinvesting in your economic moat is a tough sell when many people believe American Exceptionalism alone has imbued us with our gifts, and that philosophy has made us arrogant and lazy.

 

We're in checkmate; when you're in checkmate, how can you win? You've already lost, and you can't win a game that you've lost. At least, not conventionally. But there is another alternative, famous in Go clubs around Asia... The Nuclear Tesuji.

 

You flip over the board and the pieces go flying everywhere. It's total chaos, and the usual rules and expectations no longer apply because we're no longer playing the same game. China has been besting by building up their strategically important infrastructure.

 

It's time we do the same, by issuing trillions of dollars worth of bonds to build up our own domestic infrastructure to catch up with China. And we need to do this while we still have Donald Trump in office, because he is uniquely qualified to deal with the next step of the operation.

 

Being the first of the major powers of the world to default on its obligations to the others. Donald Trump has had six business bankruptcies so far, that is not an easy skill to hire for. And dare I say it's one we've NEVER had in the oval office before.

 

We are going to build up our own domestic infrastructure with the money of foreign governments, and leave them holding the bag. It's Economic Judo, and it's something Trump is very familiar of pulling on his creditors. He can do the same thing for ours, but first we need to build as big of a foreign debt as possible.

 

The more money we borrow, the more we make up for our cumulative trade deficit to these countries since free trade became the flavor of the day. We'll have had the benefit of decades of lower prices and we'll get the last laugh by pulling back all the money that has been sucked out of the pockets of American families by free trade with our Nuclear Tesuji.

 

ScottHall for Secretary of State!

 

 

...

 

at the very least:

 

ScottHall for Anthony Scaramucci!  8)

[ScottHall]

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. 

 

3rd order effect: China, understanding the strategic importance of long term investment, picks up the slack, allowing it the distinction of being able to helicopter into developing countries with new medical discoveries it can give away to extend and cement its soft power in countries that are going to be relevant in geopolitics 20 - 30 years from now.

 

We're in checkmate here folks, we just haven't figured that out yet. We got fat and lazy while the Chinese have been working to throw us off the high horse.

 

It reminds me of the intro to Rocky 3, where we see that Rocky has lost himself to the glitz and glamour of his fame. TV commercials, magazine photoshoots, the "perfect" family Christmas and his face on merchandise everywhile

 

Meanwhile we are introduced to Clubber Lang, a young fighter making his way up the rankings. We see him brutally knock out his opponents while Rocky is beating up a bunch of palookas we later discover were set up as tomato cans for Rocky to squash by his manager Mickey.

 

 

And while we see Clubber Lang dedicate all of his time to improving himself to better his chances at his chosen profession, we see Rocky making appearances on The Muppet Show and shilling for American Express. Rocky had grown soft and the Rocky brand was more valuable with him beating up tomato cans than risking his title against legitimate competition.

 

But sooner or later, if you don't take the fight to your competition, your competition will take the fight to you. Rocky couldn't duck Clubber Lang forever, and when he eventually did fight Clubber Lang he discovered that his match ups with the palookas hadn't prepared him to face real competition again.

 

Ever since the Cold War ended, we've been like Rocky. We've been resting on our laurels and beating up palooka countries like Iraq and Afghanistan, while China has been investing in its domestic infrastructure, building up its soft power around the world and rising up the rankings.

 

The day is coming soon that the US will get knocked out cold and be unable to answer the 10 count, and it's our own fault for letting our country fall apart. All that wasted money for wars could have been used to reinvest in America and make us more competitive, but I guess reinvesting in your economic moat is a tough sell when many people believe American Exceptionalism alone has imbued us with our gifts, and that philosophy has made us arrogant and lazy.

 

We're in checkmate; when you're in checkmate, how can you win? You've already lost, and you can't win a game that you've lost. At least, not conventionally. But there is another alternative, famous in Go clubs around Asia... The Nuclear Tesuji.

 

You flip over the board and the pieces go flying everywhere. It's total chaos, and the usual rules and expectations no longer apply because we're no longer playing the same game. China has been besting by building up their strategically important infrastructure.

 

It's time we do the same, by issuing trillions of dollars worth of bonds to build up our own domestic infrastructure to catch up with China. And we need to do this while we still have Donald Trump in office, because he is uniquely qualified to deal with the next step of the operation.

 

Being the first of the major powers of the world to default on its obligations to the others. Donald Trump has had six business bankruptcies so far, that is not an easy skill to hire for. And dare I say it's one we've NEVER had in the oval office before.

 

We are going to build up our own domestic infrastructure with the money of foreign governments, and leave them holding the bag. It's Economic Judo, and it's something Trump is very familiar of pulling on his creditors. He can do the same thing for ours, but first we need to build as big of a foreign debt as possible.

 

The more money we borrow, the more we make up for our cumulative trade deficit to these countries since free trade became the flavor of the day. We'll have had the benefit of decades of lower prices and we'll get the last laugh by pulling back all the money that has been sucked out of the pockets of American families by free trade with our Nuclear Tesuji.

 

ScottHall for Secretary of State!

 

 

...

 

at the very least:

 

ScottHall for Anthony Scaramucci!  8)

 

Thanks Jurgis. Stay tuned, because I have a lot to say on the matter of financial responsibility and how we should really be treating our multi-trillion unfunded liabilities. According to Stanford, here in CA we could be facing $1 trillion ALONE through our pension system. But the state is saying $150 billion unfunded, but guess what, they are also saying 7% returns from their pension system going forward. They haven't come even close, on average, over the past decade. And if those mediocre returns keep up, well, the numbers get really big, really quick.

 

It is going to take some major financial ingenuity to solve these massive obligations we have made to ourselves. I voted John Chiang for Governor because he has been Treasurer or Controller since 2007, finding one rabbit after the other to pull out of the hat to keep us going.

 

That is the sort of guy we are going to need to navigate the pension crisis. Oroville says the city is going to run out of money in 4 years, and then bankruptcy. Most cities in the state are in the hole big time, many thousands of dollars per resident.

 

Too bad he is going to lose, nobody loves a technocrat anymore. Then we are going to be stuck with Gavin Newsom, who is a showboat, and most likely this guy John Cox who has campaigned for office 13 times and hasn't won a single one of them.

 

John Cox has views that just cannot win in modern CA, and he has been turning the election into a base race so that he can coalesce support among conservatives to make it out of California's jungle primary alive.

 

In CA, everyone running gets places in one giant pool of candidates. No separation by party. The top two vote getters in that pool then go on to the general election. It doesn't matter if it's a Republican and a Democrat, two Democrats, two Republicans, or even third parties/independents.

 

So naturally this has led to the Republicans running to try to out Trump each other to be the one the conservative wing rallies behind and make it out of the jungle alive. Unfortunately, running a base race in a state where Republicans have 25% and Democrats have 44% is a sure way to lose a general election.

 

So Goofy Gavin is going to be Governor, and this whole charade continues another four or so years... and then maybe the state turns into Newsom's Nightmare and he takes the blame for being the one holding the potato when the music stops.

 

Maybe then the local Republicans will have their shit enough together to capitalize on the fallout and win the Governor's mansion for the first time since Schwarzenegger. Or maybe Gavin will just get replaced by another Democrat in the jungle primary and the Republican party stays as irrelevant as ever because of their refusal to budge on social issues.

 

But one thing is for sure, we need someone with some financial sense running the state. They're bragging now about the $10 billion budget surplus but that surplus is going to be a drop in the bucket compared to what they need if the worst comes to pass. Or, god forbid, a recession comes and whacks the market and the pension's % funded status along with it.

[rb]

Spekulatius,

 

I think Scotty is somewhat sober tonight. Initial post:

 

Maybe then the local Republicans will have their shit enough together to capitalize on the fallout and win the Governor's mansion for the first time since 1992. Or maybe Gavin will just get replaced by another Democrat in the jungle primary and the Republican party stays as irrelevant as ever because of their refusal to budge on social issues.

 

Revised post without edit marker:

 

Maybe then the local Republicans will have their shit enough together to capitalize on the fallout and win the Governor's mansion for the first time since Schwarzenegger. Or maybe Gavin will just get replaced by another Democrat in the jungle primary and the Republican party stays as irrelevant as ever because of their refusal to budge on social issues.

 

Sober enough to realize that there was no gubernatorial election in California in 1992 and that California has had a Republican governor from 1983 to 1999 and then from 2003-2011. So maybe just 2 spliffs in?  :-\

[ScottHall]

Poor Oroville; they are now saying that bankruptcy could be as soon as two years away! I hope there isn't a market crash because it could get really, really ugly in a lot of places.

 

http://www.actionnewsnow.com/content/news/Oroville-Takes-New-Preventative-Measures-to-Avoid-Bankruptcy-in-Near-Future-480190303.html

[Cigarbutt]

Also for those that state single payer =nationalized medicine - well that’s 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

 

[Spekulatius]

A mutual system should have some self interest in serving its members as well as self preservation in the long run. It isn’t a surprise that most mutual institutions are in insurance.

 

There is a simple economic realty that if something can’t be paid because it isn’t  affordable then it won’t. The folks running Calpers know this, but can’t tell their members, so they kick the can down the road as long as they can.

[TwoCitiesCapital]

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]

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.

[Guest longinvestor]

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]

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.