Munger Says We Will Have Single Payer

[Cigarbutt]

https://www.propublica.org/article/in-montana-a-tough-negotiator-proved-employers-do-not-have-to-pay-so-much-for-health-care

 

"The discounts, however, are meaningless if the underlying charges aren’t capped. When Bartlett looked at a common knee replacement, with no complications and a one-night hospital stay, she saw that one hospital had charged the plan $25,000, then applied a 7 percent discount. So, the plan paid $23,250.

A different hospital gave a better discount, 10 percent, but on a sticker price of $115,000. So, the plan got billed $103,500 — more than four times the amount it paid the other hospital for the same operation. Bartlett recalled wondering why anyone would think this was okay."

 

Hospitals’ negotiated transaction prices for the privately insured typically vary by a factor of +/- 8 or more across the nation and by a factor of about 3 within a region (for equivalent services). Hospital market structure (degree of competition) appears to be a major factor but the relative absence of determined negotiators also plays a role.

 

Marilyn Bartlett "was a potent combination of irreverent and nerdy, a certified public accountant whose Smart car’s license plate reads DR CR, the Latin abbreviations for debit and credit."

Never underestimate an irreverent nerd.

[rukawa]

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. 

 

This is the problem with US single payer solutions. They don't really understand what makes single payer work. Rationing is key. Without this the costs of single payer will spiral out of control. All good single payer systems include lots of rationing or they use deductibles (a much much much better method) to control costs.

 

Interestingly Singapore avoids this problem completely. It has much much lower costs that even the NHS and it has much much much much much MUCH MUCH lower wait times. Singapore wait times are measured in hours...British wait times are measure in weeks. This means that Singapore's wait times are more than 100 times shorter than Britains. Its costs are half of Britains. Singaporeans also live longer.

 

The interesting question is given the incredible wait times in Britain...why aren't their healthcare outcomes much much much worse?! My explanation is simple...its because healthcare mostly does nothing. It doesn't really improve health. Thus single payer works because it rations something that was a useless expenditure to begin with.

 

A rational system would focus much much more on determining what actually is useful in healthcare and focusing all subsidies on that. Its also important to avoid killing people...something the US healthcare system does very often:

https://hub.jhu.edu/2016/05/03/medical-errors-third-leading-cause-of-death/

 

Its also really shocking to me how little connection there is in the healthcare system between scientific evidence and actual healthcare practice...or even how little concern there appears to about this issue. Given the way healthcare is practiced and the complete lack of incentives for evidence based care I don't see how healthcare could possibly be very effective. The proper way to view modern healthcare is mostly as witchdoctors, voodoo and shamans. That is what healthcare mostly is.

https://retractionwatch.com/2016/03/16/evidence-based-medicine-has-been-hijacked-a-confession-from-john-ioannidis/

 

Honestly this whole debate is mostly arguing about how to do insane and stupid things in a slightly less ridiculous way but no one questions the fundamental ways the whole system is setup. Single payer is just lipstick on a pig.

 

[meiroy]

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. 

 

This is the problem with US single payer solutions. They don't really understand what makes single payer work. Rationing is key. Without this the costs of single payer will spiral out of control. All good single payer systems include lots of rationing or they use deductibles (a much much much better method) to control costs.

 

Interestingly Singapore avoids this problem completely. It has much much lower costs that even the NHS and it has much much much much much MUCH MUCH lower wait times. Singapore wait times are measured in hours...British wait times are measure in weeks. This means that Singapore's wait times are more than 100 times shorter than Britains. Its costs are half of Britains. Singaporeans also live longer.

 

The interesting question is given the incredible wait times in Britain...why aren't their healthcare outcomes much much much worse?! My explanation is simple...its because healthcare mostly does nothing. It doesn't really improve health. Thus single payer works because it rations something that was a useless expenditure to begin with.

 

A rational system would focus much much more on determining what actually is useful in healthcare and focusing all subsidies on that. Its also important to avoid killing people...something the US healthcare system does very often:

https://hub.jhu.edu/2016/05/03/medical-errors-third-leading-cause-of-death/

 

Its also really shocking to me how little connection there is in the healthcare system between scientific evidence and actual healthcare practice...or even how little concern there appears to about this issue. Given the way healthcare is practiced and the complete lack of incentives for evidence based care I don't see how healthcare could possibly be very effective. The proper way to view modern healthcare is mostly as witchdoctors, voodoo and shamans. That is what healthcare mostly is.

https://retractionwatch.com/2016/03/16/evidence-based-medicine-has-been-hijacked-a-confession-from-john-ioannidis/

 

Honestly this whole debate is mostly arguing about how to do insane and stupid things in a slightly less ridiculous way but no one questions the fundamental ways the whole system is setup. Single payer is just lipstick on a pig.

 

The U.K. health service is absolutely fantastic if you have something serious and you literally would not have to pay a pound for it. This is its main purpose.  If, on the other hand, you have a sore throat then you'd do better to just research it on the internet and resolve it yourself.

 

Of course, it has a lot of crap built into the system but it is still far better than what the US got.

 

The fact is that the pig with the lipstick which you mentioned is us.  The single payer system is the best we can come up with, just like how capitalism is the best system we can come up with considering all of our faults and biases and whatnot.  It's stinky, it has a lot of issues but damn do we look good with that lipstick on.

[rb]

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. 

 

This is the problem with US single payer solutions. They don't really understand what makes single payer work. Rationing is key. Without this the costs of single payer will spiral out of control. All good single payer systems include lots of rationing or they use deductibles (a much much much better method) to control costs.

 

Interestingly Singapore avoids this problem completely. It has much much lower costs that even the NHS and it has much much much much much MUCH MUCH lower wait times. Singapore wait times are measured in hours...British wait times are measure in weeks. This means that Singapore's wait times are more than 100 times shorter than Britains. Its costs are half of Britains. Singaporeans also live longer.

 

The interesting question is given the incredible wait times in Britain...why aren't their healthcare outcomes much much much worse?! My explanation is simple...its because healthcare mostly does nothing. It doesn't really improve health. Thus single payer works because it rations something that was a useless expenditure to begin with.

 

A rational system would focus much much more on determining what actually is useful in healthcare and focusing all subsidies on that. Its also important to avoid killing people...something the US healthcare system does very often:

https://hub.jhu.edu/2016/05/03/medical-errors-third-leading-cause-of-death/

 

Its also really shocking to me how little connection there is in the healthcare system between scientific evidence and actual healthcare practice...or even how little concern there appears to about this issue. Given the way healthcare is practiced and the complete lack of incentives for evidence based care I don't see how healthcare could possibly be very effective. The proper way to view modern healthcare is mostly as witchdoctors, voodoo and shamans. That is what healthcare mostly is.

https://retractionwatch.com/2016/03/16/evidence-based-medicine-has-been-hijacked-a-confession-from-john-ioannidis/

 

Honestly this whole debate is mostly arguing about how to do insane and stupid things in a slightly less ridiculous way but no one questions the fundamental ways the whole system is setup. Single payer is just lipstick on a pig.

 

The U.K. health service is absolutely fantastic if you have something serious and you literally would not have to pay a pound for it. This is its main purpose.  If, on the other hand, you have a sore throat then you'd do better to just research it on the internet and resolve it yourself.

 

Of course, it has a lot of crap built into the system but it is still far better than what the US got.

 

The fact is that the pig with the lipstick which you mentioned is us.  The single payer system is the best we can come up with, just like how capitalism is the best system we can come up with considering all of our faults and biases and whatnot.  It's stinky, it has a lot of issues but damn do we look good with that lipstick on.

I actually lived in the UK for a while and I can attest that the NHS is actually pretty damn good. And no, you don't have to worry about your sore throat. I once walked into an NHS clinic with sore throat (and lungs) and walked out 30 minutes later with a diagnosis for bronchitis and a prescription.

 

While I disagree with Rukawa's conclusion that a single payer system is lipstick on a pig - it's not - he does make a very good point about rationing and outcomes. He's pretty much figured it out. The rationing is due to cutting capacity for non-essential items. Basically dishing out discomfort for cost savings. While anecdotal, I've seen this in my family. My dad had some back pain and had to wait 2 months to see a specialist. My mom once had a hypertensive emergency and got a cardiologist appointment for the next day. For the record, after my dad was done swearing he admitted it was the right thing for the system to do.

 

Over here in Canada where we have a single payer system. The issue around wait times revolves around these non-critical items. If you have cancer you'll get some pretty quick care. Doctors (looking for more money) run ads about how horrible it is for grandma to wait some for a hip replacement and people don't like it.

 

In Canada it is illegal to pay in order to jump the line. But I often wonder, since our healthcare costs roughly half as the US, how many of the complainers would be willing to pay double just for the procedure (let alone double for everything) just to shorten the wait time. My guess is that once they see the price tag, not many - complaining is free. 3

 

Another source is what Canadians consider a national embarrassment is that we ship a good number of people to the US to have procedures like hip replacement. The interpretation is that we can't fix our own people. But the reality is that due to the way the US system is set up they have a lot of excess capacity around things like hip replacements. Due to our size we can negotiate prices and get really good cut rates similar from the US - similar to a hotel that's trying to fill rooms. So really what's perceived as an embarrassment it's actually the government doing its job, saving money for the people.

[Cigarbutt]

^Interesting.

Few thoughts.

-International comparisons can be helpful but domestic concepts cannot be simply imported, there are no perfect systems and some systems are more broken than others.

-IMO healthcare delivery brings value but the recent trend (last 20-40 years) is based on gradually smaller incremental value gains and gradually larger costs.

-Agree that the challenge is significant but remain optimistic.

-Compounding can be slow but can be wonderful when incentives are better aligned (in the right direction).

-Value-based care is basically a capital allocation decision and we can do better (a lot better).

 

Recently read the following and thought it was useful:

https://www.amazon.ca/Better-Now-Improve-Health-Canadians/dp/0735232598/ref=sr_1_1?ie=UTF8&qid=1539345551&sr=8-1&keywords=danielle+martin+healthcare

Thought provoking, a lot to disagree with, but constructive grounds for progress.

[SharperDingaan]

You might want to consider what happens under 'right to die' legislation.

Palliative care is a lot cheaper that end-of-life medical/drug intervention, and choosing 'quality of life' over 'longevity of life' is becoming a lot more common in NA as aging boomers approach end-of-life. Reduce demand for the 20% of intevention services that add 80% of the cost, and total cost comes down rapidly.

 

SD

 

[Cigarbutt]

You might want to consider what happens under 'right to die' legislation.

Palliative care is a lot cheaper that end-of-life medical/drug intervention, and choosing 'quality of life' over 'longevity of life' is becoming a lot more common in NA as aging boomers approach end-of-life. Reduce demand for the 20% of intevention services that add 80% of the cost, and total cost comes down rapidly.

SD

Delicate topic, but agree.

In an era where opportunity costs are estimated and where potentially positive NPVs are discounted in the longevity escape velocity projects, perhaps some consideration should be given to the potential fact that the hospital should be a last resort solution, if quality of life is high on your list.

https://accessh.org/wp-content/uploads/2017/01/Bruce-Leff-April-4.pdf

https://www.commonwealthfund.org/sites/default/files/2018-09/1895_Klein_hospital_at_home_case_study_v2b.pdf

I would say huge opportunities for those putting customers first, single payer or not.

[rukawa]

The fact is that the pig with the lipstick which you mentioned is us.  The single payer system is the best we can come up with, just like how capitalism is the best system we can come up with considering all of our faults and biases and whatnot.

 

I've pointed out repeatedly that the Singapore system which is a Massively multiplayer system (since each person pays out of pocket for almost everything) is a vastly better system than the UK. Go on studiously ignoring this. Single payer is not the best we can come up with.

 

I actually lived in the UK for a while and I can attest that the NHS is actually pretty damn good...While I disagree with Rukawa's conclusion that a single payer system is lipstick on a pig - it's not

 

NHS, US and Canadian systems are pretty much the same when it comes to the practice of healthcare and even the incentives in the system. The big advantage of single payer is that it costs less. But I regard healthcare itself as fundamentally dysfunctional and broken. Paying less for it is the lipstick. The pig is healthcare itself in any country that practices it (Japan may be an exception).

 

I'll give one huge example that I keep hammering and yet no one cares...iatrogenic deaths (death due to healthcare). In the US there are estimated to be 250,000 each year. Its the third leading cause of death. In an intelligent system, you would deal with that FIRST. You would deal with that SECOND. You would deal with that THIRD. It would be your only priority until you solved it. Not increasing coverage or single payer. And yet none of you care?!

 

But this connect to a much larger problem...the complete lack of concern or incentives or even properly conducted research into what works in healthcare and doesn't. And the reason for this is the incentives in the system and way people think about healthcare. For doctors the incentives IN ALL SYSTEMS are to treat more patients for the treatments that have the highest dollar to time spent ratio. For patients all they want is for something to be done and done as soon as possible...whether what is done actually improves the situation is something the patients don't know and often the doctor doesn't even know. For researchers the goal is to publish flashy findings and get grants and funding from industry. Its much easier to conduct bad research and poorly supported findings than conduct good responsible research.

 

The result is a fundamentally broken system. Paying less money for it doesn't solve anything.

 

Lets give one example...routine mammogram screening. It is known to be completely ineffective:

http://theconversation.com/routine-mammograms-do-not-save-lives-the-research-is-clear-84110

 

And yet in Canada:

https://canadiantaskforce.ca/guidelines/published-guidelines/breast-cancer/

 

NOTICE that in Britain they actually invite women by mail to do this every year. Its basically going out of your way to encourage stupidity:

https://www.nhs.uk/conditions/breast-cancer-screening/when-its-offered/

 

As I said...healthcare itself is the pig. The mammogram example is also a great example of how all the incentives and thinking align:

 

1) Patients are in favor it because they remember some person they know where mammograms caught a cancer that was promptly treated or they remember a relative who died because of a cancer that wasn't caught. Obviously they just want something to be done, done quickly and for as much to be done as possible without regard for costs.

 

2) The doctor is incentivized positively (fees) and negatively (medical malpractice) to conduct more mammograms and treat more patients.

 

3) The cancer institutes are incentivized by bad press from outraged patients and doctors to keep mammogram screening recommendations in place.

[Cigarbutt]

^Mammography is controversial and poor incentives may result in poor results. OK.

 

Interesting to note though that in Singapore, there are guidelines for mammographies that are comparable to Canada or the US and, on a recurrent basis, like in most places in the world, they aim to periodically improve their guidelines with best evidence. So the way that services are paid for seems to have little to do with prevention guidelines.

 

Here's what seems to be their latest version for mammographies:

http://www.smj.org.sg/sites/default/files/5102/5102cpg1.pdf

 

I would tend to agree with most of what you describe but don't tend to agree on the black and white thinking and on the implicit assumptions that healthcare actors are intrinsically bad. There are poor performers but, in the main, people simply respond to incentives. To err is human and what one may realize with relevant experience and practical involvement is that, mostly, medical errors are not made by bad people, but rather by good people working in bad systems.

 

I may be biased though because healthcare saved my life and significantly extended the life of several significant persons around me.

 

[meiroy]

rukawa,

 

Thank you for your detailed reply. I've beeen a few times to Singapore. The health care system, in practice, is actually mostly Government run and the government pays for many of the public health services, public hospitals and doctors.  It plays a heavy role in keeping costs down and insurers have to compete within this cost frame.  Either way Singapore is a very unique type of an economy, similar only to Hong Kong, perhaps.  The U.S. has little to do with Singapore and cannot be Singapore even if it wanted to.

 

 

[Cigarbutt]

This post is for American "friends" who are reflecting on ways to improve their system based on factual analysis.

This post is not about which system is better.

https://www.msn.com/en-ca/news/canada/trump-calls-out-canadians-travelling-to-us-for-health-care-at-kentucky-rally/ar-BBOlip9?ocid=spartanntp

 

From data, Canadians do spend on US-based healthcare but most of the money spent results from unpredictably becoming sick in the US while being in the US for other reasons (tourism, business etc). There is a small segment of the population who chooses to go to the US for medical care and some of these cases can involve celebrities and political figures. The main reasons to go abroad: certain heart surgeries, substance abuse centers and experimental cancer treatments.

 

Estimates vary but, overall, between 1 and 3% of expenditures incurred by Canadians are spent in the US.

 

There are huge line-ups at the USA-Canada border (both directions) but it's not because Canadians are fleeing en masse to access US healthcare. Personally, the main reason I go to the US (frequent) is because I like to meet people there. :)

But when we go, we always buy complementary health insurance. Just in case.

[meiroy]

There are huge line-ups at the USA-Canada border (both directions) but it's not because Canadians are fleeing en masse to access US healthcare. Personally, the main reason I go to the US (frequent) is because I like to meet people there. :)

But when we go, we always buy complementary health insurance. Just in case.

 

Is the insurance expensive? Does it include emergency evacuation etc.?

 

I know that when expats, from any country, living abroad (e.g. a French expat in Vietnam) wanting to buy an international health insurance they are often introduced to two types: 1. global including the U.S.A 2. global excluding the U.S.A.  That by itself shows just how bad the situation is with the health system.

 

 

[Cigarbutt]

There are huge line-ups at the USA-Canada border (both directions) but it's not because Canadians are fleeing en masse to access US healthcare. Personally, the main reason I go to the US (frequent) is because I like to meet people there. :)

But when we go, we always buy complementary health insurance. Just in case.

Is the insurance expensive? Does it include emergency evacuation etc.?

 

I know that when expats, from any country, living abroad (e.g. a French expat in Vietnam) wanting to buy an international health insurance they are often introduced to two types: 1. global including the U.S.A 2. global excluding the U.S.A.  That by itself shows just how bad the situation is with the health system.

Travel insurance for medical emergencies, from my perspective, has not been expensive (+ or - about 2 to 3$ per person per day of travel, sometimes much less with "promotions") whether the US is part of the itinerary or not. The process is fast and convenient and, if underwriting is of any interest to you, they tend to focus on a few key questions (inclusion and exclusion criteria) with some criteria of doubtful value and with other important criteria not even being considered if you succeed going through the basic screening. Worth trying a few competitors because criteria and resulting premiums can vary wildly (not an efficient market, it seems). This is the commodity product. No personal experience with utilization of the product but know of people who had to use it with no problems concerning access, payments (no need for upfront fees, deductibles or co-pays) and evacuation if necessary once the medical condition stabilizes. I have a feeling that the companies make decent underwriting profits on this even if premiums are low (low expense ratio, relatively rare claims).

 

However, I hear that the insurance premiums shoot up very fast when certain criteria are met which define your risk of being sick "suddenly" (age, certain pre-existing conditions, recent medical visit, medication change etc). In these cases, you have to go through a customized process and, if the US is part of your travel plans, premiums shoot up exponentially.

 

BTW, we take this type of insurance on international trips only for catastrophic medical events but when we go to the US, even a simple visit or a simple ailment can result in a catastrophic bill as care is more expensive and visitors are typically charged the highest margin multiple of the basic Medicare fee but the care received is usually excellent.