Conversation

Singapore’s system has a lot of virtues but conservatives don’t like to admit that it’s all underwritten by the Ministry of Health doing nationwide all-payer rate setting.

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Marco Inaros

@Marco20307855

Dec 5

Replying to @mattyglesias

What about Singapore’s model?

Singapore does this more gently than European countries, they characterize it as “benchmarks” published by the Health Ministry and they allow some flexibility in price setting, but it’s basically a national price control system. moh.gov.sg/managing-expen

If you’re a small country like Singapore, the impact of this on innovation is negligible but it’s worth taking the balance of considerations seriously.

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Parker Rogers

@parker_rog

Oct 23

What happens when the gov't cuts prices on medical technologies? New research (w/ @YunanJi) finds a 61% price cut led to: 75% drop in innovation (may fully offset savings) 49% fewer new firms 28% more production moved overseas 3x repair/replacement rate

(1/n)

Actually not true! In the CBO single-payer models with the lower payment rates, money saved on (payer+provider) admin is actually 28% more than money saved on reducing (non-admin) provider payment rates.

I don’t totally understand the CBO model. But the gap in health costs as a share of GDP is much larger than the total administration spending which is like 1-2 percent of GDP.

What about savings in single payer drug plans? Canada gets the same meds we do at much cheaper prices.

Right, that’s a lower provider payment (the provider is the drug company)

8.1K

TIICANN

@TIICANN

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But don't providers end up having to pay armies of admin staff out of the provider fee to manage all the insurance work? If the provider-side admin staff were cut by 2/3, wouldn't that lead to provider prices dropping?

Good Try.

I agree physician payments are underrated as a source of costs because everyone likes doctors. But I think this analysis overlooks how a lot of providers have much higher administrative overhead of their own, so a lot of "payments to providers" is in fact administrative.

It is the Bizarro World inversion of the education economy, where endless administrative costs have bloated it far more than paying teachers, custodians etc

Firas D

@firasd

I was told there would be no malarkey

One could argue that even back in the 90s, pre-ACA, focusing on insurance companies as the cause of exploding healthcare prices was misguided

My GP charged me $1000 for a 30 minute consultation where she spent 15 minutes looking at my problem and then referring me to a specialist. I think a lowering of payments to the provider is warranted in this case at least.

And you can make providers accept those lower payments because a truly single-payer system is a monopsony.

Of course. That’s how UHG racked up a 30%+ net profit this year. They make money by DENYING people health care, not facilitating it.

This is absolutely not true

Is single payer also incentivized to be more generous with coverage? GEICO, united, all maximize shareholder value by taking in premiums above what they’ll disburse

Even if the costs were exactly the same, I’d prefer single payer purely from a user experience point of view

Cost savings always means lowering provider payments. Look at the FFS cuts every year that Congress has to reverse.

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@kasthomas

Matt Fleming, Florida Expert

Thank you, Dr. Know-it-all.

That’s why such systems, the UKs NHS has shortages of care providers.

Zero Lies Detected.

Medicare for all would cut compensation by 40-50 % for everyone in healthcare care; commercial insurance especially ERISA benefits (plus some private pay) subsidizes 60 to 70 percent of compensation for hospitals and doctors and nurses all the way down to custodians, all

970

@Matt_Fleming321

Why do you oppose opening medicare enrollment to everyone?

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@foolrushingin

and governments, being all powerful and the single buyer, are able to negotiate dramatically lower drug costs too.

The cost saving comes overwhelmingly from rationing services. Look at the wait times for common treatments in Britain and Canada.

Better than what we’re getting now in Pharmacy.

And much less service availability. Peter Attia had a very good guest talking about various health systems on a recent podcast.

Tyler Cole, MD

@tylcole

Your statement is meaningless. What is a “provider”. Are you talking about hospitals? Doctors? Nurses? PAs? NPs? These all have different payment arrangements. Physician rates set by Medicare from the government have only declined for 2 decades, so you must not be talking about

Nationalize the health care system now.

How will this impact the supply of doctors if physicians salaries start dropping?

Single payer is a monopsony for health care services.

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OG Blockchain Lawyer Shrugs (I/me/mine)(priv/acc)

What about Singapore’s model?

We need more providers to make that work.

@OGblockchain

Theory: The cost savings in single-payer health systems come overwhelmingly from reduced-quality or denied health care to patients which results from lower payments to providers.

Mark in California

@Charles95684721

Yes, let’s see how health professionals like lower pay.

....and through rationing, e.g., excluding new and expensive treats, longer wait times, gate keeping services only to the most serious cases. There are a lot of compromises with the Canada/UK systems, which is why the public/private partnership approach used in continental

The CEO position is the one most easily replaced by AI yet they are paid so much that it negatively affects the ability of the company to pursue its mission statement. Business needs to get back into the business of doing business instead of just making a few people rich. Right?

akidderz

@akidderz

Why can't it be both?

Yet Medicare costs continue to skyrocket.

Bodhi Seeker

@BodhiSeeker

A Person Who Thinks For Themself

They mostly come from, "We're the only entity to whom you're legally allowed to sell this medicine and we're gonna have a little chat about prices."

You’re using the word providers. Some people will think you mean doctors, nurses and allied medical personnel. Providers also include hospitals and hospital systems which have huge administrative structures. Post provider payments go to them.

@dwinblood

The cost savings is a lie. It tends to lead to increased taxes (payments you pay even when not using it), or decreased service. Takes much longer to get in to see a doctor unless you go to an emergency room which is likely backed up due to non-life threatening things that

Awaiting my free stuff

@tesicram

Exactly.......nurse and doctors' salaries in US are significantly higher than in other countries. No one mentions that all these folks' incomes get cut by 30-50% if US is going to get their promised savings from Medicare4All

But it would have to lead to the latter. I don’t think most people have seen a Medicaid or Medicare itemization on a $10k bill. Maybe 10-20% actually gets paid. That’s offset by the cash and private HI payers. In a single-payer system, there’s no robust offset of private

Carnival Hotdog

@CarnivalHotdog

this is a stupid statement. in a single-payer system, administrative overhead should be nearly zero by design. our present system pays 10x on administration to 1x on licensed profession.

subjectively objective

@ChipHomme

We're already struggling with healthcare worker shortages.

There is only 1 way to reduce healthcare costs: reduce the need for healthcare. Nobody's working on that. In fact, the system has evolved to do the exact opposite.

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Matthew Kavanagh matthewkavanagh@bsky.social

doctors and patients are miserable in these systems. they only are alluring to outsiders unfamiliar with them. good healthcare is expensive and doesn’t scale. hopefully AI can help offload some demands in the near future.

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@MMKavanagh

Reducing administrative costs in US health care: Assessing single payer and its alternatives

In sorry

@mattyglesias

but that’s just not true. It’s been studied. Admin costs are the single biggest driver of higher costs in the US. Of course the admin costs are high when you fine insurance model… commonwealthfund.org/publications/i

Is this a good thing? Less money to doctors but the same or more to administrators seems backwards

Don't think so ... "Single‐payer systems and reformed multi‐payer systems generate significant savings in BIR costs. National BIR costs are reduced between 33%, 43%, and 53% in the single‐payer models..." pmc.ncbi.nlm.nih.gov/articles/PMC83.

From pmc.ncbi.nlm.nih.gov

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@NovosLabs

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Right, and the problem with paying Dr.s less is that they could pursue other careers that pay similarly and don't require 12-14 years of costly schooling and low compensated training

you lower costs by monopolising the market and squeezing the providers (and partially through economies of scale)

What’s the source on that?

it's not well known that insurance companies are the oppressed ones in this situation. they do so much thankless work for meager profit.

Berk

@AwayBerk

And that’s bad

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Berk

@AwayBerk

Dec 5

It would be pretty funny. But Parker Roger’s research should put the nail in the coffin for single-payer proposals. Using government monopsony power to constrain healthcare prices is a big no-no. x.com/mattyglesias/s…

This price ceiling also negatively impacts supply, which is why access is such an issue in Canadian healthcare. Getting a family physician PCP in the greater Montréal area had a 30 months waitlist when I left in 2018 and I hear it's only gotten worse since!

Indiana Jay

@JJD_Aqua

The administrative costs borne by the patient are much lower in a single payer system.

Plus, in many cases (like prior authorization) reduced admin costs doesn't actually save money overall but leads to *higher* overall spending: nber.org/system/files/w

Dan Durley

@DanDurleyTweets

This is an oversimplification but I think most people do not care about the Cost-savings perspective. Take away profit margin from insurers, hc admin costs from multi-payer, and keep the current avg provider payments the same and you’d come out ahead in single payer, no?

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Uve Reinhardt used to point out that society's cost savings had to come out of doctors' incomes, and that the AMA is a cartel that will do everything it can to stop this. Also, drs work incredibly hard and go into debt for 20 years to be rich in middle age; this would upset that

jonathan_borowsky

@jonathanborows2

How does the administrative burden on providers themselves vary? If the health-insurance system places a lot of admin on providers that could lead to a large compensating differential.

Ah so the pharmaceutical corporations charging rip-off prices are forced to change less?!? Ah yes! A very serious downside to consider

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Another Alt Another Day

@PhoneLazy

If every country has Cuba's purported physician patient ratio, would we see cheaper and more personalized care (even in private market settings)? Doctors may get less pay but it also can help ease up on work life balance?

NH Expenditures 2023 show 20% of costs associated with physicians + clinical services, is that really outrageous compared to single-payer countries? I see hospital care at 30%, assuming some of that also includes nurse/etc costs for those services.

“savings …… come overwhelmingly from lower payments to providers” Which is why on any given day in SE Michigan a couple thousand Canadian nurses are working. The pay - and longer shifts - are worth the drive.

Alan Luchetti

@AlanDownunder

These “lower payments” are very generous. I hate to think how generous US payments must be. Government as single payer cures a lopsidedness of market power that enables them.

Tung swampton

@cracked_240

This is literally fact, exception being countries with high immigration. There really aren't any mixed payer countries that have gone back on high immigration. It will show on data if UK, etc. flip on it over a couple years.

I'm gonna say it---the government bureaucrats also say "no" to more things than the private ones do--like IVF, cancer screenings, and experimental treatments. Things that foreigners come to America and pay to have done. That's part of that special sauce too.

Sensible Moderate

@sensiblemoderat

Saving Advice - Money & Finances

It’s 1.5% of GDP tho — in payer admin savings Do you know of many other policy proposals that instantly make the economy 1.5% more efficient?

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Is that a, uh, fact? And is is structural? Have any countries with high paid providers switched to single-payer in the post-modern era?

And who administers pay and profits off of a medicine market that is private with some distortions mostly not in the consumers favor, like lack of transparency? And is there not a lot of power and responsibility in this role?

Rational Thinker 69

@Rationalist69

I have a vague recollection that the US might achieve some UHC goals by going in a more German direction than a single-payer reset (that probably isn't politically happening anyway). Is this right, wrong? Someone yell at me

It’s also in gatekeeping the covered events decision, sometimes with brutal consequences. The shift to an HMO model versus major medical has been a big factor in increased premiums but narrowed coverage for expensive treatments. Have a cold, covered, proton beam therapy -no

Karl Miller

@lanthamsky

If I believe in dinosaurs, then they believe in me

Yes but “churn” among competing risk pools (which is maintained by duplicative bureaucracies) drives cost increases by impeding preventative medicine.

@SquirrelTheWR

Well, and just broadly denying certain types of care!

Matthew Porter

@m_k_porter

I’m not sure I buy this entirely. CBO ran an estimate that ~35% of healthcare expense went to admin cost, and eliminating private insurance would cut that in half. My experience in urgent care admin makes these numbers seem pretty realistic. I’m sure it is worse for hospitals.

If by provider you mean, healthcare systems and hospitals, yes, that’s true Payments to physicians is less than 10% of healthcare spending and was 12% 20 years ago

The reduced admin costs give rise to the lower rates as a matter of standard economics.

No Risk(a), No Reward

@NoRiskaNoReward

And we gotta be honest about this too: rationing of care. Preventive care in particular, as well as minor illnesses and injuries that can be dealt with via watchful waiting to start. And that’s OK with me for the most part, as I think we’re too quick to see doctors in the US.

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1.3M

@realjohnfrancis

But the security in knowing the system won't bankrupt you the individual is priceless.

Interesting if true - source?

False. United made $32 billion in profit last year

Mark White

@MarkWhiteIA

Often higher administrative costs.

taylortots

@TaylorTots99

Considering what hospitals charge there is a lot of room to reduce payments.

just wrong about everything and all in defensive corporatism, it's the most slavish subservience one could imagine

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Adam W Gaffney

@awgaffney

Dec 5

This is incorrect -- the Congressional Budget Office's Medicare for All cost study projected **$400 billion** in savings annually from reduced insurance overhead. It projected total provider payments falling by much less, or going up by much more, depending on assumptions. x.com/mattyglesias/s…

This is simply false. The US spends roughly 30% of all healthcare spending on administrative costs while Canada, UK, and other single payer systems spend around 12-16%. Additionally, it isn't the providers who are really profiting. It is the corporations who run the hospitals.

snikles313

@snikles313