From a small northwestern observatory…

Finance and economics generally focused on real estate

Health care, and health care finance

with 2 comments

OK, I’ll admit right up front that my areas of expertise do not span health care.  I’m an economist, with a focus on micro-analysis and real estate.  That said, the Venn diagram of the Democratic primary and the pandemic crisis is giving voice to the “Medicare for all” crowd — perhaps a much larger voice than they otherwise deserve.

With that, I’ll talk about car buying for a minute.  Lots of people buy cars — I own several.   At the top of the economic food chain, buyers just write a check.  Some have pre-arranged financing thru their bank.  Others get a loan at the dealership itself.  There is even a “buy here pay here” option in many places for car buyers with truly awful credit. (The imputed interest on those loans is usurious, but that’s for another day.). If you absolutely CANNOT afford a car, or don’t really want one or you’re too old to drive, there is mass transit, which may be subsidized by the local taxpayers, will usually cost a trifle to ride, and may be underwritten by employers for their staff (we do that at Greenfield as an employee benefit).

How about acquiring a place to live?  For about 60% of American households, that means an owner-occupied residence (mostly single family, but some co-ops and condos).  Mostly those are financed with mortgages.  The rest of us live in apartments or rental houses, and those residents are usually utterly clueless about how the building is financed.  Admittedly, there is a bottom rung of the ladder, and we struggle at the local level to provide shelter for all.  However, there is little evidence that public sector intervention solves that problem successfully without private sector partnership.

The point being, complex assets and services are generally provided in a manner agnostic to the financing of those assets and services.  I’ve heard all of the stories of how Canada and other countries have somewhat successfully implemented single-payer systems, but I’m still skeptical that a heterogenous nation like the U.S. could do that successfully.

That said, this pandemic has illustrated the problems of health care delivery versus health care finance.  The Feds are already stepping in with billions of dollars to ensure (not “insure”) appropriate epidemic control and emergency health care delivery to all who need it.  We can — and economically SHOULD — find a way to ensure that every American has access to health care.  However, the financing of said system can — and economically SHOULD — remain multi-tiered.  Health care DELIVERY and health care FINANCE are two different and separately complex issues.

If you are a union member, or an employee of a company with health care benefits, and happy with your system, you should be able to keep it.  If you can afford private health insurance, and prefer to go that route, so be it.  However, “Medicare for all” sounds a lot like “mass transit for all”.  I’m more than happy to see a portion of my tax dollars go to support a system whereby everyone has a ride to work, but I and my jeep will continue to enjoy the other lanes of the highway.

Written by johnkilpatrick

March 9, 2020 at 9:29 am

Posted in Uncategorized

2 Responses

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  1. John, I disagree. As someone who has been self-employed my entire life, I’ve seen the cost of healthcare premiums go through the roof at the same time benefits go through the floor. The number of people filing for bankruptcy because of medical costs is enormous. How many are one bill away from losing it all? I think a couple in Tennesee was being threatened with jail for not paying a medical bill.

    After turning 65 last year, I went on Medicare and had to have two procedures. I carry a supplemental plan for the 20% that Medicare doesn’t cost and I received excellent medical care. No deductibles, no copays,
    it was fabulous.

    I was at a meeting with twenty-two different people from around the world and a gentleman I was with was talking about how horrible it would be if we had universal healthcare. The people there were from Germany, Australia, England, Canada, and the USA. So I asked everyone, who is not satisfied with their healthcare. They all commented on how much they loved it. They couldn’t understand why we could figure this thing out

    If you’re currently paying $1,500 a month for a family plan, $18,000.00 a year and you have a high deductible and a high copay and the government raises our taxes $10,000 a year and everybody is covered, what’s the big deal? You’re now paying $12,000 and there are no preexisting conditions, no deductibles, no copays, no bankruptcies. If you’re rich enough, I’m sure you find a doctor who will take care of you, but like the interstate highway system you drive your cars on, we can afford to all pay a little to make room for everyone.

    Like

    Joe LaMonica

    March 9, 2020 at 11:09 am

  2. Joe — I don’t disagree with you. I think that more homogeneous countries are able to tailor single payer systems to their cultures and needs. Here in America, with our huge geography and heterogeneity, apparently we’re not ready for that. However, I would agree that we need some sort of safety net, both financially and on the service providing end, so that no one falls thru the cracks. My personal health insurance is also terribly expensive, but you and I are in that nasty bracket where we’re either going to pay for it on the front end or the back end. We need to figure out a more efficient delivery system, so that the financial side isn’t so burdensome.

    Like

    johnkilpatrick

    March 9, 2020 at 12:54 pm


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