Single Payer on the Late Night Show
Comedian Seth Meyers – host of his own late night talk show – spends 9 minutes ripping into the harebrained Republican proposals for replacing Obamacare and breaking down, hilariously, many of the issues with our current healthcare system.
We thought Meyers did a great job, with one exception – what single payer myth did he propagate? Comment below!
Current system is to make the rich richer ,while limiting health care!!
So true, or current system makes the rich richer and leaves everyone else behind. The answer is “Nothing but the Single Payer” https://www.youtube.com/watch?v=SNSbVYcAe-E . . I apologize had problems with the video, will re-record soon.
Excellent. Missed only one point. By citing the debacle in Vermont the impression was left that a single payer health care system will cost us more. The facts on the ground supported by multiple validated sources consistently demonstrate that a single payer health care system will save us money rather than cost us more. From the Congressional budget office to independent source, the answer is clear. Single payer is the most economical and efficient payer system that we know of.
Nailed it! We’re planning at Healthcare-NOW to do some more work doing public education around why Vermont did not move ahead with their universal plan. It was certainly not because of the cost, which would have been much lower than what Vermonters pay under the current system. This is the narrative that even some single-payer supporters like Meyers have come away with, though. More work to do!
Looking forward to clarity about Vermont … thank you!
Ben: Check my other comments.
The single most important reason to avoid state experiments with single payers is that most states, certainly Vermont the 2nd smallest state in the country, would still be inefficient risk managers due to their small populations.
One thing that is always true, in reasonably efficient insurance markets, is that half of insurers perform worse than expected and half perform better.
Conducting a bunch of single payer experiments in some of the smallest states in the country is a virtual guarantee of multiple failures and all the poor PR that entails. The best candidates for single payer experiments would be:
California 38,802,500
Texas 26,956,958
Florida 19,893,297
and
New York 19,746,227
After that they just start getting way too small.
Hi Thomas,
Denmark and Norway – two examples of well-run single payer countries – have populations of about 5 million.
It’s absolutely not necessary to have large populations for single payer to be effective. One of the main ways a single payer saves money is by being a single payer – so while Denmark has a pool of only 5 million people, they still spend only 12% of their GDP on healthcare because they have one insurer and the government can regulate the price of healthcare.
Hi Thomas – To double down on Stephanie’s comments, there are lots of countries with highly effective single-payer healthcare systems with even smaller populations. Iceland, Malta, Montenegro, Cyprus, Luxembourg, etc. have populations between 100,000 and 1 million. The problem with “small risk pools” is only when all the sick people are in one pool and the healthy people are in another, as we do here in the States. Small risk pools are fine as long as they are representative of the full health spectrum.
The folks in Vermont even wrote an in-depth article on small countries with single-payer healthcare that makes for a great read:
http://vermontforsinglepayer.org/blog/2013/09/a-tale-of-four-countries%E2%80%94and-the-lessons-they-provide-for-vermont-health-care-reform/
I ran for the state senate of Pennsylvania with single payer as my biggest issue. Put Pa in that category. It is not only great for health care but for jobs and the economy.
There is no doubt the US health care system is working for the
Insurance Companies, Pharmaceutical Industry, Hospitals and Doctors. Unfortunately the people are the only ones it’s not working for.
Here we are missing what Health Care means: Food that doesn’t include hormones, antibiotics and pesticides, including clean water (Flint) fresh air(fossil fuels)and people that that are concerned about their health and that of their families.
We need a different system, one that strives for the gold of standards and the example of leadership and pride, not of profit and the low ranking of outcomes and highest cost.
Candy, you forgot lobbyists and the elected reps who get all those donations from the medical industrial complex. Then there are all the CEOs and so on, and so on. Oh, the humanity. They will all be homeless, out in the street, hitting us up for quarters.
Good points, Candi. Add to your list of profiteers the food processing, meat, dairy, and egg industries, as well as the medical sick care industry that doesn’t counsel patients on prevention through healthful eating. An alliance of the Physicians Committee for Responsible Medicine and Physicians for a National Health Program would give people both the information they need and a supportive system for improving their health.
Medicare for all will work just fine, so long as the new entrants are staged every few years. Its administrative costs are less the a quarter of what the “private” insurers claim. And, of course, each administrative dollar is a dollar that does NOT go to health care for anyone.
Vote yes to 69!!
The single payer myth propagated was, as usual, that it would cost more. That and the crudeness of the commentary in general are only more reason not to stay up late.
His hilarious pelvic exam video showed Uncle Sam appearing as the doctor, implying that government would replace our healthcare providers. Thanks for the chance to debunk that capitalist myth:
Government (us using our own taxes) would simply replace for-profit health insurance with nothing but free, full-coverage, public health insurance for each and every one of us for life. Providers would all be well-paid non-profit. Amazingly, for a country as populous and rich as ours, the rise in taxes would be a pittance in relation to the benefits. Improved, universal Medicare, alone, would pretty much repair our economy. Read the bill for yourself–It’s short!:
https://www.congress.gov/bill/114th-congress/house-bill/676/related-bills?q=%7B%22search%22%3A%5B%22%5C%22hr676%5C%22%22%5D%7D&resultIndex=1
Ahmed says: As usual,the cost calculation TOTALLY ignores that in any publicly funded system NO premiums,copays and deductbibles are necessary and a single cost as withholding tax ,shared as now by employer and employee, covers ALL medically necessary services for ALl 320 or so Americans and saves about a trillion dollars per year.We now spend about 3 trillion annually (private and public spending combined) whereas, most healthcare economist agree that the same can be accomplished @ a spending level of about $2 trillion per year.Replacing premiums with a payroll deduction and a surcharge on high income and nonearned income are concepts that do NOT fit into soundbites!
The answer is clearly “Nothing but the Single-Payer” https://www.youtube.com/watch?v=SNSbVYcAe-E . . I also recall a communication with someone I have contacted on Facebook, Marissa Clark, her words “I can’t imagine believing the US system is better, I only make a modest income…” has also inspired the writing of a song that is a parody, borrows melody from Owl City – Fireflies. https://www.youtube.com/watch?v=kTFsGspGKF4
I have had my way more than fair share of bad luck with the job system, in our “so called” world’s best healthcare, couldn’t get hired to a benefits bearing/living wage job because nobody wants to hire anyone in their 50’s, plus being mildly autistic. https://www.youtube.com/watch?v=tf2rrBYEHuo . .
OK – So here is a primer on what single payer is really about. I wrote the book: “Standard Errors: Our Failing Health Care (Finance) Systems And How To Fix Them” because very few people understand how insurance works, and most of them work for insurance companies and trust me when I say that they don’t want anyone to know how insurance really works.
First and foremost, in health insurance size really, really matters. Small is really, really bad. Large is better. Really, really large is better still. And the absolute, hands down best, is one maximally large health insurer.
But why does size matter? Well, size determines how close to the average claim size for a population, the average claim size for an insurer will be. The larger the insurer is the closer to the average claim size the insurer’s average claim will be.
Why does that matter? Well, it matters because the closer to the population average the more predictable the insurer’s operating results. If the average claim size is really close to the population average, and the insurer’s premiums are adequate, but not excessive, the insurer will meet its profit goals every year, year after year, after year.
That is the overview. To really understand insurance you need to be very precise. There are several critical questions you need to answer if you really want to understand insurance, to wit:
1. What is the probability that the insurer will earn reasonable profits of 0%, 5%, or 10% of its premium revenues during the next year?
2. What it the probability that the insurer will incur losses in excess of of 0%, 5%, 10%, or 25% of its premium revenues during the next year?
3. What is the probability that the insurer will sustain crippling losses, becoming insolvent, and closing its doors without paying policyholder and third party claimants, not paying its employees’ salaries, not paying its suppliers and not paying its taxes?
4. What is the highest level of benefits an insurer can plan to deliver during the next policy year while having a specified probability of earning profits of 0%, 5%, or 10% of its premium revenues during the next year, or having a specified probability of avoiding losses of 5%, 10%, or 25% of its premium revenues during the next year, or having a specified probability of avoiding insolvency during the next year?
All of these questions can be answered, as I do in Standard Errors, with a bare minimum of algebra, probability and statistics. The takeaway points:
For any given premium that is adequate, but not excessive, a single payer, national health insurer will produce average claim sizes that are consistently closer to that of the population, than any smaller insurer can ever achieve.
That means that a single payer national health insurer will face virtually no risk, because risk, for an insurer, is having an average claim size that deviates from the population average by a significant amount.
Small insurers, on the other hand, have average claims sizes that wobble around the average, for the population, like a BB in a freight car. That means that small insurers face extraordinary risks of adverse operating results.
The risk small insurers face mean that they are more likely to have extreme operating results: Excessively high profits, or Excessively high losses. But small insurers can’t count on the excessively high profits, so they must constantly guard against the possibility of higher than expected claims and the operating losses and insolvency they may cause.
From the start of any policy year, very small insurers should assume that they will have higher than expected losses. What do they do to protect themselves from this highly likely possibility? They slash their benefits. They delay and deny claims that a larger insurer can routinely pay, because their risk of high average claim sizes is much smaller for larger, more efficient insurers.
The real cost of small insurers, is not their modest, very predictable, expense ratios. Unfortunately this is what most single payer advocates mistakenly focus on. The real hit of having hundreds of small, inefficient health insurers, is that they have to cut benefits by 50%, and more, if they want to reduce their risks of incurring operating losses and becoming insolvent.
While small insurers can earn excessively high profits, they are far more likely to miss their profit goals, incur steep losses, or become insolvent than larger, more efficient health insurers.
A not for profit, single payer, national health insurer, can offer higher benefits, at lower cost, than any collection of 2, or more, smaller health insurers because it faces virtually no financial risk whatsoever.
It is all about the math! It is also way past time that single payer advocates learn the math. We can stop losing arguments to myths if we all understand the real reasons why a single payer will cost more rather than less.
All that said, single payers at the state level are a colossal waste of time, energy and effort. Like all small insurers, the single payers of low population states will face the same sorts of risks all small insurers face.
Vermont failed for 2 principal reasons:
1. Vermont is a small state, 49th in the country in population size, with 626,011 citizens. If every citizen of the state was insured by a single payer, it would still be an incredibly small, inefficient insurer. If we wanted to insure every American, all 323,000,000 of us, by health insurers the size of Vermont, we would need 516 health insurers. Anyone really think that 516 health insurers makes sense?
2. Vermont wanted to use the most inefficient health care finance payment mechanism ever devised: CAPITATION, to pay its health care providers. Capitation makes health care providers tiny, extraordinarily inefficient, health insurers. If you can now see why Vermont is an inefficient health insurer, imagine what it would be like to turn thousands of Vermont physicians into inefficient health insurers for their patients.
That sums up the failed Vermont experiment with single payer in two crystal clear points.
So what’s the prognosis for Colorado? Colorado is 22nd in the country with 5,355,856 citizens. If every citizen of the state was insured by a Colorado single payer, it would be a more efficient health insurer than Vermont, but nowhere near as efficient a health insurer as a single payer, national health insurer, with 323,000,000 policyholders. We would still need 60 health insurers the size of Colorado’s population to cover all 323,000,000 Americans.
Will a Colorado single payer work? Chances are slim. But if they, or Oregon, 27th in population with 3,970,239 citizens, or Minnesota, 21st in the country, with 5,457,173 citizens, want any shot at all, they need to avoid Vermont’s mistakes in terms of size and capitation, and they need to understand insurance mathematics and economics a lot better than the people in Vermont did.
So here’s hoping someone from Colorado, Oregon, Minnesota and maybe even the die-hards in Vermont, is paying attention.
Thank you very much for your post, very informative!
Thx. Questions welcome!
Couple of typos – one inconsequential, one major :-)
2. What it the probability that the insurer will incur losses in excess of of 0%, 5%, 10%, or 25% of its premium revenues during the next year?
should be
“2. What is the probability that the insurer will incur losses in excess of of 0%, 5%, 10%, or 25% of its premium revenues during the next year?”
and
“It is all about the math! It is also way past time that single payer advocates learn the math. We can stop losing arguments to myths if we all understand the real reasons why a single payer will cost more rather than less.”
should be:
“It is all about the math! It is also way past time that single payer advocates learn the math. We can stop losing arguments to myths if we all understand the real reasons why a single payer will cost less rather than more.”
The inconsequential typo I had caught but not the MAJOR one … glad you did and corrected it. :)
:-)
I hate re-reading what I write – There is always something cringe-worthy
Thanks, Thomas. Good, clear evidence that the “economics” criticisms of single-payer are, just like “trickle-down economics,” political, not economic, arguments.
I put some illustrative exhibits, from the current draft of Standard Errors, up at the following link:
http://www.afn.org/~mathstat/StandardErrors/Exhibits05042016.pdf
The first, see Excerpt pages 50-51, describes the operating characteristics of an “efficient enough” insurer with a portfolio size of 1,000,000.
Once we establish the characteristics of a single insurer we fix the operating characteristics of all insurers selecting policyholders, at random, from the same population and employing the same claims settlement policies and procedures.
By eliminating all the ingenious ways insurers might alter benefits, we can focus solely on the impact of insurer portfolio size on insurer operating performance and, of course, portfolio size is the most important consideration.
The Table on Excerpt page 64 shows how insurer profitability probabilities vary based solely on insurer portfolio size. This is one of the most important reasons for the inefficiencies of small insurers. Because their profit probabilities are so low, compared, for example, to a national health insurer, or even some really large insurers like Insurer B, they are simply too exposed to financial risk to sustain the same benefit levels available by our Paradigm Insurer with 1,000,000 policyholders.
The Table on Excerpt page 70 provides the same sort of analysis for insurer probabilities of operating losses. Once again, the smallest insurers have extraordinarily high probabilities of incurring very high operating losses while much larger insurer face little or no financial risk.
The Table on Excerpt page 76 shows something I inadvertently omitted from the critical questions list: The surplus requirements of insurers. Here again, small insurers have extremely high surplus requirements because of their high exposure to risk.
Large insurers, on the other hand, really don’t need much surplus at all because their operating costs vary very little from year to year. While 323 insurers the size of the Paradigm Insurer can insure the entire population with aggregate surplus of $21 Billion, the 32,300 insurers of portfolio size 10,000 would need aggregate surplus assets of $1.4 Trillion – an extraordinary waste of resources when a national health insurer requires no surplus because it faces barely any risk at all.
The Table on Excerpt page 85 shows how small insurers ought to adjust the benefits they offer in order to match our Paradigm Insurer’s probabilities of achieving profits between 0 – 10% of premium revenues. This table also shows that larger insurers can actually offer higher benefits than our Paradigm Insurer, though they will not do this because it would drive small insurers out of the marketplace and large insurers love it when small insurers fail. It makes it look as though all insurers face risk.
Guy in Costa Rica hospital for 6 days with implant surgery. His shots here are $350 a day. He got 20 shots there with surgery and 6 days for $2,862.00.
My uncle went into hospital here Christmas Eve through the 28th. His bill $62,000+. Need I say more???
Take away CEO’s, CFO,s, etc. and shareholders profits and then you get the difference.
Go Bernie!!!
Hear, hear, “Go Bernie!!!” :)
For me along w/so many others, and as a former Democrat as of 15 years ago now registered Peace & Freedom Party, it’s “Bernie or bust” … truly.
There is a minor mistake; one Nexium pill is not $215 in the U.S. although the point Seth Meyers is making is a good one, in the U.S. we pay 40% more for prescription drugs on average.
Often overlooked is the little matter about for-profit health insurers’ huge, mullti-billion dollar, investments in some of the most health-damaging industries…cigarette manufacturing, junk “food”, oil, fracking, pesticides, GMOs, pharms that make pesticides (even for tobacco), dioxin-producing chlorine interests, nukes, military weaponry, etc.
That people are compelled, by threat of IRS penalties, to patronize and contribute to such insurers ought be a prime reason to move on to tax-funded, public-administered, profit-free single payer.
There are many advantages to a single payer system of health care. I would rather pay a little more in taxes with a non-profit low overhead single-payer Medicare for all. This is a lot less that the ever-increasing premiums, deductibles, co-payments we are currently subject to. Our health care system is the most expensive and complicated system in the world because it is a profit making industry. Our heath care system is built on corporate greed and many people can’t afford it and they suffer and die from lack of needed care. If we take the insurance companies out of the equation, much money can be saved and better spent on real health care instead of high overhead.
The biggest advantage of a single payer system is that it would cover everyone. If you are too sick to work and lose your job, you could still have medical care and not lose your home or go bankrupt. Only a single payer system can ensure that health care is truly a human right and will let us take care of everyone.Single-payer represents compassion and justice, values which I am sure we all share.