Is it me or is that not that much money for a system that serves a 350 million-person nation?
That's $150 per registered user.
http://www.businessinsider.com/how-many-people-signed-up-for...
While we're on the subject of waste, the USA's ongoing experiment with market-based health care costs ~20 weeks of coverage per user per year compared to its social counterparts.
http://healthcarereform.procon.org/view.resource.php?resourc...
So what is the problem? The way I see it, there are two features that really distinguish the American system structurally. First, there's the state-by-state laws and regulations, resulting in effectively 51 different legal regimes. Second, American insurance is provided primarily through employers, rather than purchased individually. In fact, non-employer insurance is prohibitively expensive and often impossible to get.
I think the employer role is a much more likely cause of problems than the state laws, which are mostly consistent. Worse, tying insurance to employment traps people in jobs they hate - a distinctly un-American outcome.
So anyway, I used to think a more socialist system was the right answer too, until I looked more closely at the working systems in the world. It's not that one particular model works, because there are lots of models in use in other countries and they all work fine. It's that one model doesn't work - what we have in America.
So for a "normal" state, Switzerland actually has a bigger healthcare market. California, about 5 times the size of the Swiss healthcare market, still manages to screw things up royally though.
People are often blaming the US legal rules. In Switzerland, if you want to win a court case that a MD acted improperly (justifying damages), you have to get a jury of his peers (ie. MDs) to agree on that (which is not impossible, but ...). In the US, you have to get a jury of patients to agree on that. Needless to say, there are many, many more medical cases in the US, with spectacular damage payments (damage payments are also standardized in the EU. If an MD kills you through negligence or outright a mistake (not satisfying the level of a criminal act), his employer (even though they're mostly freelancers, this is an exception in the law) owes your family 300k euro (inflation adjusted since 19xx, so it's a bit more). In the US, it's not fixed, judges decide, but it seems that number runs into the tens of millions of dollars.
I'd call them "social".
They're all two-tier systems. The basic tier is heavily regulated and meets my definition of social: government dictates terms, price, profit margins, and provides funding such that everyone is guaranteed to be able to afford it. It's no more private than your typical govrnment contractor. The supplementary tier is private in name and practice. I agree that this is the best arrangement and I suspect we mean the same thing and are just defining "social" differently.
http://www.commonwealthfund.org/~/media/Files/Publications/F...
http://en.wikipedia.org/wiki/Healthcare_in_Singapore
http://en.wikipedia.org/wiki/Healthcare_in_Switzerland
http://en.wikipedia.org/wiki/Health_care_in_Germany
> The way I see it, there are two features that really distinguish the American system structurally. First, there's the state-by-state laws and regulations, resulting in effectively 51 different legal regimes.
Agreed. This is a huge problem that needs to be fixed by regulating at least the bottom tier of health care provision at the federal level.
> Second, American insurance is provided primarily through employers
Employer-provided insurance does have a very strong purpose in the free market that adds value vs individual insurance: it dramatically decreases the risk of the bandwagon effect (people with need X pile on to policies that favor need X and sink them). Put differently, it chops off the long tail of P(claim rate in insured population deviates significantly from that of national population). Risk=money, so employer-provided care actually does decrease the cost of providing health insurance. It also increases the effective bargaining power of employees by allowing them to act as a bloc and making it economically viable to actually analyze and compare the nuts-and-bolts of a large number of alternative plans.
Of course, there are other ways to achieve the same thing, but they're all "social": the government can dictate terms for the bottom tier of care (so all insurance plans look the same to someone maximizing personal utility of an individual plan) or the government can outright provide the insurance (no choice = no bandwagon effect).
I agree that the freedom-reducing effects of employer-provided care are decidedly un-American, but I contend that they occur as a direct result of allowing insurance companies the freedom to set different terms in the basic tier of their individual plans.
So if the purpose in the free market is to add value, it's pretty much a dismal failure.
The thing is, though, that employer-based insurance wasn't there for some dream of free market efficiency. Rather, it's a legacy from mid-20th century labor negotiation. Back when insurance was largely nonexistent, labor unions negotiated for it as a benefit, and it became widely accepted practice. This, along with commie-phobia, kept America from adopting a more socialist model. Today, it's a political problem, because unions are actually against eliminating employer-based insurance, as it's a powerful negotiating tool for them. So it's hard for Democrats to attack it.
That conclusion would follow only if employer-based insurance were the only plausible explanation we had to explain the increased cost. Off the top of my head, here are a few alternatives:
1. Pharma lobby has neutered efforts to centralize bargaining for drug purchases for private insurance companies (what is the bargaining power of BCBS Wyoming vs the NHS? Nothing.)
2. Doctor's guild has created an artificial scarcity of doctors by squeezing the training pipeline.
3. Differences in entry-level health plans prevent price competition because the valuation process is too difficult for consumers (allowing insurance companies to differentiate based on ads and such).
> So if the purpose in the free market is to add value, it's pretty much a dismal failure.
No kidding. Sometimes it works miracles, sometimes it falls flat on its face. Here it has fallen flat on its face. Repeatedly. And we keep throwing money at it hoping it will fix itself :/
> employer-based insurance wasn't there for some dream of free market efficiency. Rather, it's a legacy from mid-20th century labor negotiation.
That's the narrative they taught it a health care economics class I took. I don't buy it. Say what you will about the market, but it does not hesitate to tear down economic structures that have outlasted their utility. In particular, if you think that individual insurance plans are more expensive due to cultural legacy rather than due to economics, I invite you to create your own insurance company and undercut the incumbents ;)
> Today, it's a political problem
Yup. The only real question is how long the circus will continue. ACA was a step in the right direction, but it doesn't go far enough. Time will tell. My fear is that stopgap solution is the enemy of the good solution.
edit: Or Nimitz class nuclear aircraft carriers for $4.5 billion each, with 10 of them built.
My opinion based on the fact that nothing is free, and people who currently don't have insurance, but still require medical attention, still cost the rest of us money. Also, since people without medical insurance tends to go to emergency room only in critical cases - problems they had could be much cheaper if they had insurance from the beginning.
Anecdotally, I know such people :)
http://blogs.marketwatch.com/health-exchange/2014/07/30/gao-...
"Confusing and constantly changing marching orders from Centers for Medicare and Medicaid Services managers will get the blame for last year’s HealthCare.gov debacle under an independent government review, the Associated Press said Wednesday."
You've provided no evidence of this. Including that article.
I am just disputing your assertion that this is comparable to your typical Silicon Valley web company who rarely have to deal with legacy systems. Not whether it was a well run project.
On top of that, consider that the system needs to serve populations that are, shall we say, less sophisticated in the ways of technology and finance than the average startup's customer base? When I worked on a state system, we called it the "Amish problem", because our state has a significant Amish population.
There are people who don't read. People who don't speak English. People who are absolutely terrified of authorities. People who have religious beliefs that isolate them from computers. It's difficult and ugly.
I can absolutely guarantee you that they do not have the utmost of security. For a project to be really secure, you need extremely talented and meticulous developers. Judging by the clusterfuck that was Healthcare.gov's original launch, that does not describe the people involved. For example, this sentence (lifted from Wikipedia) raises a million red flags in my mind re. data consistency checking and sanitation: "Even for those that did manage to enroll, insurance providers later reported some instances of applications submitted through the site with required information missing.". No project like that can feasibly have the "utmost of security".
this probably was the source of the initial failure.
FWIW the current enrollment is 6mil so if you assume a very poor conversion rate of 1% then that is 600 million page views over the signup period and that comes down to about 38 views per second. At peak load that would only be like 1k concurrent views ( assuming a poisson distribution )
Have you ever worked on these projects before ? It DOES require technical expertise.
Working with legacy and enterprise systems requires knowledge that most developers think they could handle until they are actually in the weeds trying to understand some arcane domain model or file format. Combine that with the integration and scaling challenges and it is quite a technical problem.
Is it expensive sure. But to dismiss these projects without any visibility or understanding of the challenge requires some arrogance.
Yes documentation is always lacking and there is some reverse engineering that needs to be done, and yes there will always be some stupid wrinkle in the process, but this is a well understood problem and claiming its a challenge due to "Legacy Systems" is just a way of justifying the over 100% overhead that the government runs.
Legacy integration is huge and horrendously complex task. The coding is the least of it.
Getting that to work every time with all failure paths handled correctly is definitely architecturally challenging.
You're right. Good thing they completely failed to handle all failure paths correctly. This is extensively documented at http://en.wikipedia.org/wiki/HealthCare.gov#Launch_and_techn...
I am just disputing anyone who thinks projects like this aren't technically challenging.