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Culture War Roundup for the week of December 9, 2024

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I strongly question the insurance-based model for healthcare expenses.

One of the things that makes insurance work is that most people never need to use it. Life insurance stops being a thing (in almost all cases) when people retire - and most people make it to retirement. Car and home insurance are things most people pay for every year and yet use maybe once in a lifetime. Many people go on vacation every year for almost their entire lives and yet never file a single travel insurance claim. One third of physicians have been sued according to malpractice claim firms, but this is across a 40-year career - perhaps one in every sixty or seventy years as a doctor will they be (on average) required to use their malpractice insurance, if that. Most ships never sink. Most buildings never burn down. Most planes never crash.

Health insurance is different.

Many Americans, especially in old age, file health insurance claims most or all years. This is not what the classic insurance model is designed for, especially given the cost of some healthcare, which is why the US has created so many ‘workarounds’ that twist the provision of insurance to ameliorate the fundamental fact that health insurance makes no sense. These include Medicare (for a certain vast class of people no insurer could afford to insure) and Medicaid (for another vast class of people no insurer could afford to insure, just for a different reason). It’s why employers have to contribute to health insurance as a stealth tax, because otherwise many people would not be able to afford it. What is the difference between a system in which the government taxes companies by forcing them to pay for employees’ healthcare and then directly pays for the unemployed’s healthcare, and a classic single payer system? Multiple providers which are never really competitive because of an opaque pricing structure.

As with college tuition, the state has created a monster with no cost control, because the government backstops the most expensive treatment for a growing percentage of the population with unlimited “free” money. In a way, the US already has nationalized healthcare, just like it nationalized college education, it’s merely been nationalized in an extremely inefficient way.


I live in a country with a mediocre public healthcare system, in which almost every doctor and nurse is directly employed by the government in a full time capacity. But the NHS isn’t bad because it’s the NHS. It’s comparatively much cheaper than almost any other first-world healthcare system in a country populated primary by Europeans (can’t compare to eg. Singapore or Japan where people are much healthier and the culture is different). The NHS sucks because everything is done for the cheapest price possible, there’s been no economic growth in 20 years, and British GDP / capita is half of that in the USA, because Britain is poor. Its mediocrity is for the most part a consequence of the British economy, which is poor for largely unrelated reasons.

But I increasingly think the model, or maybe at least the Australian or Swiss semi-public models, could be successfully exported to the US. The usual criticisms of universal healthcare are already rendered bullshit by the American system. Homeless psycho scumbags already get millions of dollars in free healthcare in the US subsidized by the middle class taxpayer that they never pay back, it just gets taken from them in a slightly different way. The NHS isn’t really more “socialist” than the US system at all, because working people are still paying for everyone else in the same way. Old people (by far the most expensive demographic) already get free single payer in America. In fact, the US system is arguably even more unfair, since it costs much more as a percentage of GDP than the British system, which given usage statistics means middle class Americans are relatively redistributing more of their wealth to the old and poor in healthcare costs than many Europeans are.

One thing I've heard (correct me if I'm wrong) is that European health systems like the NHS are more than capable of saying no to unnecessary treatment.

The worry is that we lack that ability in the U.S. As a result, we'd end up with all the monstrosities of our current system with even fewer checks on costs. That was certainly the system that Bernie Sanders was proposing during his campaigns.

The necessary increase in taxes could cripple the US economy as well, making us like Britain in more ways than one.

As usually, it comes down to government effectiveness. When the government is effective, it unlocks all sorts of wonderful societal gains: high speed rail, nuclear power, great health care, etc... But when our government is broken and corrupt, more money just equals more waste.

The last few decades have seen government services in the U.S. erode, not due to lack of money but due to lack of competence. In theory, a single-payer system could reduce costs. In practice, it won't. Not with our current government.

One thing I've heard (correct me if I'm wrong) is that European health systems like the NHS are more than capable of saying no to unnecessary treatment.

The worry is that we lack that ability in the U.S. As a result, we'd end up with all the monstrosities of our current system with even fewer checks on costs. That was certainly the system that Bernie Sanders was proposing during his campaigns.

In a way, this is part of the problem. A lot of conservative and libertarian criticism of nationalized healthcare is about people being “denied treatment” - almost always terminally ill children who have no hope of survival, brain dead people who will probably never come out of a coma or be non-vegetative, and other cases where the US spends millions of dollars on someone unnecessarily. See the furore about QALYs and death panels. With insurance, premiums can just go up next year, and employers and individuals will just have to pay. Insurers have no real incentive to even negotiate drug costs downward.

The British government is no less easily persuaded by public mawkishness about grandma needing care than the American government is. It is cost pressure and cost pressure alone that forces this kind of pragmatism on the NHS because managers know what the budget for next year is going to be for the entire healthcare system, and increases have to be directed approved by Parliament, the same way defense spending has to be approved by Congress. There’s limited obfuscation, if the industry needs 10% more money next year congressmen have to put their name to that increase. If they don’t, then the system has to cut costs whether it wants to or not.

Do you think that the British cult-of-NHS stuff sometimes mocked by contrarians is about government trying to "pay in appreciation" to make up for things that can't be paid for in real money due to constant cost control?

I think the US system allows the public to dump blame for high costs on insurance executives who are (as we see now) pressured into approving treatments. The UK system seems healthier, in that there’s less anger around healthcare and most people support stuff like QALY-based decisions because the fact that it’s “our” money is more obvious, such that even the median person understands it.

I'm not sure how well the QALY stuff works in practice. I heard stuff about the public being able to pressure the NHS into funding treatments that didn't pass QALY tests. Puberty blockers were also funded by the NHS at some point. Though, I think this treatment seems to be around £1000/year so maybe if your QALY bar is £20,000/QALY then you can make the numbers work if you are able to find some marginal net improvement across the cohort. But I'm very suspicious of these mental health treatments. What if some dude claims if he spends £1000/year on good quality alcohol that passes the QALY bar? At what point does it morph between healthcare and funding utility monster lifestyle choices?