After listening to the second set of Democratic debates, I realized that there exists a substantial divide among the presidential candidates on the question of whether private healthcare plans should be abolished once Medicare for All is provided by the government. I think that the question can be answered by looking at the way the education system is run in Finland.
“If you require all Americans to be insured through the same system, then the wealthy Americans are in the same boat with everyone else. Instead of wasting energy trying to cut services from the government health system (and trying to save money for themselves), they would be forced to try to improve the government system. And that would be a good thing.
“The problem with having only one provider, though, is that the system may become more and more bureaucratic. So what we need to do is set up a counter-measure that will fight bureaucracy. How can we do that?”
The idea of forcing all members of society to rely on the same system basically prevents the wealthy from setting up a two-tier health system. You do that by preventing wealth from buying a higher tier system. Finland does this with its education program. The country allows private schools, but the schools are funded in the same amounts as public schools by the government. “Even in private schools, the use of tuition fees is strictly prohibited, and selective admission is prohibited, as well: private schools must admit all its pupils on the same basis as the corresponding municipal school. In addition, private schools are required to give their students all the education and social benefits that are offered to the students of municipal schools.” Incidentally, Finland’s schools have been rated among the best in the world. (“Finland claimed top spot when levels of GDP per capita were taken into account — scoring well above expectations given its income level.”)
So why not permit private hospitals and private insurers? The only catch is that the private institutions must rely on the same government-funded amounts as Medicare for All. The private institutions cannot charge extra for their services, and must admit all patients on the same basis as the public program. In addition, the private plans have to give their patients all of the benefits offered to patients in the public plan.
The only difference really would be the structure of the plans and the operation of the private hospitals. The private institution would have the same funding and would have to offer the same treatment, but if they could do a better job of operating, they might show the public system ways of avoiding bureaucratic hang-ups. But the private institutions would have to admit all patients, in the same way that public hospitals and plans operate.
By allowing private plans to continue to operate, adopting Medicare for All would not require patients to lose their plans, their hospitals, or their doctors. They could keep their doctors, in the way that President Obama promised. But all plans, public and private, would be paying the hospitals and doctors the same. With the same prices being paid for similar services, there would be little administrative complexity in having different plans, which means the administrative saving of having one plan would essentially remain.
If some people were dissatisfied with the amount of money being paid to – say – pediatricians, there could be a public oversight agency which permitted patients or doctors to request a review. If the agency agreed, then there would be a review of the financial structure of plans and hospitals, to see if more could be paid to pediatricians. If this required raising the amount of public funding for the plans, it might be done through a budget revision, or possibly raising the entire amount paid by the government to the plans. But wealthy people would be not better off than poor people.
You might want to consider the idea of “leveling the playing field” in healthcare and education in other areas of consumption such as water and electricity. These services are precious; in our modern society we must have water and electricity. But the prices for the services are the same for all, which means that, at least in theory, wealthy people can waste the product because they can afford to do so. One simple way of dealing with this issue is to limit the amount of water or electricity that each person can take. Or the price of the product for basic needs can be set low (so that poor people can afford it) and use above basic needs can be set high. In effect, the wealthy users would subsidize the poor users. This is a two tier system, but it is made fairer by having the price for basic needs set below the cost of production and making those who want more product to pay more.
Personally, I do not like two-tier system, even if an attempt is made to make the pricing fairer. For example, take the highway system in which most drivers take the public highway but wealthy drivers can pay to take a parallel private highway. Even if the money collected from the private highway is put into the public coffers, those who are wealthy can pay to drive on a faster road. If there were no private highways, then everyone would have to use the same public road. If the public roads proved inadequate, then public funds would need to be used to improve them. We can assume (not always true!) that the wealthy will pay more in taxes to improve the roads, but at least everyone has the same services.
Consider, too, the cost of flying versus the cost of ground transportation. The cost of flying is increasing to such an extent that poorer people are unable to afford even the most economic seats. How do you solve this (if you feel that you should)? Probably the best way would be to allow very poor people to get special tickets at very low prices once a year. That way, they could afford to fly during their lives. Notice that we have no problem with allowing “first class” tickets that the wealthy can purchase. Travel is essentially a two-tier or more tier system.
In running a social system, we really need to decide when and how wealth can be used to “buy your way” into a better level of treatment. One of the most shocking ways that wealth can be used is when a wealthy jail convict can buy better treatment. A wealthy sex criminal in Los Angeles was permitted to buy comfort. “For $100 a night, he was permitted by the court to avoid county jail entirely. He did his time in Seal Beach’s small city jail, with amenities that included flat-screen TVs, a computer room and new beds. He served six months, at a cost of $18,250, according to jail records.” This is a two-tiered system at its worst. In fact, it is basically corruption. Punishment for crime should be strict, and no one should be able to use wealth to buy the way out of it. (Of course, we know that money is used in many ways in our justice system. The wealthy can buy better lawyers. If everyone is in a healthcare system in which doctors are paid the same, why shouldn’t lawyers be treated the same? Answer: there really is none. Health is a right. Apparently, being defended against a criminal complaint is handled in a two-tiered system).
I hope that we can get a healthcare system that is not two-tiered, but with as much freedom to choose as it can be but without wealth being used to tip the scales. If later we can take that same idea to the criminal justice system, so much the better.