Good morning, Hank! It's Tuesday.

So you know the Obamacare insurance exchanges that, depending on your political perspective, are either the cause of or the solution to so many of America's healthcare problems? Only about 6% of Americans actually get their insurance through those exchanges. Now, that's obviously very important to those six percent of people, but it's by far the smallest slice of the American health insurance pie. And I think the relentless focus on them in our political discourse speaks to a larger inability to have, for lack of a better phrase, a grown-up conversation about healthcare.

Okay, so healthcare is very complicated, and I'm gonna paint this in the broadest possible strokes. If you want far more information about health and healthcare please check out Healthcare Triage. But let's start with what health insurance does. Health insurance takes money from healthy people and uses it to buy care for sick people. You can do this through private insurance, which pools people together and takes money from them in the form of monthly premiums, or you can do it through a public insurer, which pools people together and takes money from them in the form of taxes. In the United States we have both. Almost everyone over the age of 65 is in this publicly funded insurance pool called Medicare. Many military veterans are in a similar pool run by the Veterans Administration. And there's a third publicly funded pool that covers many low income and disabled Americans called Medicaid. 

But just over half of Americans get their insurance through private insurers. This includes the 6% of people who are covered through the Obamacare exchanges, but mostly people who get their insurance from their employers, because large companies are required to offer health insurance plans to their employees. Then you have the 9% of Americans who don't have any health insurance at all. That number has dropped a lot in the last five years but it's still higher than any other wealthy nation.

So the current US healthcare system is widely considered to be, if I can use a technical term, bananas. We spend so, so much on healthcare; about 18% of our total economic output goes to healthcare. The average among other wealthy nations is closer to 12%. And we also don't get particularly good healthcare outcomes, like we come up short in many, many metrics, including life expectancy, where we trail countries like Chile and Slovenia, both of which spend less than 10% of their GDP on healthcare and, for the record, both of which also have higher rates of tobacco usage. 

Now you would think that with lots of private participation in health care markets cost would be driven down, right? Like, private companies can make refrigerators or cars much better than governments can make refrigerators or cars. But healthcare is a weird market on a few levels. First, there's the problem of inelastic demand. Like, if I need a medicine to keep me alive, I can't effectively negotiate the price of that medication because, in the end, I'm gonna whatever it costs.

And there's the problem of competition being something of a illusion. Like, for instance, if you're having a heart attack, it's generally not considered a good idea to call around to a bunch of area hospitals to find out who has the best deal on heart surgery this week. There should be competition among private insurers, but plans are often extremely confusing. Like, you might pay less upfront and think you are getting a good deal, only to find out later that what you need to be covered isn't covered. Like it's hard to compare cellphone plans effectively, let alone health insurance plans that might or might not cover literally thousands of different procedures. Plus, having your insurance status depend partly whether you work for a big company is a huge disincentive for innovation and entrepreneurship. It tells people, don't start a new business, don't strike out on your own, because you won't be able to get affordable health insurance. 

So, all in all, we ended up with a healthcare system where more tax dollars per person go to publicly funded healthcare than in most other countries and yet we don't have publicly funded healthcare for most people. And most Americans agree on this, only about 32% of us think that our healthcare system is good or excellent. And yet, around 70% of Americans think that their personal healthcare is good or excellent and therein lies the problem. 

Most serious reform proposals would involve big changes for many people in that 70%. And as the Republican party has lately learned, it's easy to talk about healthcare reform in the abstract, but when you put pen to paper, it gets complicated. So all healthcare reform boils down to three factors: quality, cost, and access. Obamacare sought to improve access. It didn't do much to change quality or costs. And to do that, it spent a huge amount of money, like a trillion dollars in the first decade. Now, it increased some taxes and cut some spending so as to be deficit neutral, but it spent a lot of money to get a lot of people health insurance. So today, fewer people are uninsured, but it cost a lot to get there, that was the trade-off.

Republican plan sought to reduce government spending of healthcare, but that also comes with trade-offs. In this case, it would have resulted in millions of people losing their insurance, which was a hard sell to moderate Republicans. So the GOP bill offered tax credits to help people buy private insurance, but that meant more spending, which made it a hard sell to conservative Republicans. Like the ACA itself, the GOP bill would not have done a lot to address the overall cost of healthcare in the United States or the fact that our quality of care isn't great. Because to have those conversations we need to accept that, as Healthcare Triage always says, 'Tradeoffs are inevitable'. 

Sidenote: I just realized that my collar is turned, so I fixed that. But I bet it was annoying to lot of you, sorry. 

Right, so the most commonly cited solution to the US healthcare problem is the single payer healthcare system or Medicare for All, as Bernie Sanders calls it. In this proposal, all Americans would be able to get the kind of publicly funded insurance that seniors now get and studies have shown that this would lower overall US healthcare costs. Although probably not to the rates seen in most European countries. Still there would be less money spent on administration and advertising. And also on care itself, because a bigger insurance pool can negotiate prices more aggressively and this would be, like, a huge insurance pool.

But there are trade-offs, like, it's accurate to say that Medicare for All would lower overall US healthcare cost, it's also accurate to say that it would cost hundreds of thousands of jobs. And many of them would be good paying jobs, from medical device salespeople to insurance adjusters to marketing managers. And with less money being spent per procedure, lots of other people would see their incomes go down, including many doctors and nurses. Also it would be good to spend 12% of our GDP on healthcare instead of 18% if we could get some outcomes but there is a word for what happens when 6% of your total economy goes away overnight, recession. 

Now the economy would recover and reallocate capital fairly quickly, but it wouldn't be painless.  It's also important to note that we currently have a single payer healthcare system in the United States, in Medicare, and it's not a bargain. Compared to other single payer systems around the world, it's very expensive, because we resist the kind of government regulations and price controls that are ultimately necessary to rein in spending. 

So a single payer system on its own, would not solve all of our problems and there would be trade-offs. Alternateively, some on the Right have argued that to increase competition and let market forces work, it's necessary to dramatically scale back or even eliminate government funding for healthcare. And that, too, might lower prices, but at the cost of many millions of people losing insurance. Similarly, decreasing regulation might lower prices, but it increases the risks of being treated by an inadequately trained professional or taking an unsafe medication, trade-offs. 

We could talk about over-regulation or tort reform or marketplaces or competition, but none of them would be a magic bullet. Because there is no magical solution with our healthcare system, where everyone wins and no one loses. Now, we can continue to make incremental changes, like the ACA or the alternatives to it, but as Doctor Carroll put it on twitter, 'however you want to reform healthcare, there will be trade-offs. Those who promise you everything are lying'. If we want a better healthcare system in the United States, we need to talk openly about those trade-offs. Because when we allow ourselves to be pandered to, our elected leaders seems more than happy to oblige us.

Hank, I'll see you on Friday.