Private Healthcare Stifles Innovation and Traps Workers in Unwanted Jobs
Private healthcare makes industries less innovative. It's time for change
One in four American workers stay in unwanted jobs just to keep their health insurance, a reality that suppresses wages and kills innovation. Having experienced the NHS in the UK, I argue that tying healthcare to employment creates perverse incentives for employers and prevents talented individuals from launching new ventures. Universal healthcare would free workers to take risks, improve working conditions, and drive the economic progress that industries like news desperately need.
When even the libertarians want reform, you know it's a bad deal.
- abeppu
In the US market, where union participation is also very low, it's weird to me that this is an important reason people stay in their jobs, may influence what kind of jobs you take (full time vs contracting?), but:
- job offers generally do not want to get into details on the health insurance offering. it's not a main "competition" point
- except when subject to some kind of union negotiated contract, the employer can change their insurance options from year to year as they try to save costs, but it's not regarded as a mass pay cut when they do
- there's no standard metric on "how much do our employees pay on healthcare" (i.e. employee premium contributions, deductibles, copays), "how much time do employees spend on the phone with the insurance company", and certainly no way to feed in your last year's records of health-care to see "on plan Y you would have paid C"
Though I think the private health insurance system is a dumb waste of overhead and paperwork and misaligned incentives, I do think that people would be more willing to switch jobs if they could know their plan was at least as good as the one they were leaving, both in money spent and in employee satisfaction. Opacity, in part owing to lack of commitment from employers, makes this harder.
- megaman821
This is less about private healthcare and more about how employer-provided healthcare is tax advantaged. Credits and tax breaks should go to the individual so they can choose and keep their insurance through different jobs.
- ajmurmann
Good article in general but such a misleading headline and framing. The problem, as described in the article's body, is employer-provided health insurance, not private healthcare.
- cdrnsf
I'd love to decouple insurance form employment and I'd also love to do away with the private insurance system in the US. I've always had insurance and the experience has been as uniformly poor, regardless of provider, as it is continuous. Any positive interactions and outcomes have felt like happy accidents, not the system working.
Remove the private actors, the adversarial billing, the friction with providers. It, at its best, ranges from bad to outright awful.
(I'd also love to do away with tax prep — the government knows what is owed, so why make folks prepare their own count and hope it matches?)
- tptacek
Since this is a comparison between entire economies --- not just health care but the impact on economic mobility as a whole --- an inconvenient fact for this analysis is that PMC Americans are generally better off under our private insurance system than they would be if they relocated to the UK; as in, they come out financially ahead, after pricing in insurance and provider fees.
Another problem with this analysis is that the UK's national health system isn't the only example of a major developed country with a functioning health system. Many countries without the US's problems have private providers and private health insurance.
It's plainly obvious that the US has severe problems. Ideological polarization has fixated the discussion on a contest between public single payer and everybody-for-themselves private insurance. But the core problems have not much at all to do with insurance. They are, probably:
(1) Most Americans get their health insurance through their job, as a path-dependent consequence of bad 1950s tax policy. This in turn insulates insurers from their customers and breaks most of the mechanisms an ordinary market (like food, or transportation, or tax preparation) has from going off the rails.
(2) Americans pay doctors (and providers generally) anywhere from 2-5x more than other countries do. Providers account for the overwhelming majority of all health spending; compared to providers, drugs are almost a rounding error. This in turn is probably a consequence of […]
- dzonga
I think the article is looking at the wrong abstraction.
private healthcare - e.g if there's a lot of private clinics - people paid cash, then yeah healthcare costs would go down & most of the care was preventive not treatment. competition naturally will force prices down & since individuals payers won't be able to afford massive amounts, the market will adjust it's prices vs having one large payer (gvt) i.e public healthcare or many private large payers(current insurance industry).
right now - the issue isn't private healthcare - but the wrong incentives to bill insurance companies massive amounts of money. then insurance companies countering back - by having large bureaucratic processes to avoid paying those large bills. typical complex systems.
- snapplebobapple
The problem is public is also terrible. What makes the difference is the ecosystem of policy and enforcement. Without that it will always>just find unique ways to be terrible. Look at my home coubtry of Canada. Also terrible just in completely different ways.
- mbgerring
My partner and I both just got new jobs after a long period of unemployment. Neither of our new employers offer subsidized health insurance. We both have chronic conditions for which we need regular access to medication. The financial cliff we will both go over going from Medicaid to paying for health insurance via Covered California, and likely paying higher prices for medication in addition to astronomically high (and increasing!) monthly premiums, is going to eat a huge percentage of our increased incomes.
I have no idea who is supposed to benefit from this system, other than the private health insurance companies.