A Reduction in Healthcare

Would universal healthcare result in a reduction of healthcare services across the country?

One of the persistent fears with universal healthcare is that access to and quality of care would be impaired.

What Is Care?

Before diving in, let’s quickly define the quantity of healthcare available in the country. This would be, crudely, the number of healthcare professionals multiplied by their number of work hours.

12% of the United States workforce is in healthcare [source]. There are about 160,000,000 people in the workforce [source]. We can estimate that there are about 1,500 annual hours of patient centric time available to these professionals. Although a crude estimate, we can say the United States has an annual capacity of about 29 billion hours of healthcare services.

160,000,000 [worker] * 0.12% [healthcare worker / worker] * 1,500 [hour / healthcare worker] = 28,800,000,000 [hour]

Would Universal Healthcare Change that Capacity?

With healthcare providers remaining private and only the payment of services being a public service, there’s no immediate reason to assume that capacity would change.

Whether health insurance is provided by private companies or the government, we’ll have the exact same 28 billion hours of healthcare services per year.

The Same Capacity with More Patients Means Less Care, Right?

No. The amount of healthcare services would be 28 billion hours no matter what.

There may be fewer hours available per person, but that doesn’t mean there is less care being revived.

Won’t I Get Less Healthcare Services?

Maybe.

The amount of healthcare services the affluent receive would be decreased so that those with a greater need for those services can get care. We could simply say the increase in sharing is due do our caring, but that is not what we hear.

What About All this Talk of Rationing I Keep Hearing?

It is not the most vulnerable and poor among us who bemoan public healthcare because it would result in longer waits for appointments. In many cases, these people don’t even have access to a doctor. Those complaints are from affluent people who don’t want to wait longer to see a doctor so that a poor person can also see a doctor.

It is complaints of these affluent people that dominates the discussion because, by virtue of their wealth, they have access to the means to promote their interests (e.g., television and news).

So, There is No Chance of Reduced Healthcare with a Public Option?

Unfortunately, there is. There are two mechanisms that would result in reduced healthcare services across the country. However, neither are certain and both are easily avoided.

Idle Time

The simplest way to reduce our healthcare capacity is to introduce idle time into healthcare service providers; have doctors with open slots in their schedule or nurses with no one requiring care, etc.

This risk is highly unlikely to appear as long as healthcare providers remain private companies. Even if the rates for their services drop, they would still benefit from maximizing their scheduled time to maximize returns. However, if individuals aren’t paid enough to continue being a healthcare professional, that does lead to the real problem we would need to monitor.

Fewer Healthcare Practitioners

The chief risk is that people who work in healthcare today, would leave the industry. That would reduce our nation’s annual capacity of healthcare service hours and that would be a detriment to our collective health.

By leaving healthcare providers as private entities and making the payment for services a national service, this risk should be mitigated. We won’t be suddenly making millions of healthcare workers government employees; their day to day life won’t change at all.

The source of this risk would be if the public program pays so little for services that healthcare providers must pay their employees less or cut jobs. Cutting jobs would obviously impact our healthcare capacity, but paying less does, too. Some of those workers may find better opportunities in other industries.

This problem is easily avoided by ensuring the public option pays a similar amount for services that insurers do today. There must also be mechanisms to ensure that if healthcare providers feel the payment is insufficient, that they can have the payment changed. That will be important as technological advances change the cost profiles of different services.

Quality of Care

There are arguments about quality of care and innovation in healthcare as well, but these will follow the same logic as the capacity arguments. As long as the payments being made are cognizant of the full cost to achieve the desired outcomes (including patient satisfaction and innovation) and pays appropriately, there is no reason to believe it will be negatively impacted.

With all these generous payments, will we overpay?

That is a fair concern. We’ll tackle that question by itself another time.

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