Sen. Bernie Sanders’s new health care plan, called “Medicare for All,” would eliminate private health insurance and have the government pay for 100% of all health services. It’s not going to happen, but it does point the way toward a system that could work better: A public-private hybrid akin to what Japan has.
So far, the Sanders plan has encountered considerable skepticism, in both Congress and the media. Though it garnered the endorsement of a number of Democratic senators, House Minority Leader Nancy Pelosi has withheld her support. Catherine Rampell of the Washington Post writes:
What about the 178 million people who currently have employer-sponsored health insurance and overwhelmingly like it? What about the sticker shock awaiting individuals and employers over the tax increases necessary to pay for such a program? What happens if hospitals go bankrupt because Medicare reimburses at much lower rates than private insurance?…And most important, how do you actually pay for this enormous, multi-trillion-dollar overhaul? (Is Mexico paying?)
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It seems to me that Sanders’s radical plan is mainly a political negotiating tactic. There is a widespread belief among Democrats that when President Obama crafted his health reform plan back in 2009, he tried too hard to find a compromise that was acceptable to Republicans, and ended up unilaterally watering down the plan without winning any GOP support for his efforts. Sanders, by opening with an extreme proposal that has no chance of passing while Republicans control Congress, clearly hopes to shift the terms of debate onto ground more favorable to advocates of universal health insurance.
Thus, it falls to us pundits to think about what the eventual compromise plan should look like. This is a devilishly difficult task, because health care is such a complicated, multifaceted issue. But one fruitful approach is to look at other countries and find a system that seems to work well, and think about how to copy it.
So how about Japan? The country’s health care system is one of the cheapest on the planet. It costs less as a percentage of the economy than almost any of its rich-world peers:
Japan achieves this low level of spending even though it has one of the oldest populations in the world:
So despite having to take care of far more old people, and having a very high standard of medical treatment, Japan spends very little on health care. And few would dispute that the system gets results — people live longer in Japan than anywhere else.
A lot of that is due to diet, of course, but it’s hard to argue that the country’s health system is failing in any way. And though better diet would lower U.S. health costs somewhat, it wouldn’t bring costs anywhere near what Japan spends.