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Why Nationalized Healthcare Increases Market Competition [1]

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Date: 2022-12-03

Checking into a Hopsital in Japan

One common misconception among Americans about one-payer healthcare systems, or hybrid healthcare systems with private supplemental insurance is this: when you nationalize health insurance, you will see an INCREASE in market competition, not a decrease in ways that matter for consumers of healthcare.

This is because when there is one nationalized healthcare coverage, there is no “in network” or “out of network” provider. Every clinic, hospital and medical center. Every urgent care provider, every ER. All of it, is covered by 1 insurance. You aren’t locked into going to one particular place or a very limited selection of places.

You can walk into any place nationwide with confidence you are covered by your insurance.

I speak from personal experience in both American healthcare, and a country with actual nationalized healthcare coverage: Japan.

I'm a Japanese American who grew up in the US. I began working in the US, but my job took me to Tokyo for 3 years. As a liberal for my entire adult life, I’ve always supported single payer or nationalized health insurance, but living in Tokyo—and my wife giving birth to our eldest child there—really opened my eyes to some benefits to nationalized healthcare that I hadn’t really heard emphasized in the US.

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Japan has the longest life expectancy in the world, aided by one of the best insurance and healthcare systems that you can find anywhere.

Japan has a hybrid system of a nationalized healthcare system that enrolls 99.7% of all Japanese nationals and foreigners that reside in Japan for longer than a year, with private supplemental insurance that people can choose to enroll in for additional coverage. For example, a common supplemental insurance coverage is “cancer insurance” that helps cover medical expenses associated with cancer treatments—fewer than 20% of Japanese people enroll in private insurance, finding Kokumin Kenko-Hoken (National Health) coverage to be sufficient.

How much you pay is based on your income—for lower income earners, insurance is free. insurance coverage of minors is free. For children below kindergarten age, not only is insurance free, healthcare (including medication and treatment) is free.

Japan achieves this by a combination of factors

Higher taxation: tax rates in Japan are significantly higher than the US. I’ve lived and worked in New York and California where state tax rates are among the highest in the country, but taxes in Japan are a good 5-10% higher than the US at most brackets, even higher among the higher earning brackets.

Negotiated Price Controls on Medical Care: This is an often discussed benefit of National Health Insurance so I won’t belabor the point—but Japan’s insurance board negotiates with representatives from the private and public hospital and pharmaceutical industries to set prices per insurance rates. Since 99%+ of Japan’s residents are covered by National Health, this defacto sets prices for the Japanese medical market.

Most medical treatment is dramatically less expensive in Japan. When I first arrived in Japan, due to an immigration issue, my wife wasn’t covered by health insurance for the first 6 weeks we were there before her coverage kicked in. She was 3 months pregnant so it was important that she be checked up.

Uninsured, my wife could been by a doctor for 4000 yen—or about $30.

One incident that really left an impression on me. The doctor noted my wife needed a test but warned me it would be very expensive because she was uninsured. I kept asking her, how much is the test, how much is the test. The doctor looked at me very apologetically and explained the test would cost 10,000 yen—about $70. I literally laughed.

I can’t stress this enough. it is INSANE that in America, getting an IV costs $300~400, having a hopsital bed for 3 hours in the ER can run you hundreds or even a thousand dollars.

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But here’s one benefit to nationalized healthcare that I don’t think most Americans realize: it’s an end to worrying about “in-network” and “out of network” distinctions. Furthermore, it creates real competition among doctors to provide quality services to patients.

If you’re part of an HMO in the US, you’re basically restricted to one provider. Even many ordinary healthcare plans will strictly limit you to certain providers, or you get struck with major out of network reduced coverage.

If you are travelling out of state and you get in an accident or ill, good luck paying for that.

None of this is an issue in a place like Japan.

Every healthcare provider is covered by your insurance. You have total freedom to go to any clinic or hospital. If you’re travelling domestically, you know your insurance is good whereever you go. Travel 800 miles from Tokyo to Kyushu, if your toddler has a fever and you want him checked up by a doctor, you can walk into any clinic you want with confidence that not only is your health insurance good there, that any treatment is… free.

Moreover, doctors actually need to care about how they treat their patients.

If a doctor is rude and sexist to his patients, his patients can just flip the bird and go to the clinic down the street.

What amazed me is that there are clinics in Tokyo that are open from 6PM — 2AM, or on weekends. If you need a checkup, you can easily find a clinic that will take you on you rway home from work, or schedule you on a weekend.

This is because clinics want your business, and they can’t just rely on an insurer to basically force you to make use of their services. They have to… compete.

So hospitals and clinics in Japan bend over backwards to try to cater to their patients needs and provide quick and efficient service. Major hopsitals invest money in quickly processing as many patients and pleasantly as possible. I don’t think I was ever made to wait longer than 20 minutes for an appointment in japan, while being made to wait an hour or more doesn’t seem at all uncommon in the US.

Basically, in the US people who are “free market” advocates focus on the way in which insurance competes with each other (in theory). While they ginoer hte fact insurance creates little de-facto monpolies for health care providers that allow them to ignore the needs of their pateints.

In a system where every clinic and hospital is on even ground, they compete with each other to provide better services—and the patient wins.

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[1] Url: https://www.dailykos.com/stories/2022/12/3/2139829/-Why-Nationalized-Healthcare-Increases-Market-Competition

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