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“The Pool” Doesn’t Exist, That Is the Real Problem

Get everyone in

In a disappointing but sadly expected move, Jared Bernstein’s tries to use the Centers for Medicare & Medicaid Services’ (CMS) newly released data on hospital prices to argue for Obamacare even though the law does almost nothing to solve the underlying problem. Bernstein writes:

You go to buy a Snicker’s bar, you a) face a similar price across the nation, and b) pay that price at the register.  Of course, health care provision is far more complex and varied, but the variation in price goes well beyond legitimate bounds, into “rent seeking” by hospitals and providers.

That’s not their fault–the current system incentivizes it.  And in fact, the more costs are controlled in the covered sector, the more they’ll try to gauge those on the uncovered side.  All of which should remind you of the urgency of getting everyone covered and into the pool.  In other words, the best medicine to treat this diagnosis is the implementation of the ACA.

The real problem is that “the pool” doesn’t exist and the Affordable Care Act won’t create one. There is no one pool. Medicare has a pool, there are 50 different Medicaid pools, each large company has its own pool, some unions are their own pools, insurance companies sometimes have several pools.

We have literally hundreds of different pools who need to separately negotiate with thousands of different providers for every single price. This is why health care financing in America is an inconsistent bureaucratic nightmare full of completely made up prices, discounts, endless negotiations with massive administrative overhead.

The way to solve this problem is to actually get everyone into a true single pool. This can be done either directly adopting single-payer or indirectly using all-payer.

The ACA doesn’t put everyone “into the pool,” all it does is simply move some uninsured people into over a hundred different pools.

Photo by Fadzly @ Shutterhack under Creative Commons license

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is an expert on politics, health care and drug policy. He is also the author of After Legalization and Cobalt Slave, and a Futurist writer at