Why are Democrats mostly focused on increasing healthcare spending, rarely mentioning any proposals for decreasing the costs of healthcare services?

Question

Bernie Sanders and Elizabeth Warren are currently the two most prominent candidates campaigning for universal healthcare, as an expansion of Obama's original Affordable Care Act. However their plans are mostly focused on increased government funding and rarely mention any measures for decreasing the costs of healthcare such as: increasing the number of doctors, decreasing the costs of drugs, reducing the amount of red tape, restricting liability lawsuits, etc. However this seems to be of crucial importance as healthcare costs in the US are undeniably the highest in the whole world.

Why is this the case?

Answer 1

This is a bit of a phony question on several levels.

To answer, they absolutely HAVE emphasized the healthcare cost savings.

First of all, you claim that they focus on "increased healthcare spending," in the title, but then you talk about increased GOVERNMENT spending in the body of the question. In a system that is based on PRIVATE, FOR-PROFIT healthcare financing, proposing that the increased government spending entirely eliminate the private sector spending does not equate to "increased healthcare spending."

Indeed, the greater services and savings have been the central selling point for any candidates proposing a single-payer solution -

Let’s just say, hypothetically, you are self-employed, and you have — you’ve got a husband and two kids, okay? Family of four. You know how much that family is paying today for health care? $28,000 a year.

Are people going to pay more in taxes? Yes. But at the end of the day, the overwhelming majority of people are going to end up paying less for health care because they aren’t paying premiums, co-payments or deductibles.

Bernie Sanders on the April 15, 2019 Fox News town hall

Option 1: Maintain our current system, which will cost the country $52 trillion over ten years. And under that current system –

• 24 million people won’t have coverage, and millions can’t get long-term care.
• 63 million have coverage gaps or substandard coverage that could break down if they actually get sick. And millions who have health insurance will end up going broke at least in part from medical costs anyway.
• Together, the American people will pay $11 trillion of that bill themselves in the form of premiums, deductibles, copays, out-of-network, and other expensive medical equipment and care they pay for out-of-pocket - all while America’s wealthiest individuals and biggest companies pay far less in taxes than in other major countries.

Option 2: Switch to my approach to Medicare for All, which would cost the country just under $52 trillion over ten years. Under this new system –

• Every person in America – all 331 million people – will have full health coverage, and coverage for long-term care.
• Everybody gets the doctors and the treatments they need, when they need them. No more restrictive provider networks, no more insurance companies denying coverage for prescribed treatments, and no more going broke over medical bills.
• The $11 trillion in household insurance and out-of-pocket expenses projected under our current system goes right back into the pockets of America’s working people. And we make up the difference with targeted spending cuts, new taxes on giant corporations and the richest 1% of Americans, and by cracking down on tax evasion and fraud. Not one penny in middle-class tax increases.

That’s it. That’s the choice.

Warren campaign website - Plans: Paying for Medicare For All

The premise that the candidates are just talking about increasing spending and are not talking about the savings is a phony one.

Edit/Addendum: When the Mercatus Institute's anti-social program "researcher," Charles Blahous published what was supposed to be a hit piece that highlighted the massive increase in tax revenues necessary for Medicare for all, it accidentally showed overall healthcare savings.

In response, Sanders posted a Twitter video thanking the Koch Brothers (sponsors of that "think tank") and went on to emphasize the savings of "hundreds of billions every year" for Medicare for All.

Sander's Tweet: Thank you Koch Brothers!

Answer 2

Your question seems to be equivalent to: why don't Democrats start acting like (small-government) Republicans when it comes to healthcare? Because that's not their idea of healthcare, or rather it's not what their electorate wants/expects:

(Some Democrats like Bill Curry even blame Obama for promising [in 2008] but eventually failing to deliver a federal public option with ACA.)

And, believe it or not, Sanders argues that Medicare for all would reduce administrative overhead:

There are certainly policies in the Sanders plan that would reduce American health care spending. For one, moving all Americans on to one health plan would reduce the administrative waste in our health care system in the long run.

And there is some data potentially backing up this

One 2003 article in the New England Journal of Medicine estimates that the United States spends twice as much on administrative costs as Canada. A 2011 study in the journal Health Affairs estimates American doctors spend four times as much dealing with insurance companies compared with Canada.

Warren's plan even promises a concrete figure for this cost reduction

$11 trillion in household expenses back in the pockets of American families.

But despite what politicians may be saying/proposing, there are few proven ways to substantially reduce healthcare costs (short of reducing care as well):

A new study, published Monday in JAMA, finds that roughly 20 percent to 25 percent of American health care spending is wasteful. It’s a startling number but not a new finding. What is surprising is how little we know about how to prevent it. [...]

Following the best available evidence, as reviewed in the study, would eliminate only one-quarter of the waste — reducing health spending by about 5 percent. [...]

The largest source of waste, according to the [2019 JAMA] study, is administrative costs, totaling $266 billion a year. This includes time and resources devoted to billing and reporting to insurers and public programs. Despite this high cost, the authors found no studies that evaluate approaches to reducing it.

“That doesn’t mean we have no ideas about how to reduce administrative costs,” said Don Berwick, a physician and senior fellow at the Institute for Healthcare Improvement and author of an editorial on the JAMA study.

Moving to a single-payer system, he suggested, would largely eliminate the vast administrative complexity required by attending to the payment and reporting requirements of various private payers and public programs. But doing so would run up against powerful stakeholders whose incomes derive from the status quo. “What stands in the way of reducing waste — especially administrative waste and out-of-control prices — is much more a lack of political will than a lack of ideas about how to do it.”

While the lead author works for Humana, he also has experience in government and academia, and this is being seen as a major attempt to refine previous studies of health care waste. Reflecting the study’s importance, JAMA published several accompanying editorials. A co-author of one editorial, Ashish Jha of the Harvard Global Health Institute and the Harvard T.H. Chan School of Public Health, said: “It’s perfectly possible to reduce administrative waste in a system with private insurance. In fact, Switzerland, the Netherlands and other countries with private payers have much lower administrative costs than we do. We should focus our energies on administrative simplification, not whether it’s in a single-payer system or not.”

After administrative costs, prices are the next largest area that the JAMA study identified as waste. The authors’ estimate for this is $231 billion to $241 billion per year, on prices that are higher than what would be expected in more competitive health care markets or if we imposed price controls common in many other countries. The study points to high brand drug prices as the major contributor. Although not explicitly raised in the study, consolidated hospital markets also contribute to higher prices.

A variety of approaches could push prices downward, but something might be lost in doing so. “High drug prices do motivate investment and innovation,” said Rachel Sachs, an associate professor of law at Washington University in St. Louis.

That doesn’t mean all innovation is good or worth the price. “It means we should be aware of how we reduce prices, taking into consideration which kinds of products and which populations it might affect,” she said.

Likewise, studies show that when hospitals are paid less, quality can degrade, even leading to higher mortality rates.

Other categories of waste examined by the JAMA study encompass inefficient, low-value and uncoordinated care. Together, these total at least $205 billion.

With more than half of medical treatments lacking solid evidence of effectiveness, it’s not surprising that these areas add up to a large total. They include things like hospital-acquired infections; use of high-cost services when lower-cost ones would suffice; low rates of preventive care; avoidable complications and avoidable hospital admissions and readmissions; and services that provide little to no benefit.

In addition to wasting money, these problems can have direct adverse health effects; lead to unwarranted patient anxiety and stress; and lower patient satisfaction and trust in the health system.

Here the study’s findings are relatively more optimistic. It found evidence on approaches that could eliminate up to half of waste in these categories. The current movement toward value-based payment, promoted by the Affordable Care Act, is intended to address these issues while removing their associated waste. The idea is to pay hospitals and doctors in ways that incentivize efficiency and good outcomes, rather than paying for every service regardless of need or results.

Putting this theory into practice has proved difficult. “Value-based payment hasn’t been as effective as people had hoped,” said Karen Joynt Maddox, a physician and co-director of the Center for Health Economics and Policy at Washington University in St. Louis and a co-author of another editorial of the JAMA study.

So far, only a few value-based payment approaches seem to produce savings, and not a lot. Some of the more promising approaches are those that give hospitals and doctors a single payment “as opposed to paying for individual services,” said Zirui Song, a physician and a health economist with Harvard Medical School.

At least on reducing drug prices, every leading Democratic candidate seems to have a plan

Lowering drug prices is a top priority for voters and an idea that President Trump has embraced as well, though he has yet to take major action. That has led Democratic candidates to come out with a variety of aggressive plans.

Bold plans to crack down on pharmaceutical companies has been a theme in the Democratic primary, with tough plans both from the more moderate side and from leading progressives.

Former Vice President Joe Biden, for example, also has a tough plan that would set up an independent review board to set a reasonable price for new drugs, among other steps.

Sen. Elizabeth Warren (D-Mass.) would allow the government to manufacture lower-cost generic drugs itself, while Sen. Bernie Sanders (I-Vt.) would tie drug prices to lower prices paid in other countries.

The "Medicare for All" plan backed by Warren and Sanders would also give the government much more power in setting lower prices for drugs.

Buttigieg would allow both Medicare and the new public option plan he would create to negotiate lower prices for prescription drugs, and those lower prices would be available to people with private insurance too.

So I think it's not really the plans or promises of cost reductions that they are lacking. Whether (and which of) their plans will be deemed credible is probably the real question.

As for limiting malpractice liability/lawsuits, 31 US states already do this, including big ones like California or Texas. It's not clear to me how much more can be gained in that area; it might be worth of a separate question, given the complexity of the matter. One of the studies cited by Wikipedia says

Overall annual medical liability system costs, including defensive medicine, are estimated to be $55.6 billion in 2008 dollars, or 2.4 percent of total health care spending.

This is clearly a big dollar number but also smaller than the other "waste" areas identified by the JAMA study, which doesn't even mention litigation.

Additionally, both Warren and Sanders seem to have a plan for reducing the costs of higher education (mainly by tuition elimination and college-loans debt relief measures, it seems), which may help with the supply of doctors as well, although the two of them don't seem to explicitly tie that with their healthcare reform ideas. (Biden has a more limited plan for tuition elimination only for two-year community colleges, and a very limited plan of debt relief, only for public service employees, it seems.)

If a proposal would fit the bill of just increased spending that seems to be Biden's plan, although hopefully I'm not mischaracterizing it by missing some big cost-reduction measure he proposes--he does propose one for medication, which I've covered in another quote further above.

The ACA guarantees that preventative health care services must be provided with no patient cost-sharing, but its authors were motivated in part by the view that outside of the preventative realm, Americans use too many health care services and should be encouraged to enroll in high-deductible plans that would offer insurance against catastrophic financial loss while discouraging the casual use of non-preventative medicine.

Biden proposes to make this whole scheme more generous across several dimensions, first by switching to the use of “gold” plans as the benchmark (meaning lower deductibles and copayments), second by making subsidies more generous across the board by reducing the share of family income that’s supposed to go to premiums, and third by eliminating the cap on financial assistance so even more comfortable families would get at least some help from the government.

Biden’s team estimates that making the ACA more generous in this way can be paid for through higher capital gains taxes on the rich. [...]

Biden “builds on” the ACA framework largely by relaxing the concerns about industry buy-in and patient overutilization.

So at least on this level of generality, Biden's plan is basically a less austere version of ACA. And it does come with a total price tag that does seems to be a net increase in the total budgetary cost to society, although mostly to be paid by the rich, per the above.

A senior Biden campaign official [...] estimated the cost of Biden’s plan to be $750 billion over 10 years.

Answer 3

The central tenet of the question is that the healthcare policies of Sanders and Warren are "mostly focused on increased government funding". This is a misrepresentation of both candidates' plans to move to single-payer healthcare.

Both plans are called "Medicare-for-all" but include significant differences on how they'd be funded. Luckily the question here doesn't ask about how government spending is funded, only the size of what is being spent.

The NY Times has covered several different estimates of how much Sanders' plans would cost. The graphic at the top the article illustrates the point the question is making, healthcare costs transition from a varied spending model to single-payer under Medicare via central government. The key point to make is that overall spending doesn't change substantially. The estimates later in the article run from a reduction of 5% of GDP spending to an increase of 3% of GDP spending. This would happen whilst healthcare coverage is expanded to include many who currently have no healthcare at all.

Medicare for all would give insurance to around 28 million Americans who don’t have it now.

That's something like an additional 9% in terms of numbers, for at worst a 3% increase in costs. That's around a 5% reduction in price per person.

All this spending would then come from central government rather than piecemeal from individuals and companies in the form of insurance payments. Which as the article points out allow significantly more influence over drug prices, which are currently negotiated by insurers.

By negotiating directly on behalf of all Americans, instead of having individual insurance companies and plans bargain separately, the government should be able to pay lower drug prices.

The question points out a number of areas that have not been covered by new policy, such as health professional recruitment and legal protections. Ultimately these are not directly a single payer issue. There is no policy to nationalise the US healthcare industry, so private hospitals would still recruit and employ doctors and nurses and deal with their own legal liability. The change is in how these hospitals get paid. Changes to how those hospitals are run may follow, but there are not in scope for Medicare-For-All policy statements any more than the number of doctors being recruited is the responsibility of the insurance industry now.

Answer 4

I cannot find corroboration or explicit confirmation on this, but it's in line with similar political decisions that have been made in the past (= observing how voters respond to specific talking points). If anyone can find information to back this up, I'd be very happy.

Because people's initially approving response to decreased costs is going to be counterproductive to the long term solution that the Democrats are proposing.

Those in favor of more affordable care tend to understand the problem via the bills they struggle to pay (or would struggle to pay if they were to need care), as opposed to the more abstract issue of healthcare privatisation. These two issues are invariably linked (privatisation incentivizes increased costs) but the average person doesn't always look for abstract solutions (policy making) to practical problems (bill paying).

If you tell people that you are going to drive costs down, that sounds like you've solved the problem for them and people will stop listening to the rest (or at least listen less attentively).
Having lower bills means it's easier to pay those bills, thus appearing to be a direct solution that covers their problem. People will be content with the reduced costs and will be less incentivized to then additionally consider changing the policy on privatisation.

While this may be easier to politically sell a simple (artificial) cost reduction, it's a short term fix with no long term viability. Keeping healthcare privatised the way it is will eventually lead to prices increasing again.

To use a simple example, Black Friday discounts (a direct cost reduction) are not economically tenable in the long run because it doesn't do anything to drive down costs during the other 364 days of the year. Even if a store were inclined to persist the discounts for as long as they could, eventually they would have to stop giving the discounts or they wouldn't remain financially viable as a business. The store's shareholders (= the government's tax payers) would be paying money into the bottomless pit that the artificial discounts create.
Instead, it makes a lot more sense for this money to be spent towards goals that lower overall production costs of the store's products, so that the prices can be lowered in the long term without becoming financially untenable for the store.

But people don't care about factory optimizations. They care about discounts. And if you make the discounts your main talking point, people are going to (wrongly but understandably) favor the immediate discount over the long-term-slow-burn price reduction that comes from optimizing the production costs.

Cure the disease, don't just treat the symptoms. Increased costs are a symptom from the commercialisation of healthcare.

As others have answered, the Democrats do actually include cost reduction in their proposal. But the main talking point is on tackling the privatisation of healthcare because it is the source of the problem. If the Democrats were to make cost reduction their main talking point, their original talking point would fall by the wayside because it's a less direct solution to most people's every day problems and thus will garner less support.

Answer 5

If you say you're going to cut costs by e.g. eliminating the vast sums that insurance companies skim off healthcare spending, and diverting that cash into actual healthcare instead, then you give powerful corporates an incentive to pump cash into your opponent's campaign and into lobbying against you.

The fundamental problem here is the fact it's lawful for companies (and wealthy shareholders) to pump enormous amounts of cash into influencing democracy. If USA could outlaw that, and have democracy act more on a per-person basis than a per-dollar basis, democracy and legislation would act in the interests of people, rather than in the interests of dollars.

Answer 6

Because they can't (easily)

In most european healthcare systems, there is some sort of official body that decides which measures (treatments, medication, ...) it pays. This gives that body an enormous negotiating power. That's most probably the reason why we don't see price-hiking (such as the notorious epi-pen) in europe. The official body would simply refuse to refund astronomical prices, taking away most of the market.

Lowering the healthcare cost would/ may well be a consequence of a publicly funded healthcare system. A democratic president or a democratic congress can't simply force the private actors in the US healthcare system to charger lower prices. However, they can create some sort of agency which collectively negotiates prices for their intended healthcare system. This increased negotiating power may lead to lower costs in the long run.

Answer 7

While most answers quite reasonably look at the question in detail, stepping back and taking a philosophical overview has some merit.

A potentially applicable aphorism is John Godfrey Saxe's codification
of the ancient "6 blind men described an elephant" .

Note: This image (without my added text in red) is used without attribution on so many sites that the source is unknowable and attributing only one source is inappropriate
[But I think that I got my version from here :-).] .

ie If you choose a perspective that suits your 'bent', whether consciously or because we each see the world through our own 'filter set', then it is easy, and often seems logical, to describe what one sees in terms of ones prevailing viewpoint.

Here, if the focus is "must cost us/me less money" then the delivered results in terms of healthcare are seen as secondary (but, hopefully, still important), regardless of how 'good' (or bad) they may be.

If the focus is "must optimise healthcare outcomes" (where 'optimise can have a range of possible definitions), then cost becomes secondary (but, hopefully, still important).

It is entirely possible that focusing on one aspect does not mean that the other aspect is not also optimised, but this is generally not liable to be the case.

Usually, you can optimise cost or healthcare outcomes, but not both.

---

I live in New Zealand.
For an example (without comment on its merits) of one extreme, look at the New Zealand healthcare system - universal free hospital care (but also waiting lists and much faster treatment in non life-threatening cases for people who also pay for private health care), low (or selectively, no) maximum cost annually for all pharmaceuticals, low (or selectively, no) charge for Doctors' visits, private & public hospital systems often employ specialists "in parallel", costs far lower than USA but also an ongoing target of attempts at cost reduction.
The system costs about 9.5% of GDP.