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The Campaign Spot

Election-driven news and views . . . by Jim Geraghty.

More on Health Care Policy, and Trying To Not Be Boring



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Hillary Spot reader Keith asked a respectful question:

I’ll be honest- I do not consider myself a conservative but I find it important to read political points of view from all sides.  And forgive me for souding ill-informed but I don’t ever here any “conservative” plan for providing universal basic healthcare.  I understand that it would be too costly (and unnecessary)to provide laser eye surgery for everyone.  It’s probably not possible to offer everyone the most advanced and expensive cancer treatments, either.  But given that the US, by comparison with other wealthy nations, provides relatively poor basic care (prenatal, vaccinations, etc…-according to US census data, we have a higher infant mortality rate than Cuba), what could be the conservative argument against providing a basic level of universal healthcare? If the issue is cost it seems to me that providing basic universal healthcare might actually be even cheaper in the long run. 

Keith has a point that health care is not an issue that generally gets conservatives revved and fired-up. I came up with three points/ideas/concepts.

Part of our problem may be the sense that when health care is “paid for” by someone else – your employer, the government, etc., there’s little incentive to eliminate unnecessary tests, procedures, etc. (Somebody once explained it that when you’re buying something for yourself with your own money, your top priority is value. When you’re buying something for yourself with someone else’s money, price matters much less, your top priority is quality. When you’re buying something for someone else with your money, you’re usually very concerned with price and are willing to compromise on quality; and when you’re buying something for someone else with someone else’s money, you’re not too worried about value, quality, or price. P.J. O’Rourke noted that 99 percent of all government spending is in that last category.) Much of health care spending is using somebody else’s money to take care of yourself. 

One of my readers, Jim, put it this way:

My wife works in health-care. Biggest reason for expense: right now there is every incentive for her team to provide every conceivable service, even if the client is nearly dead. Since the clients or their families don’t pay directly, they want as much as they can get; since the therapist gets paid, they want to provide as much as possible, and no one ever says “Uhhh, is this helping?” The government has rules, but they know how to fulfill the requirements easily.

Programs like Medical Savings Accounts, etc., are, admittedly, comparably small-time solutions compared to grand, sweeping, single-payer overhauls. But if the procedures are being paid for by Joe Patient, instead of the insurance company, or his or employer, or Medicaid or Medicare or some single-payer government system, there’s greater incentive to say, “is this test/procedure/treatment necessary, or are there alternatives (preferably cheaper ones)?” As it is now, neither the doctor nor the patient has much incentive to look for treatment options that are cost-effective as well as effective - we don’t want anyone not healing or not healthy, obviously. But we also can’t act as if money is no object.

Second point – an issue completely missing from Obama’s address – malpractice insurance.  (Jay Nordlinger follows this endlessly depressing topic, and here is one of his best articles on “Tort Hell” in West Virginia.) Two generations ago, suing your doctor was pretty rare, I’ll bet.

Today every doctor knows that every procedure, every diagnosis, and every decision could be the trigger for a long and expensive lawsuit. There’s a reason that lawyers are derisively nicknamed “ambulance-chasers.”  We want patients who have legitimate cases against doctors to find justice, but the medical system is bending under the weight of an exploding rate of lawsuits and efforts to force an out-of-court settlement. When somebody wins a million-dollar settlement, the doctor doesn’t pay, his insurance company does. His insurance company then passes on the cost to all of the doctors they cover, who pass it on to their patients.

My third point is that when the public discusses what their health insurance ought to cover, they ought to remember that insurance is supposed to be about management of risk. Insurance policies are all about spreading risk across a broad group of people. If I run a car insurance company, I’m “gambling” that not all of my policyholders will total their car in a given year; I’m betting that only a few will, and what I collect in premiums will cover both their new cars and my operating costs and hopefully a profit. But your average insurance is designed to cover the unexpected – accidents, mostly – not the regular costs of owning and operating a car.

Over the years, our expectations of health insurance have changed dramatically. It’s no longer to cover the (hopefully) one-time-only costs if I’m in that car accident and I break my legs; now people expect their health insurance to cover contraception, regular checkups, Viagra, etc. — things that are not once-in-a-great while-expenses, but regular month-to-month expenses. (Er, in the case of Viagra, perhaps even more frequently.) This would be like having your car insurance cover filling up your tank.  On paper, it would/could/should be possible for either the government or the private sector to offer low-income citizens a low-premium health insurance plan that would only cover catastrophic cases – i.e., cancer, car accidents, etc. But your average regular month-to-month costs would be out of pocket…  

Hillary Spot reader Andrew made the case that not only is paperwork one-quarter the cost of health care, but that various lawmaking efforts to improve health care keep adding another layer of paperwork:

It is in fact possible that a quarter of all medical costs is paperwork. The problem is that almost nobody in America directly pays for his own health care (incidentally, that’s the main cause of high medical costs). And when somebody else (who is not even there) pays he surely wants a lot of paperwork. Be it Medicare, Medicaid or insurance companies and HMOs. On top of that there’s a lot of CYA paperwork in case John Edwards or one of his numerous colleagues files a malpractice lawsuit. And on top of that top there’s more paperwork to comply with HIPAA, COBRA and other acts of collective wisdom from our beloved Congress. A typical health care organization has a special “compliance department” or something like that with the sole mission of ensuring that all the government mandates are complied with (and that copious notes are taken). Oh, did I mention all the paperwork for the IRS?

On a related note, Hillary asked Yahoo users, “Based on your own family’s experience, what do you think we should do to improve health care in America?” The answers seem likely to make you weep. The dominant tone is, “I don’t know how to fix it, but give me free health care, I deserve it.”

A typical answer: “Make good health care affordable to everyone. Maybe charge for it on a sliding scale, but everyone can participate regardless of income. Health care should not be a privilege in this country it should be a right.” No word on how, just a demand that the potential future President “make” this the case.

Another answer: “I believe Canada has a better way. They say that people wait longer, and maybe some privileges are lost, but isn’t that a small price to pay for everyone having care?”

Canada has a great system, until you need a procedure that the system doesn’t cover because it’s too obscure. Also, it’s doing a… lousy (not my first word choice) job of keeping up with demand; in “America Alone,” Mark Steyn has a hilariously grim story of an expectant mother flown all over Canada because no hospital in the nearest two provinces had an open bed. Government-run health care: It will be like the DMV with surgery! 

The Canadian system is extraordinarily popular… among Americans who don’t have to use it. Similarly, one can shorten the title, “Canadian health care critic” to simply “Canadian.” 

Answer after answer demands, “lower the cost,” no word on how. Another laments, “I have been without a job, or at a job with no benefits and it is terrible to think that I either have to pay for my root canal or my rent, it is not fair to anyone to have to make such a decision.” Indeed, it is not fair. Apparently it is fairer for the state to force you and I to pay for this person’s root canal.

 

There is only one sure-fire way to lower the cost, and this goes back to that irrepressible law of supply and demand. If there were a lot more doctors and health care providers, there would be competition for patients, and doctors would have an incentive to lower their prices to attract more patients. (Obviously, this doesn’t work for emergency care, where you need the nearest ER doctor or surgeon ASAP.) Most proposals on the right side of the aisle have aimed at bringing market forces into the health care system. Inevitably, detractors accuse the right of kneeling at the altar of the free market, not caring about patients, sinister profit motives, blah blah blah, but the whole point of bringing the free market – competition – into health care is to expand choices for patients, and to bring costs down.

 

Hillary Spot reader Forbes, by the way, dismantled the sound-bite from Ron Wyden:

“For the money Americans spent on health care last year, we could have hired a group of skilled physicians, paid each one of them $200,000 to care for just seven families, and guaranteed every single American quality, affordable health care.”

So everyone else [involved in health care who isn’t a physician] works for free — nurses, x-ray techs, pharmacists, etc. (and hospital stays will be free). Isn’t that a reversal of your formula, 1950s medicine at 21st century prices? This just proves politicians are unsuited to solving complex problems–as if they really were philosopher kings–for he’s proposed that each family spend $28,500 per year on health care. What’s the median household income in America?

How is that affordable health care? A plan? That’s a non-starter, for it doesn’t even begin to understand how health care is provided–or how markets work when the incentives are all on the demand side. If your family had to spend $28,500 each year on health care, how much more health care would you be “consuming”?

In defense of Wyden, I think his sound-bite was simply designed to illustrate how much is spent on health care in this country every year. But yes, at the slightest scrutiny, the instinctive “Every doctor covers seven families? Boy, that sounds great!” reaction is revealed as hilariously shortsighted.

UPDATE: Hillary Spot reader Jaime writes in, “I agree with most of your arguments but you failed to address Keith’s central question: would providing a basic level of healthcare (vaccines and the like) drive down the costs of healthcare in the long run? A fluoride prophylaxis every 6 months is cheaper than a root canal later on. And so forth.”

Really short answer: I don’t know. Probably depends on how one defines “basic.” Vaccines are not terribly controversial; I could easily see Americans agreeing to publicly fund the cost of vaccines.


Tags: Barack Obama , Bill Richardson , Chris Dodd , Fred Thompson , Hillary Clinton , Horserace , Joe Biden , John Edwards , John McCain , Mike Huckabee , Mitt Romney , Newt Gingrich , Rudy Giuliani , Sarah Palin , Something Lighter , Tommy Thompson


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