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Politics & Policy

Why No GOP Health Care Bill Will Ever Be Really Popular

From the last Morning Jolt of the week:

Why No GOP Health Care Bill Will Ever Be Really Popular

The conventional wisdom this morning is that Republicans are on the verge of suffering a colossal defeat by failing to unify behind the American Health Care Act.  It’s only a colossal defeat if they let it become one. President Trump has offered a bold ultimatum: if the House doesn’t pass the American Health Care Act, he’s abandoning Obamacare. If this isn’t a bluff to win passage and he genuinely means it, it means he’s more reckless, capricious and more unworthy of conservative support than even his skeptics thought. A presidential declaration that repeal and replacement efforts are kaput for the remainder of his presidency would be the anti-Gorsuch, a giant vindication of his critics from the primary. He denounced Obamacare over and over again on the campaign trail. Now, in the face of predictable problems of a Republican Party divided on how best to replace it, he’s willing to abandon the effort?

Different Republicans are going to have different priorities in what replaces Obamacare. The U.S. health care system is big and complicated and has a lot of problems because it’s trying to address a lot of contrary desires. Americans want health care to be excellent, widely-available, and cheap. Experience tells us we can only pick two of those qualities.

A gigantic lingering problem for any reform effort is that many members of the public have wildly unrealistic expectations about what their health care should be and how much they should pay for it, and no politician in either party has much incentive to be honest about hard truths. There’s a strong argument that the entire concept of insurance doesn’t work well for health care, compared to, say, auto insurance. The vast majority of drivers will not get in a major accident in any given year, and plenty of drivers will go years and years without an accident. Consumers are comfortable with a system where most years, they will pay in a considerable sum and get nothing from their auto insurer for that year.

Auto insurance works because a lot of people pay in and get little or nothing in return (other than peace of mind and meeting the legal requirements), but a few people pay in a little and then wreck their car, and the company can afford the costs of repairs or replacing it and make a profit on top, enough to run lots of ads with that little gecko.

Everyone needs health care eventually. And even if you’re healthy and don’t foresee health expenses in the near future, you can get hit by a bus or fall off a ladder or slice your finger with a steak knife at any time. (That’s one reason why “preventative care” rarely saves as much money as the reformers hope.) Obamacare decreed that insurance should cover birth control, which is a monthly expense. Quite a few Americans take prescription drugs regularly to control chronic conditions. Significant health expenses aren’t as rare as car wrecks, meaning the insurers have to pay out more… which means they have to charge more in premiums.

The way to bring down prices is most markets is supply and demand, but that’s difficult to apply to health care costs compared to, say, shopping for a plane ticket on Expedia. If you’re hit by a bus, you need emergency care and it’s difficult to request the ambulance take you to the less-expensive hospital. People get very attached to the doctors they know and they’ve been seeing for years – thus the importance of Obama’s pledge, “if you like your doctor, you can keep your doctor.” Pediatricians watch kids grow up. People don’t like the idea of breaking off an established care relationship and shopping around.

On paper, we can increase supply, and you’ve seen market forces improve health services not covered by insurance; LASIK surgery and plastic surgeries are the most-cited examples. But while you can increase the number of doctors in the country (and nurse practitioners, etc.) it’s difficult to increase the number of the very best doctors. Even if we somehow forced medical schools to admit more students and produce more doctors, U.S. demand for health care is only going to increase as the Baby Boomers age.

The popular argument on the Left is to declare that health care is a right, and thus shouldn’t be subject to the pressures of supply and demand. It’s a lovely thought, until you start thinking through how this would work, because all health care is the result of someone’s labor. Somebody’s got to go through college and medical school and spend all those years studying to become a doctor or nurse or specialist. Somebody’s got to research and develop the prescription medication. Somebody’s got to invent, design, and build the MRI machine, robotic surgery arm, artificial limb, etcetera. And all of those people expect to get paid, and almost everyone would agree that considering their skill, education, talent and hard work, they deserve to be paid well.

When you declare something is a right, it means it cannot be denied, particularly due to an inability to pay. Which means someone else, i.e., the government is in charge of payment.

Put aside the exorbitant cost of having the government pay for everyone’s health care for a moment. You could argue the “government pays” system is close to what we have with Medicaid… except a lot of doctors find Medicaid payments to be way below far market value, “around 50 to 85 cents on the dollar of the actual cost of medical care.” Many doctors say that they’re still willing to take the personal financial loss that comes from treating Medicaid patients, up until the point that they can’t afford it. As of 2015, only 67 percent of doctors take Medicaid, and only 45 percent of doctors take new patients on Medicaid. Even the illustrious Mayo Clinic announced it is going prioritize non-Medicaid and non-Medicare patients.

The Democratic solution? Introduce laws forcing doctors to accept Medicaid payments. Some gratitude for the caring profession, huh? Making health care a “right” means that doctors are forced to work for reimbursement set by the government. It reduces them to tools of the state.

But this hasn’t sunk in with much of the general public. They still believe that there’s some system out there where they can get the very best care, choose any doctor they like, see any specialist they prefer, and pay little or nothing for it. And until that perception is dispelled, any health care reform proposal will be greeted as a disappointment.

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