One night, years ago, a fraternity brother and I sat up late into the night before another friend’s wedding, soaking in a hot tub, getting drunk and solving the problems of America’s legal system. The next day, neither of us could remember the details too well, but we were both pretty sure we had fixed everything.
A blog post like this, jotted down as I drink my morning coffee, is likely to be just about as useful in fixing our health care problems. But, that’s never stopped me before. Just having the conversation is sometimes useful.
Features:
#The bigger the risk pool, the better. The whole point of insurance is to pool risk under the theory that any one person’s future health care needs cannot be calculated with any degree of certainty, but the risk and consequent cost for a larger group can be. You just don’t know which person the actual costs will land on. You manage the risk by spreading the cost across the pool.
#Bureaucracy. There is going to be one. This is a fact of life that has to be dealt with. The current private insurance/hospital bureaucracy is formidable. A government bureaucracy would have to make an effort to be worse. The design of the private insurance bureaucracy is to maximize premium dollars taken in and minimize dollars paid out for health care. Actually paying for people to receive health care is something of a failure to this bureaucracy.
#End of life costs. We have to deal with death better. My understanding is that a huge percentage of health care dollars are spent at the very end of life. We need to figure out how to avoid largely futile expenses as best we can. Spending $500,000 to keep someone alive another 30 days when there is no reasonable chance the person is going to recover doesn’t make financial sense. However, it’s tough for family members to let a loved one die. It’s tough for a medical provider to tell people they shouldn’t waste their money.
#Preventative care. It’s often cheaper to treat people earlier rather than later — a stitch in time saves nine and all of that. If we are just going to pay for expensive, less effective, emergency room care later rather than let a person die or suffer severe consequences from lack of medical treatment, we might as well make sure the person has access to the up front preventative care. Paying more for less may satisfy our notions of fairness where we balk at someone getting a free ride until they suffer some real pain, but ultimately we seem to be wasting our money.
#Encouraging good diet and fitness. I have no idea what this would look like, but we ought to make eating right and exercising part of our culture. Paying out piles of good money for lazy, sedentary junk food eating smokers certainly offends my sense of fairness. But, for the reasons mentioned above with respect to preventative care, I don’t know what the rational alternative is if we aren’t going to simply let people die rather than paying for their emergency room care and the like when push comes to shove.
That’s about all I have time for on a Friday morning. That pretty much solves everything, right?
Update Health Care for America Now has a blog entry on what the GOP playbook looks like with respect to health care reform. Basically, it looks a lot like the 1993 playbook:
Luntz’s prescription for Republicans is to replay the 1993-1994 Republican playbook of attacking “government” health care: “government rationing care…Washington bureaucrats…government takeover…” You get the picture.
Only this time it won’t work. And the reason that Luntz’s recycled prescription won’t cure Republican’s political ailments is revealed in another one of Luntz’s remarks to the Republican House members: “…because the American people blame the insurance companies more than almost anybody else for why health care is such a mess in this country right now.”
. . .
Luntz’s focus on quality in understandable because where Republicans really lose is on Americans’ top concern about health care: cost. In exit polls after the election last November, people said their number one personal economic concern was health care costs. Our research shows that the fact most compelling to people is the following: health insurance premiums have gone up six times faster than wages in the past nine years. Asked about health care, the first thing volunteered is that “we are paying more and getting less.” People see health care taking a bigger chunk of their paychecks everyday. They are paying higher deductibles and co-pays themselves, and at the same time, they understand employers are being drained by the skyrocketing costs of health care too.
Pretty well covered the major issues. A part of all this is simply philosphy perhaps as much as actual health care. Point on “end of life” medical expenses. With current technology we can keep a cadaver somewhat alive. While giving up a loved one or the medical folks facing possible lawsuits concerning failure to do everything possible is difficult situation—there will have to be realistic point reached. We all pay for everything listed in your article.
Re: bureaucracy. As you point out, private insurance bureaucracy already is pretty unbelievable and makes it hard to think government bureaucracy could be any worse. At least, if there was just one (government) bureaucracy, you wouldn’t have to learn the ins & outs of a new, complex bureaucracy everytime you changed jobs & got a new health insurer, or your employer decides to change insurers, etc.
Disclaimer: The following observation is NOT a comment directed at the author of this blog in any way, shape or form, and should NOT be construed as such by anyone without the granting of express permission by myself, which you aren’t getting. Got it?
Drunk or sober, post-pubescent twenty-somethings seem to have all the answers for just about everything (no matter how old they are). Even the Governor seems to believe it.
Quite amusing.
This leaves out the single most important issue of them all: individual liberty.
The reason private insurance is preferable to what’s being proposed now is because if I would prefer to not participate in this risk pool, I’m free to do so.
A government-run plan would be much less odious if (a) the actual treatment facilities remained private, and (b) I were free to opt out of it, and not just a half-assed “oh, you can still pay out of your own pocket or buy private insurance if you want” but in totality, i.e. I wouldn’t be compelled to pay into it, either.
The radical, impossible to implement thought experiment plan – what would happen if you:
I. Make it illegal for an employer to offer medical insurance to employees.
II. Get the government out of the medical insurance / medical care businesses.
III. Establish the principle that you can have any health insurance and/or medical care that you can pay for. (No mandates on what policies MUST cover).
IV. Wait for rioting in the streets to end and dust to settle.
V. Observe what happens to life expectancies, mortality rates, and the economy.
Not a recommendation, by any means – but what do you think would happen?
I suspect you would find opaque policies that are mostly illusory in terms of what they actually cover. Healthy, young people could get reasonably priced health insurance. Older people or people with prior medical problems could not get insurance. People who developed problems while insured would be dumped from their policies immediately.
I don’t know what would happen as between doctor and patient. Maybe prices would become more transparent as health insurers played less of a role in the process. Still, if you have a major illness, in an unregulated market if you aren’t very rich, you’re probably screwed.
Perhaps I am missing an important point in the “individual liberty” point: in a sense we have that now whereby some people choose to forgo other things to have insurance (participate in the risk category) and others choose to not participate (voluntarily or in some cases truly do not have resources (point being sometimes it is a simple choice to use money otherwise) or because of existing condition no insurance company wants to take on the risk–point: whether it is a medical episode brought on by accident or whatever these people end up at a medical facility and their bill for services becomes a direct or indirect debt upon others. True personal freedom must not infringe upon my rights or pocket book. Kind of like the old: “Your right to swing your fist ends where my nose begins”.
So that Weber guy doesn’t need health insurance? Must be nice to have the resources to handle a little bout of, say, cancer out of pocket. Insurance premiums are the cost of living in civilized society. But I’m a closet socialist.
Good summary of what needs to happen Doug.
I have a couple more to suggest:
(1) Health care professionals should be well paid but current compensation levels are not sustainable. A major cost savings could be achieved by regulating health professional fees and compensation. In return the med professionals in the system would be immune to malpractice claims (the system as a whole would bear the risk).
(2) A US Gov’t health care bureaucracy would be cumbersome, no doubt, but we could immediately eliminate a whole bunch of fat-cat insurance types, their fancy office buildings, there McMansions, their seven car garages, their lobbyists, their off-shore tax havens and their duly purchased, err, I mean ‘elected’ officials. A bureaucracy of career government workers would almost certainly be cheaper.
Okay, call it socialism. We tried the whole rampant capitalism thing and it’s killing us.
“their bill for services becomes a direct or indirect debt upon others.”
The usual argument that leads to this is that “people who can’t pay their bills leads to higher costs for everyone.” But that’s absurd, because the rest of us are free to choose whether or not we use these health care facilities. We have a choice.
MartyL hit on an interesting point here:
I think this captures exactly why no one (in the middle) is listening when the conservatives scream SOCIALISM! As someone who has been very free-market in the past, I can’t say I disagree with this.
Except…a system where there is taxation, other forms of wealth redistribution, restrictions on how I may do business with others, and lots lots more can hardly be called “rampant capitalism.”
In fact, it is TOO MUCH government that is responsible for this situation.
I have some experience in the excellent German healthcare system and think that a system like theirs should at least be looked at. Unfortunately, I’m not an expert at how it works, but I know a few details.
Doctors do not work for the government; they are private just like they are here. Payment is primarily based on nonprofit health insurance companies (I believe that there are around 250 or so, plus some private companies). There is a certain minimum level of coverage that the insurers must provide. There is a scale of costs for services; I believe private insurance companies will sometimes pay more (expressed as a multiple of the list price – 1.5x to 3.0x the list price, as an example.
There are no exclusions for preexisting conditions.
Physicians are very well paid; it is one of the highest paying professions in Germany – but they are not as well paid as physicians here, especially at the top end. Medical school is free, however (although still difficult and time consuming).
There isn’t really anything like the malpractice system we have here, although our malpractice system is so expensive (although it’s really a small part of our healthcare system) *because* we don’t have universal coverage. I.e., most of the expense in a malpractice case goes to cover the cost of the victim’s future medical treatments…it’s not like the victim’s insurance will pay for this.
Note that having universal coverage could also affect the values of personal injury cases.
Sorry, Kurt, I always think of Andrew Ryan when you a making your point. If you do create a Rapture or Galt’s Gulch, please let me know.
However, I do agree that we are not, and never have been, a country of unrestrained capitalism. I also agree that Clinton-era policies of forcing Freddie and Fannie to buy loans that they should not have bought, just to get a higher percent of home ownership, is a big chunk of the problem.
To me, the problem is refusing to acknowledge when we are being socialistic. The example I complained about above was a failure, IMHO, because they tried to execute a socialist plan within a capitalist system. If they had just set out to do a federally funded plan to give home loans to only those that couldn’t afford them, we would have had less fallout than what they did.
Same holds true with health care. The worst thing they could do is to try some bastardized version of public-private health care because they don’t want it to look too socialist. I can think of many scenarios where the that would go very wrong, just like the housing issue.
I think Hobbes accurately described the life of the sovereign man: solitary, poor, nasty, brutish, and short.
We do not act or refrain from acting in a vacuum. Our actions have an impact on others. Infectious diseases, to take an example, link us together whether we will it or not.
MartyL–excellent points.
Currently “inability to get affordable malpractice insurance” is one of the checks, along with licensing boards, against serially bad doctors staying in business. But having both systems seems redundant. Have the licensing boards have enough authority, and get rid of malpractice premiums. Pool the risk, and pool the liability.
I like Indiana’s malpractice system, where frivolous claims often don’t survive the pretrial medical review. I do think Indiana’s malpractice award restrictions aren’t necessarily fair, although they do contain costs.
As far as compensation goes, I do imagine it would have to become more uniform across the industry, and lower. It would have to be somewhat tied to production, though. But that can be argued over and worked out.
“If you do create a Rapture or Galt’s Gulch, please let me know.”
That’s what I’m trying to do in America; the advocates of slavery and murder of the human spirit are simply making it harder than it should be, so I’m in the process of fighting them off.
“We do not act or refrain from acting in a vacuum. Our actions have an impact on others. Infectious diseases, to take an example, link us together whether we will it or not.”
We are free to choose with whom we associate.
“I think Hobbes accurately described the life of the sovereign man: solitary, poor, nasty, brutish, and short.”
Either your understanding of Hobbes or your understanding of my argument is saddeningly poor; I’m not sure which it is.
Interesting aside about Fannie and Freddie. The socialistic aspect of it was a problem. Then the fairly unfettered capitalism of the mortgage markets, with their credit swaps etc., made that original problem 30 times bigger. So what did we learn? Socialism and capitalism aren’t two great tastes that taste great together?
Doug –
Interesting that you seem to assume health care would be unregulated – I did not include that thought.
Also, contract law would still be in effect, and no one would be precluded from providing health care as a charitable act.
I do agree some people would wind up in a bad situation – but I can’t see any system where some people would not be in a bad situation.
The question is, how do we get the best overall health care and medical care (defining the first as what you do for yourself, largely)?
I do like the idea of pressing for a cultural shift so that we value taking care of ourselves more than we do now.
I don’t think we can change people’s decisions to either take care of their health or not.
If the desire to live longer isn’t there, do we really thing financial penalties will work?
I was grossly overweight for a long time. I knew it was unhealthy, I knew it was causing me to miss out on many things that a healthy person could do. Adding more costs wouldn’t have made change. Most of those costs wouldn’t be realized until years later, and I wanted the triple-cheese with bacon and mayo today.
I think the only thing you could do is exclude people that didn’t meet certain criteria unless they were showing active progress to address whatever unhealthy trait they had.
However, that is an unpopular thing to do, filled with many “sob stories” for Fox News or MSNBC to make their party of choice look bad.
Interesting observation that anyone can say that those who use services and do not pay does not cost the rest of us. a) doctors and other medical personnel have a fixed amount of income they need and more above that as “profit”, b) many medical facilities are tax supported, c) what medical facilities do not get from all patients those cost are passed on in insurance claims and for cash service—-point –any business can not just accept loss of income for materials and service without passing them on to every customers. So it does not matter the business and whether you have insurance or not you will pay for losses (non payment, thief, etc.) when you become a customer or tax payer (in some cases).
“So that Weber guy doesn’t need health insurance? Must be nice to have the resources to handle a little bout of, say, cancer out of pocket.”
Cheryl, please pay attention to what I actually said.
“Interesting observation that anyone can say that those who use services and do not pay does not cost the rest of us.”
Jack, you, too, would do well to pay attention to what I actually said and the argument to which I was responding there.
The reason so many appear comfortable with the idea of “government-run” health is because, as mentioned, the private bureaucracy is already unwieldy, and because there is no choice when it comes to health insurance. The choice is mainly whether you want one of the two or three, if you’re lucky, health plans that dominate your market, or nothing. (Indiana is relatively competitive — in the sense that in most of Alabama, the Blues plan controls 90 percent of the market.)
I think people are looking at this as a way to save Medicare, not just as a program for older people but a program younger people support. Right now you’re paying loads of money into a Medicare system hurtling toward insolvency. If you were paying those taxes (including the money you now pay for insurance that would be included in them) AND you were able to receive services NOW, then suddenly you aren’t quite as resentful toward Medicare.