Monday, July 23, 2007

Health insurance

I've been thinking about the concept of "health insurance" in America, and it seems to me that "insurance" is the wrong model. In the past, ordinary health care (which was mostly ineffective) was rather inexpensive as well. Back in the early 60's when I was a child, it cost $3 or $5 to see the doctor. Minimum wage was around $1, so this was 3 to 5 hours work for a very low-end worker. Nowadays, the co-pay is between $5 to $20, which is 1 to 4 hours pay for that same low-end worker. But insurance is paying quite a bit more. So even for ordinary doctors visits, most people feel the need for insurance.

And even more than doctors visits, many people, including me, need several prescription drugs to maintain their quality of life, whereas 40 years ago there were very few effective drugs for things like asthma (ask me how I know!)

So for many people, health expenses are not some imponderable possibility that might strike like a tornado or earthquake without warning. They are a predictable cost of living. And needing checkups and screening tests are not random events that may or may not occur. They are as inevitable as brushing your teeth.

I understand the libertarian/economic argument that one of the reasons health care costs have risen so fast is that the ordinary consumer is sheltered from feeling the full effect of them, and thus market pressures are somewhat absent. If you received food without paying for it item by item, but rather through some employer-paid benefit, and if it didn't matter whether you bought ground beef or sirloin steak as far as your own costs, then food prices would probably become unmanageable too.

But it does seem to me that the insurance model is misplaced. It made sense in a time when you could pay for a doctor visit and still pay your mortgage that month, and when insurance was for unexpected catastrophes such as cancer or a car accident. But most people who are insured these days are covered for all sorts of ordinary predictable expenses. And that means that the price of those predictable expenses are far higher than they would otherwise be, because billing the insurance and getting reimbursed are big expenses for doctors, which they must add to their prices (I remember when a doctor's wife could handle the bookkeeping and the cost of the visit was tossed in a drawer of $1 and $5 bills, to be simply counted up at the end of the week.) And the insurance companies must also make a profit.

So although some claim that governmental bureaucracies are inevitably wasteful and inefficient, I don't see how they could possibly be worse than medical costs that must build in a profit for the drug companies, the doctors' corporations, the insurance company, and the hospital. There are vast inefficiencies and tons of paperwork in coding and billing and processing payments and invoices that no one can understand. And it is a simple fact that Americans, by one means or another, manage to spend more per capita on health care costs than any other country, and yet not have any better results or even as good a life expectancy or infant mortality rate as countries spending less.

Also, or current "system" (if it even deserves the name), redistributes some of the costs of health care, but it does so very unevenly. Employers are expected to pick up a large share of insurance costs, but doing so makes them seem uncompetitive. Those companies that don't do their "fair share" of this unwritten agreement can cut their costs and pass them along to taxpayers (I'm thinking WalMart for example) but a company like Ford Motor has a long tradition of good benefits and so looks like a bad investment, since they are now stuck paying retiree benefits. Meanwhile Japanese and other carmakers don't have to add that to the cost of their cars, since it is already part of the tax burden shared by the entire country.

So I could ask the question like this: is health care expense more like a tornado, which might hit at random and from which you need to be protected, or is it more like public education, something that benefits everyone and which can be done effectively by spreading the costs across the entire community in order to make sure that no one goes without?

My conclusion is that it is an expense that will fall on almost everyone and which is vital to us as a community and a nation, and so the costs should be shared evenly. No company should be able to shift its share onto others, and no one should be denied coverage because they might need to use it!

If health care were provided to all at minimal cost and supported by taxes, there would be fewer millionaire CEOs and more middle-level government employees. People who wanted to start a business or quit their day job for something a bit risky would be able to do so with far less anxiety, and this alone might trigger a wave of creativity and entrepreneurship. Small employers would not be competing with larger employers or foreign companies on an uneven playing field. And since everyone would be covered, the idea that a pre-existing condition makes you uninsurable would come to a well-deserved end.

(It strikes me as criminal that insurance companies treat individuals who need insurance as if they were lone rangers--the insurance company is spreading the risk among the millions they insure, so why do they single the individual out and make them pay far more than if they were part of a "group.")

I don't see any reason why under a government run system, there couldn't also be private doctors for those who could pay, and for those who wanted things like face lifts or breast augmentation. I don't see how a not-for-profit system of covering everyone could cost more than one that also has to provide huge executive salaries, and advertising costs, and all sorts of clerical inefficiency, and dividends for shareholders. How could it? Do private colleges cost less than public ones? The idea that things done privately are cheaper is just a dogma put forth by conservatives, with no real evidence. Compare Blackwater to the Army and see which one costs more. The private companies pay their soldiers of fortune $100,000 a year. How can that be cheaper?

Could there be problems and bureaucracies to deal with? Sure, but there already are the same problems with insurers. And we leave working people with no means to pay their medical bills. And it's not like this has never been tried. Most developed countries already do this, and life has not fallen to sub-Saharan levels in Canada or England or Japan. The current system is a millstone around the neck of American productivity. It's time to create a real system of health care, not health insurance.


Non Sum said...

Does publicly provided health care gain better distribution to the general population in most nations that provide it than in the U.S.? Without a doubt. But, the U.S. non-system of mixed: private, governmentally (poorly) regulated, and partially provided, health care is the sort of comparitive that makes village witch doctors look great.

Yes, something surely needs to be done by way of finding a fix. But, is socialized medicine the only alternative? Is socialized medicine an unmitigated success? If it is, then why do I hear so many complaints about its quality, the long waits, and its ever expanding costs? Even the governmental providers themselves are complaining about the costs, and are increasingly making demands upon the private life-styles of its users, when they are considered to be too much of a health risk factor. Do we really want the government to regulate our health risk sins, adventurous life-styles, or our dietary choices?

If OTOH we forbid governmental intrusion in our private lives, then are we, as the ultimate financiers, willing to underwrite all health risk behavior, no matter how reckless?

I have no desire to pay for another's profligate behavior. Not anymore than I wish to regulate it, or to have mine regulated. Is personally inexpensive allopathic medicine (but collectively expensive) worth my giving up both independence in lifestyle, and/or personal wealth? I don't believe it is, nor should it be a necessary sacrifice. There must be other alternatives than what we have now, and what the Brits, Canadians, etc., have gotten themselves into.

My own personal take on the medical establishment is similar to smoking tobacco, i.e. expensive and overall dangerous to one's health. I've recently read statistics in support of the contention that iatrogenic illnesses are the leading cause of death in the US. Now, you're suggesting that I should chip into an enormous communal pot in order to maintain it? No thank you. I don't support capital punishment either, for the same reasons.

Eat an apple a day, exercise like mad, do whatever it takes to avoid doctors, and the overpriced diseased cesspools called 'hospitals,' at all possible costs. If these options don't interest you, then fine; it's your body, not mine. But, please do not ask me to help you pay for it.
Non Sum

tinythinker said...

A thought that hits me whenever I hear this debate:

I have never understood why it's OK to tax people to give "breaks" to companies to aid the economy, to build and repair roads to aid the infrastructure, to build and run schools to educate future generations of citizens, etc, and to call these things wise investments, yet then trot out the label "socialism" or "socialized" for investing in the health of citizens.