The Republicans appear to find a laissez-faire economic system odious, since it doesn't give enough protection to the wealthy and powerful business interests that provide the backbone of their funding. The poor and the working classes generally don't vote Republican (or at least, traditionally they didn't), so there's less incentive to attend to their issues. The Republicans are for small government only to the extent that they give lip service to the fact that in the long run, government spending must equal government income, and they are loath to give the government much income. But enough Republican bashing... for now!
The arguments commonly made against subsidizing health care usually boil down to moral hazard, which is to say, people will consume more than they need if it doesn't cost them anything; and a philosophical objection to socialization. I can't address the philosophical objection, because it's a worldview thing. You may see the world through individualist eyes or as a communal place, you may be paternalistic or antiauthoritarian. The moral hazard issue, however, is what's been driving the opposition to universal coverage and winning the day, and it has some serious flaws.
Malcolm Gladwell outlined the issues of moral hazard in health carebetter than I ever could. In summary, it turns out that people don't like to go to the doctor if they're not sick, and even if healthcare is effectively free, overconsumption is unlikely. Underconsumption, on the other hand, is an issue with the present system, because the uninsured tend to miss out on preventative checkups and well-baby care and immunizations and dental hygiene, and that turns into very expensive issues with actual disease and disability that has high social costs.
That's not to say that there's not an issue with the healthcare we actually get in America costing too much. The fraction of the US economy devoted to healthcare has gone up much faster than any other over the last sixty years. Americans spend about one dollar in five on healthcare, Over a fifth of the cost of healthcare is in administration and paperwork, with something like 12% going to insurance company overhead (less than four percent is spent on overhead for Medicare, while Canada spends closer to two percent). However, the bigger issue is that there is little holding down what medical providers charge. If you're insured, then you've probably never thought about how much that visit to the doctor actually cost, over and above perhaps a token co-pay of ten or twenty bucks.
I have nifty insurance that doesn't include any co-pays for any normal preventative or needed care. I do get a statement afterward from the insurance company, though. It turns out an office visit is billed at $140 by my doctor, and the insurance company pays a "negotiated" amount around $90, and I'm covered for the rest. If I had no insurance, the steely ladies at the counter would be after me to pay the whole $140 right then and there. Remember the saying, "never pay retail?" It goes in spades for healthcare, or at least for the sort that your insurance company has a hand in paying for.
And yet, there's a kind of healthcare that my insurance company doesn't pay for at all, and as near as I can tell it's bucking the general trend by becoming both better and cheaper at the same time. Check your newspaper for ads touting "Lasik" treatments for vision correction. The price tag is prominently displayed right there, because you'll be paying it out of pocket. Opthalmologists with fancy equipment are competing for your business, and you're better off as a result.
At the same time, I see ads for where to have your baby. One hospital is touting their cushy "birthing center" and another is all about the quality of their doctors. No mention of the price, though, because delivery is one of those things that's usually covered by insurance. You won't be paying for the luxurious digs with a window with a view, the best trained obstetricians and nurses, or at least not directly, so why compete on price? I don't know, but I'd be willing to guess that these places are actually billing the insurance companies rather more for your enhanced perinatal experience, because they are driven by a profit motive and they're not getting the money from you. Otherwise, you might actually go to the regular hospital delivery room and pay $3000, instead of $5000 for the high-end experience, say, because you're busy while you're there with things that keep your mind off of what's out your window, if you even have one, and the difference isn't worth the money to you as long as your baby has a decent apgar score. Or maybe it is, and you're willing to pay, but how would you know?
I've found two excellent treatises on the issues and possible reforms in healthcare. One is from a well-known progressive economist, and one is from a well-known libertarian economist. I'll let you figure out which is which.
The Healthcare Crisis and What to Do About It by Paul Krugman and Robin Wells.
How to Cure Healthcare by Milton Friedman.
Krugman and Wells appear to have misidentified healthcare advances as the largest factor in the expansion of the fraction of the economy spent on healthcare, and appear to underappreciate the effects of third-party payment on rising costs. Friedman is still a little too attached to moral hazard. Both identify the historical accidents that have given rise to the current system, and how those are playing out. Both advocate an end to tax subsidies for employer-paid healthcare. Both would eliminate virtually the entire medical insurance industry in favor of a government-paid system of some kind.
Friedman proposes universal high deductible catastrophic care insurance provided by the government, and paying out of pocket for the rest of your healthcare needs, with Medicare and Medicaid replaced by a voucher system for the elderly and poor. There would be no moral hazard aspect to care you'd pay for out of pocket. This would also eliminate adverse selection, since all would be covered and all would pay taxes, presumably in the current somewhat progressive way, to pay for it. The poor who qualify for Medicaid would still get subsidized care. There would be no particular incentive for getting preventive care, and those with low incomes but not low enough to qualify for subsidies would probably continue to underconsume it. With this system, there would not be any of the monopsony power over pricing that you can get with a single-payer system for everyday healthcare or prescription drugs, but you would get it for the stuff that really runs up the bills, like heart-bypass operations or cancer care. On the other hand, you'd be more inclined to shop around, and like the Lasik outfits, you could expect to see some competition on price and quality for your business, and Consumer Reports-style ratings of hospitals and doctors would be popular. And in this system, the fraction of the economy devoted to healthcare would vary depending on how much people choose to consume.
Krugman and Wells propose universal coverage for all preventative and medically necessary care provided by the government, and ideally full socialization of the provision of that care as well - hospitals and clinics run by the government, with doctors in government employ, as in the Veterans Administration hospital system. Cosmetic and elective procedures could probably be purchased from the public system or from private providers, as in the British system. Once again adverse selection is eliminated, since all pay for the system through taxes and all are covered. Moral hazard is not a huge issue since it's tough to consume much more preventive and necessary care than you can use anyway, and preventive care and disease management are cost-effective when the provider is also the payer who reaps the benefits of lowered long-term costs. As a result, there would probably not be much underconsumption. Monopsony power, whether providers are private or public, would control pricing at every level and keep costs in line, but might lead to reduced incentives for medical or pharmaceutical research. No telling what choice you might have in medical providers with this system, or what reporting there might be on quality. And in this system, the fraction of the economy devoted to healthcare would basically be by government fiat, which could be too small and lead to delays and rationing a la Britain, or arguably too large as in France, leading to some gold-plating and other economic distortions.
Both systems have plusses and minuses, but both can be reasonably expected to be much less expensive and provide far broader coverage than our current hodge-podge. Think of it - more economical, and more humane! And no candidate is proposing anything remotely like these systems.
Pity.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment