Dial 911 for health care?
The House of Representatives has passed its version of a health care reform bill, and it’s starting to look as if before too long we’ll get some kind of legislation that will transform the U.S. health care system.
I wish I had more confidence in the ability of the Congress to produce good policy, but I don’t. Given the way the legislative process operates, we are guaranteed to come up with something that, while it may increase the number of people insured, will almost certainly make the system more cumbersome and expensive. That may be better than the status quo, but then again it might not be.
The legislation will be cumbersome and expensive for two reasons: the Democrats’ preference for bureaucratic micro-management over sensible calibration of incentives, and the way legislation is produced, in which horse-trading and marker-calling play a larger role than sober policy analysis. Whatever comes out of Congress, it’s going to be ugly.
Will it solve the problem? That depends on what problem you’re talking about. We’ll probably wind up with more people covered by insurance. But I see nothing in the summaries I’ve read (not even our Congressional leaders have read the whole 2,000-page monstrosity) that will reduce the burdensome administrative costs of the system, which are the main reason we spend 16% of GDP on health care. We’ll continue to have a complex, jury-rigged mixed health-care system, and it will only get more expensive.
Maybe in a few years, when the staggering costs begin to focus minds, we’ll be ready for a new attempt at reform. Let’s hope at that point we’ll also be ready for some fresh thinking and a new approach.
The best discussion I’ve seen recently of the health care crisis was in
David Goldhill’s article on health care in the September issue of the Atlantic, together with readers’ reactions and Goldhill’s responses to them published in the November issue. Goldhill’s article analyzes the underlying reasons for the health care crisis, and suggests meaningful reforms.
The crux of his argument is that when patients do not directly bear the costs of medical care (because even routine care is covered by insurance), moral hazard is created, providers are insensitive to patient (i.e. consumer) concerns, and cost containment becomes impossible. Goldhill compares the current situation in health care to “paying for gas with our auto-insurance policy, or for our electric bills with our homeowners insurance” and details the distortions that follow from that. I don’t know of a better analysis of the real problems with the current system, which the currently debated legislation in Congress would do nothing to fix.
Of course, not everybody buys Goldhill’s argument. Among those who wrote responses to his article was Mike Mahoney of Sandpoint, Idaho, who said, “Throughout history, when societies have found that a service was needed for the common good, that service was created, and people chose to tax themselves to provide it. Armies, fire departments, water systems, police departments—all were created and paid for as the need arose. It makes no more sense to expect only those who can afford health care to have it than it would to make sure you have a valid credit card before dialing the fire department.”
That’s a pretty good statement of the case for state-provided health care. And proponents of a system like Britain’s National Health Service are right in saying that such a system would be administratively much simpler, reducing the amount of resources wasted on paperwork. Of course, there are other problems with government-provided health care, such as waiting lists and constant budget pressures. Any system has to ration care somehow, and in a single-provider or single-payer system it’s politicians and bureaucrats who decide how much gets spent on health care. And that brings a whole new set of problems.
But Mahoney’s letter got me to thinking: why do we accept without question government provision of police and fire services, while the thought of government-provided health care sends half the electorate into a Don’t Tread On Me frenzy?
Maybe it’s because the term health care covers a highly disparate variety of things, some of which are more suited to government provision than others. The reason why it makes no sense to make sure you have a valid credit card before dialing the fire department is because when your house is on fire, it’s an emergency: you need help right now, and your ability to pay is, or ought to be, irrelevant. The same goes for police protection and any other emergency service. We have recognized in our society that in an emergency it’s appropriate to help now and ask questions later.
Maybe it’s appropriate to make the same distinction in health care as we grope toward the right balance of public and private financing. Some medical needs are emergencies: you get hit by a bus, shot by a gang-banger or ambushed by your failing heart, and it’s inhuman to pester you with questions about payment as you bleed out on the gurney. Maybe in this realm government-provided (or paid-for) medical care makes sense, and Mahoney is right in saying that we ought to join other advanced nations in just providing it, no questions asked.
But other medical needs are more predictable and more subject to things under your control, such as diet and lifestyle, and are probably not best handled by third-party payment, for the reasons Goldhill discusses. Maybe you ought to pay for routine checkups the way you pay for an oil change on your car or maintenance on your furnace. Maybe even antibiotics for your fever ought to come out of your pocket, (or your privately financed insurance policy) the way body work after the fender bender does. Maybe the proper approach for most health care needs is to budget and save and carry private insurance for unexpected expenses. And for people who can’t afford that, there can always be a government-provided safety net.
In short, maybe there’s not a single best answer for all our health care problems, and a government role is appropriate for some medical needs and not for others. It’s worth considering as we wait for the latest spasm of tinkering from Congress to complicate the system, because the next round of reform is going to require some outside-the-box thinking.
Sam Reaves
www.samreaves.com


