Sunday, November 8, 2009

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

6 comments:

Gator said...

Interesting perspective comparing fire, police and other emergency services to healthcare Sam. I have a general "uneducated" distrust of government providing any new service for me but I can't recall questioning whether our police and fire departments would be better run by private enterprise. And in the same vein, I don't want to worry if my insurance is paid up if I have a medical emergency.

Beyond that, my concern becomes more strategic, framing this debate in the terms you mentioned briefly which is percentage of GDP. How about asking first how much of our GDP should private citizens control versus how much should our government control?

In business we budget first with what we have based on our best revenue guesses, (i.e. x% of revenue for marketing and sales). Why is it that we don't do that also within our own government?

The current administration has separated the economy from the healthcare budget. How about putting together a bill that outlines general spending percentages?

Sam Reaves said...

Private businesses have to budget because they can't mint money. A government that doesn't want to be constrained by budgets can always debase the currency. And they do.

Strategically, I favor as little government control of GDP as feasible. Some government will always be necessary. We need government to enforce laws against force, fraud and reckless behavior. And to provide a safety net, with strict conditions. Beyond that it's a slippery slope to greater and greater government capture of GDP. Somebody's got to play Grinch and say government can't do everything.

DavidK said...

Ask anyone living in poverty, slums, and tenements who their police officers are. They know. Their police officers are the old, washed-up cops, and the newest rookies on the department. They know that the ‘rich folk’ receive better law enforcement service because the best cops don’t work in the slums. Officers worth a damn work their way up the ladder and out of the hellholes they had to ‘make their bones’ in. Talented cops or ones with strong political connections work in the plush areas. Of course I am speaking in generalities here. There are always some exceptions. But overall, cops view their assigned beat as a tangible adornment of accomplishment.
And it continues in all arenas of law enforcement. The newest detectives go back to the neighborhoods they started out as rookie patrol cops in until they work their way back out again.
The same holds true for firemen.
We as a society cannot truthfully state that because law enforcement and fire services are government funded and controlled that all citizens receive equal service. Those who pay more taxes receive better service because of the caliber of personnel providing those services.
Walk into any emergency room. There are patients with non-emergency ailments waiting to see a doctor. It is because emergency rooms cannot turn away anyone seeking help. Two-week long colds of the uninsured receive “emergency” treatment at taxpayer expense. If they are told to see their doctor in a week for follow-up, one week later they are back in the emergency room. The true players already know how to play the game, and we have been paying for their medical care for decades. No one can tell me that national health care will change that, that it will reduce my paying for the medical care of others that I am already paying for. Most people simply are not aware that the uninsured receive medical care any time they want it. The uninsured don’t get to pick and choose their doctor is the only difference.
Will a national health care policy change the way I am treated? No. Examine Eastern Europe. A fifty given to the right person gets you into a room and in front of a doctor while the line ahead of you waits until you have been seen and slip out the back door. A hundred… you would think the patient owns the place. ‘Won’t happen here,’ you say. I submit to you that it already does and is happening. Ask to view the major contributor’s list at any hospital. I absolutely guarantee that the names on that list receive better, more personalized service at that facility than you or I will. And even those contributors receive different levels of “concern.” The lower contributors are greeted by supervisors. The half million dollar and up contributors get the top administrators visiting their rooms and ensuring the staff knows the patient’s importance to the facility.
I was the Police Chief of my community for several years. I thought I was having a heart attack; had all the symptoms. In the ER I was treated like a fragile flower and ended up in a private room with all the trimmings even though my insurance didn’t allow for it. The hospital itself picked up the tab not covered by my policy. When I asked ‘why?’ as my ‘heart attack’ was diagnosed as indigestion, the answer was ‘In case we were wrong we didn’t want the Chief of Police dying outside our hospital.’
Once again, those paying the most, or in positions of “importance,” will and do receive better service.
National health care reform will be beat to the death in discussion and I will continue paying for the health care of others no matter how it turns out in the end. And under my own insurance that I am bound to as if an indentured oarsman, I will continue paying my twenty-five dollar co-pay for which I receive ten minutes of the doctor’s time. Our clinic even has a timer on the computer on the desk so he knows when my ten minutes is up. Fact. I just don’t see how a nationalized system will change anything.

Gator said...

Private business operates no differently than you have detailed above except there is much less visibility to the public.

"VIP's" will always exist in any system we put in place and so will people that cheat the system.

David, are you really proposing that police and fire be privately contracted out?

I worry over both big government and big business and between the two I worry over big business more. Police and Fire, if turned over to private business, would only be turned over to businesses that were big enough to handle the contract which would probably boil down to probably just a few that would have guaranteed contracts that would ensure that there would be no competition, completely defeating the purpose.

Sam Reaves said...

The problem with private law enforcement emerged with that case in Pennsylvania where a judge was taking kickbacks to sentence kids to a privately run jail.
Law enforcement is one of the legitimate functions of government-- the use of force needs to be under public, democratic control. But as David points out, even in that case there will always be problems of institutional integrity. These can be managed only by untiring public vigilance-- a free press and reformist zeal.

DavidK said...

No. I am definitely not proposing privatized law enforcement.
I was merely commenting in regards to the arguement that was comparing law enforcement to health care and wanted to point out that law enforcement under government control is not perfect and that nationalized health care won't be perfect either.
Kind of a rotten apples to rotten oranges comparison I suppose it could be called.