Wednesday, February 01, 2006
Health Care: No Answers Here
Scott Kirwin asks: How is fire protection - a recognized public good today (it always wasn’t) - different than health care - which we currently do not recognize as a public good?
Here’s one difference: providing more fire protection will not cause more fires whereas providing more health protection will cause more people to regularly use that “free” benefit. That is, people won’t call to report fires just because they have protection, although people will go see a doctor more often for increasingly minor complaints the better their health coverage is.
The government isn’t--or shouldn’t be--in the business of simply providing benefits because it sounds like a good idea. Nationalized, universal health care would be so tremendously expensive that it would require a massive tax hike to fund--a tax hike that would stunt economic growth and would likely still fall short of the actual cost of the entitlement.
Here’s another difference: while pretty much all fires can cause a danger to the community at large, not all health issues are community issues. Your broken bone, your migraines, your non-communicable health issues aren’t my problem. Scott makes it sound like every health care issue is a public one when that simply isn’t true.
Is there a health care crisis? Yep. But proportionally America spends more on health care than it has at any time in history. The better coverage they have, the more often they go to the doctor, the more drugs they take, and the more expensive the technology they use to help diagnose problems. Shifting the cost from health care providers to the government won’t reduce that cost (in fact, it will drastically increase expenditures as each dollar filters through a massive bureaucracy) it will just put it on another part of the ledger.
Private companies will breath a sigh of relief because they will no longer have to deal with the constant health care cost increases. Until they see that extra tax hit them every quarter and each and every American sees that extra tax hit them with every paycheck.
So the crisis isn’t in the number of dollars spent on health care, the crisis is in consumer expectations on those dollars spent. Everyone thinks that they are entitled to their pills (no matter how much they cost companies to research and develop) for a five-dollar co-pay. Everyone thinks they are entitled to visit a highly educated and trained doctor for a co pay less than they are willing to spend on Jiffy Lube’s “Best” oil change.
These aren’t necessarily insurance issues. Pills are planned expenses and so are a lot of doctor visits. Your yearly check-up isn’t something you need to be insured against in the same way that your radiator coolant flush and transmission service aren’t things you need to be insured against. Yet no one is lobbying for nationalized car care insurance so that you never have to pay more than a $20 co pay whenever you rack up another 50,000 miles on the car.
I admit, health care is a more complex thing than car care and potentially wildly more expensive. That doesn’t magically make it the same kind of public interest as fire and police departments or a standing military. Our health care system is failing us precisely because we haven’t come to the right solution that balances the “insurance” aspect with the fact that planned expenses increase faster when people have no incentive to control costs.
Comments & Trackbacks
Well said.
If I can piggy back on your brilliant statement with something more clumsily expressed, I’d like to add that one of the results of good healthcare is an extended lifespan that consequently requires more medical care to maintain a good quality of life. The more successful our health care is, the more it will cost just for people living longer.
Health care should be personal, and insurance should only cover the catastrophic, and insurance rates should be based on risk behavior. If you have to choose between the internet and health care (as the welfare Mom in Seattle had to choose between paying for the internet or a cellphone with taxpayer money), so be it. People aren’t owed anything but an opportunity to improve.
While I agree with most of your post, I have to disagree that the current situation is a “crisis”. At times it rises to the status of a societal annoyance, and occasionally to a personal crisis. That’s not much different from a three-car wreck on the interstate, frankly.
Sometimes it sucks to be you (or me, or preferably that guy over there that neither of us has met), but that doesn’t create a societal obligation. (Well, maybe when it sucks to be me....)
Very well said. I have to say that you shouldn’t “poo-poo” your car maintenance metaphor. It is exactly the same thing except that it would cost more to declare your body a “total loss” than it would your car.
i.e. - I just wrote an estimate on a 2000 Ford Expedition that took a helluva lick on the left front tire. My estimate came up to around $8700.00. However, once I tore into the vehicle’s front end, I noticed some pretty severe frame damage that put the final total to $13,100.00. That happens to be about 2k more than the vehicle is worth. Whereas, if you go into the doctor with a migrane headache and they find out you have a brain lesion, they probably aren’t going to say “nope, your repairs will cost more than you’re worth.” Even though in some cases they probably should.
Don’t you think that insurance effects the cost adversly, as well? I mean, insurance is meant to help people afford a doctor. But haven’t insurance companies driven up the cost of health care so people couldn’t afford a doctor in the first place? If you pay your doctor bill with cash, as opposed to file it with an insurance company, you will more than likely pay less. Why is that? Speaking as one who deals with the insurance devils on a daily basis, I can tell you that you can never make money doing your business when dealing with an insurance company unless you are willing to do tons and tons of paperwork.
-Super
So the crisis isn’t in the number of dollars spent on health care, the crisis is in consumer expectations on those dollars spent.
Okay, I’m calling B.S. on this whole train of thinking. The cost isn’t necessarily in people expecting a lot for a little co-pay. Believe me when I tell you that a hospital will charge $15,000 for an outpatient surgery without blinking an eye because they can. That has nothing to do with my expectation for my money spent. And I’m still stuck with a $1,500 deductible payment. And I don’t have a choice because if the surgery isn’t done, somebody might die.
I’m also troubled by this sort of “life calculus” that creeps into the equation, with cracks like what “superhero” just said. “they probably aren’t going to say “nope, your repairs will cost more than you’re worth.” Even though in some cases they probably should.” That’s exactly the sort of thing that nationalized health care would likely cause.
I don’t know what the solution to the national health care crisis is (and yes, it is a crisis that is going to get worse, despite what Doug Sundseth says (and man I’m glad he isn’t my doctor or politician)). But I guess the rampant individualism that is libertarianism crops up particularly in this discussion, and creeps me out.
(/rant)
the biggest problem with healthcare is this:
An infinite number of dollars can extend anyone’s life for an infinite (but with rapidly diminishing returns) amount of time, and with a correspondingly lower quality of life.
Who decides how much of that infinite amount of money you actually get? And who decides what quality of life is worth it?
The first answer shouldn’t be decided by the individual who gets the benefit but doesn’t have to pay the total check. The second answere probably shouldn’t be decided by someone other than the individual (i.e., you may not want to live as a parapalegic amputee vegetable, but that doesn’t mean you can decide that for me, particularly if you just got a particularly large insurance settlement you don’t want to waste on a vegetable upon whom you’ve already placed a sizable life insurance policy).
But neither decision should be made by a government, or government individuals who decide tax rates and accept gifts (bribes) from lobbyists.
Gee, I hope my paranthetical statements didn’t obscure my point.
Bryan, what you’re talking about isn’t what I’m talking about. I thought I’d made that clear. Where I see my yearly check-up as being somewhat analogous to an oil change, unforeseen surgery is more like a car accident: the type of thing that you have insurance to handle.
I know precisely how expensive health care can be. Since I’ve been out of the military, I’ve been in the hospital twice. Neither time did I have insurance. Again, I know how expensive health care can be--I’ve paid those costs out of pocket. I also know that not every expense falls into the category of a true emergency or unforeseen event.
Consumer expectations are skewed because we’ve all been taught to believe that we shouldn’t have to pay the full value of our own health care--even the predictable, relatively low cost procedures. Health care “insurance” is nothing of the sort. Insurance is something that you purchase to protect you against big, nasty surprises; what we call insurance in this case is actually just a maintenance fee that has distorted the value, the demand, and the place of health care in our society. The more government subsidizes and regulates the industries that make up our health care system the more demand and value are distorted and the more health care grows as a portion of our national expenditures.
Again, I think there is a serious disconnect in consumer expectations of what health care coverage should be and how our health care dollars should be spent.
It would be hard to consider me a libertarian (although I did wrestle with whether I would quibble over the “crisis"--since I think that our crisis has been created largely out of that government-sponsored distortion of the market), and I do believe that the government should have a role in regulating the health care industry. Just a much smaller role. But, trust me on this one, libertarians would never claim me as one of their own.
As for life calculus, I understand your reservations, but I would note that if my slightly skewed analogy were followed a little further, I would have to ask: isn’t your life and health more important than your car? If a person is willing to spend a few thousand dollars a year to ensure that their car continues to run reliably, why wouldn’t they be willing to spend even more to ensure that their bodies continue to run reliably?
I’m actually a big fan of medical savings accounts for the same reason that I like personal retirement accounts--it allows a person to save for their own needs and it’s more reliable than government sponsored programs. What I don’t like is the same thing that I despise about Social Security: that I still have to put my money into failing systems instead of shuffling that money into my private accounts. For the money that the government takes for Social Security and the money that my employer pays on health care, could I personally find a way to insure myself in a way that makes more sense for my personal needs? It’s hard to answer that question since I don’t even know the numbers for me, but I do believe that a case could be made that if consumers were given both more responsibility and more options, the market distortion would be relieved and cost for care would decline.
Now, that said, I’m very obviously not an economist, so I have to trust others with far more insight and knowledge than I have. But blind calls from my fellow-citizens for nationalized health care deserves some push back before it becomes received wisdom and people stop searching for other, better answers.
If a person is willing to spend a few thousand dollars a year to ensure that their car continues to run reliably, why wouldn’t they be willing to spend even more to ensure that their bodies continue to run reliably?
You obviously haven’t visited my neighborhood.
Seriously, I’m conflating several arguments here. Obviously, I know you aren’t a total libertarian (I was speaking about others in this thread and the one at Dean’s World).
I think it would be easier for people to pay for basic health care if the costs weren’t so high. I’ve got three kids. One trip to the doctor for an ear infection or some such relatively minor thing costs the insurance company over $100 or so, plus the outrageous price of the pills to cure the infection. Now, if I were having to shell out that $100 every time my kid had to go to the doctor, do you think they’d be going? When you’re living on a monthly budget? We’d probably be eating poor, but there are a whole lot of people out there who wouldn’t go to the doctor because of that $100-plus hit. That puts a perverse incentive for them to postpone going until something serious (like the infection reaching the brain, or a cut becoming tetanus or something) occurs. And then the cost REALLY goes up.
Also, this: For the money that the government takes for Social Security and the money that my employer pays on health care, could I personally find a way to insure myself in a way that makes more sense for my personal needs?
Sure. The mennonites (?) have a plan called the “brotherhood” or some such, and there’s a shared cost among the members. If someone gets sick, everyone contributes a bit to the total and it gets paid. Or something like that. It’s supposedly a very efficient system for their community.
But the real problem is it’s not just about you. Yeah, you could come up with something better. But how many times have you put up something on this blog about a crappy parent who didn’t take care of their kids? Is that the kids’ fault? Hell no. But the kid pays. And the kid will pay (is paying) for the type of system you’d be advocating. Rich and poor.