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Let’s Get Real About Health Care Reform

Submitted by WoodbridgeVa on Sat, 07/18/2009 - 17:58
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The more commentary I read on this subject the less credibility I give to the arguments presented on all sides. We need to cut through the myths, euphemisms etc and bring some reality into this discussion. 

1.      All finite goods and services, including health care, are rationed in one way or another; usually through price in markets, sometimes through government bureaucracy. I have a top of the line health care policy that covers almost everything but not all. My policy does not cover “executive” physicals and concierge care. If I could afford it, I would use these services. Statistically, my inability to access some of this cutting edge diagnostic technology will probably mean certain conditions will go undetected and shorten my life by 2 to 5 years. My access to health care is rationed by price and the bureaucrats at the insurance company. This is not wrong or evil. It is simply a fact of life and realistically there is nothing anyone can do to change it. Swapping out a government bureaucrat for an insurance company one is not going to improve the situation. Nor is it all that “unfair”. Yes the wealthy have access to better health care and always will. Implement a public plan and they will use private doctors. Follow the lead of some countries by prohibiting or severely discouraging private care and they will use medical facilities in Switzerland, Costa Rico and India. All that will have been accomplished is to once again squeeze the middle class who could afford private or supplemental insurance but not foreign hospitals. So yes, health reform critics are wrong when they imply that care is not rationed under the current system and advocates are equally wrong when they suggest that single payer plans will equalize everyone’s access. All in all, I like the current system. Contrary to mythology, it may be slightly cracked but it is not truly broken.
 
 
 
2.      Individuals with preexisting conditions are seeking charity not insurance. Insurance by definition involves paying a set amount of money to purchase protection against certain events with the expectation they probably will not occur but could be devastating if they do. A second but related model is to purchase protection for a known eventuality well in advance so the insurance company can invest the premiums and generate the funds to deal with the event when it occurs. The general idea is that most people will pay more in premiums or foregone investment income than they collect in benefits. That is what differentiates insurance from charity. Society may choose to cover the health care cost of individuals with pre-existing conditions but imposing that burden on insurance companies is unfair and unwise. In doing so, government provides an incentive for individuals, particularly the young and healthy, to defer paying for health insurance until they develop an insurable condition. It would be like allowing people to buy auto insurance after they had an accident. I would propose combining personal responsibility with compassion by providing a refundable tax credit (or better yet; an appropriated grant – we already have too many euphemisms in our tax code) to purchase health insurance, prohibiting insurance companies from dropping a person who develops an insurable condition, and establishing a government program to cover the medical costs of those without insurance but making clear the government will in turn put a lien on the individuals’ assets and income for an amount equal to the lesser of the cost of care or the total premiums the individual would have paid if they had obtained insurance in advance. Some people might make it from 18 to Medicare without paying a premium or medical bill. Others could lose their accumulated assets at age 63 and live out their lives in public housing on Social Security and food stamps. Most will buy insurance and avoid the risk.
 
 
 
3.      Paying for health care reform with savings Medicare and Medicaid is a shell game. President Clinton and the Republican Congress tried this in 1997. They reduced reimbursement rates to doctors, hospitals and nursing homes. Coincidentally, the size of the surpluses in subsequent years almost exactly matched the size of these reductions. When nursing homes started closing down, Congress got worried. When hospitals cut back on services, they became concerned. When doctors started turning away new Medicare patients, they returned reimbursement rates to previous levels. It was part of the out of control spending of the Bush administration and about 1.5 to 2 times what they spent on the war. Now President Obama proposes to repeat the same mistake. Government, or anyone else, can only control health care costs through some form of rationing. See point 1.
 
 
 
4.      Paying for health care with HSAs, or other personal savings plans is also a shell game. I am a 52 year old single male with an income of about $80 K. With luck and a few promotions, I’ll retire with an income north of $75 K. Not great but not bad either, about average. After paying taxes and putting 15 percent in a retirement account; there is barely enough left over to live comfortably, let alone put more into an HSA. And that is without the need to support children or put them through college. But even if I could and accumulated say $500 K, how long would it last? I saw the Medicare “this is not a bill” statements for my father’s stroke. They topped $2 million. I haven’t seen the similar statements for my mother’s lymphoma but she tells me she passed my father. And both of them survived, recovered and can look forward to even more expensive illnesses before the final one. The average person simply cannot save enough money to deal with the costs of a major medical condition, which they will have sooner or later unless they get hit by a bus that finishes the job less expensively.
 
 
 
5.      Comparing health care outcomes in the U.S. to other nations is almost always meaningless. Sick people on national health care can wait months for necessary tests and treatments in Canada and Great Britain. Sick people on Medicaid can wait just about the same length of time for similar treatment in the United States. Canada, and most European nations spend less on health care and their populations have longer healthier lives. The United States has an exponentially larger minority population than any of these countries. I have not examined all the data but I am reasonably confident that Americans of European descent have health care outcomes similar to their old world cousins and Americans of African and Hispanic descent have health care outcomes much better than those of Africa or Latin America.
 
 
 
6.      Traditional economic models become confused when applied to health care. Anyone who has had a prostate exam understands why they do not fit the price/demand supply curve very well. Conversely, individuals with cancer are not necessarily seeking the least expensive treatment. If Medicare had not been available, my family would have robbed banks to treat my mother’s lymphoma. Economic theories work a bit better when applied to diagnostic tests, cosmetic medication and some elective or semi-elective (drugs now or surgery later) treatments. But in the end, medicine tends to involve unpleasant tests, drugs with side effects and almost equally unpleasant physical therapy or surgery. It also involves staying alive and healthy. Most people would avoid medicine completely, regardless of cost, if they thought they could get away with it (worked well for me between 20 and 50). But most people are not willing to cut corners on health care they believe will extend the length or quality of their lives.
 
 
 
7.      Access to health care is not a right. Neither is access to food, clothing, shelter or education. I’ve read Ayn Rand and am not impressed. But she is correct about one thing. All truly valid rights are negative, granting permission to act, to refrain from acting and to be left alone to chose whether or not to act. A positive right is an oxymoron since it by necessity requires infringing on someone else’s negative rights to compel them to provide the goods or services necessary to service the positive right. Nevertheless, civilized nations have universally chosen to infringe on the rights of their citizens, particularly the more wealthy, to ensure at least a minimal level of the goods and services considered necessary to modern life are available to the overwhelming majority of their population. Individuals insisting on a perfect Randian “live free or die” existence are welcome to seek their paradise in less civilized areas. Antarctica is still available. Conversely, bleeding hearts should restrain their demands that society has an obligation to provide unlimited services to everyone who wants them. The fact that an individual will go blind from diabetes without medical care may compel enough sympathy to gain treatment; but it should not save their accumulated assets from confiscation to pay the bills if they have refused to obtain insurance when given the opportunity. See point 2.
 
 
 
 
In the end, the health care reform debate comes down to point 7. Health care by its very nature is expensive and there is no believable means for society to support these expenditures for the less wealthy majority of the population without infringing on the rights of the wealthy minority. That is an unfortunate fact of life. It is a fact that government will take assets from the wealthy for the same reason Willy Sutton robbed banks. It is where the money is. It is unfortunate because people have a right to be left alone to enjoy the fruits of their labor and pass them on to their heirs if they so desire. The goal of health care reform should be to strike an acceptable balance. Our nation does not intentionally allow children to grow into illiterate adults; but it also does not send every child through Harvard or Stanford. We are not going to allow people to die in the streets. We also are not going to buy everyone an annual ‘executive” physical. Idealistic egalitarian claptrap notwithstanding, individuals with the money to attend elite universities will probably have more lucrative careers, opportunities for travel and yes richer more fulfilling lives than those who do not. Similarly, individuals who can afford in house doctors, on site personal trainers and weeklong diagnostic stays the Mayo Clinic will live longer healthier lives than those that do not. Even if government follows the old Beatle adage to ‘tax the rich until there are no rich no more” it would only tear down without building up. Governments are formed among men to secure liberties, including property rights, not trample them into the dust. Conservatives should acknowledge there is no libertarian free market solution to this issue. Liberals should recognize the solutions they propose do severe damage to fundamental principals Jefferson propounded as the foundation of our nation. We should all be more willing to discuss realities rather than mythologies.

 

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Comments

People want access to healthcare.

Submitted by Mead50 on Sun, 07/19/2009 - 08:43.

You say "Individuals with preexisting conditions are seeking charity not insurance." Sorry, but you are just wrong. People with preeexisting conditions want access to health care.

I know someone who can't get coverage becasue he had kidney stones, which he passed naturally. Note that he is not being offered a policty with a rider excluding anything involving kidneys - he has been denied any coverage at all. I know this to be the case, I've been to his house and seen the letters he's received denying him coverage and stating the reason for the denials.

He's a self-employed carpenter. Under our current healthcare system, because he once had a minor problem with kidney stones, if he ever has a major problem - like a treatable cancer - he's a dead man.

Our health care system is extremely screwed up.

And, regarding you point #7 - access to education is a right.

And, regarding you point #7 - access to education is a right.

Submitted by WoodbridgeVa on Sun, 07/19/2009 - 09:28.

So the teacher has no right not to provide their services?  I have no right to object to paying the teachers salary?  The bookstore has no right to close for lack of profits?  How exactly can education be supported as a positive right (ie. government is required to provide it) without infringing on the negative rights (essentially the right to be left alone and secure in one's property) of other individuals.

As I noted, civilised nations have chosen to infringe on individuals' rights to obtain the resources necessary to provide certain goods and services.  I also noted that the die hard libertarians who objected were welcome to relocate.  Limitations and out right infringements on our rights are a price we pay for living in a civilised society.  But let's not kid ourselves about what we are doing or the price we pay for doing it.

In the end, access to food, clothing, shelter, education, medical care or any other product; that goes beyond what the individual can obtain using their own resources in a free market is a privilage, not a right.  Government expands or contract the scope of that privilege based on the ability and willingness of society to infringe on the property rights of the individuals who provide the resources necessary to support providing those services.  And when society uses the majority vote to go well beyond providing the basics, it descends into mob rule and has no more moral authority than if 20 people vote to rob a house and then seem surprised at the home owner's undemocratic response.

So, there are no public schools in Woodbridge VA?

Submitted by Mead50 on Sun, 07/19/2009 - 11:28.

I've never been to Virginia (I assume that is where you are from)....are you saying that there are no public schools there?

How exactly can education be supported as a positive right (ie. government is required to provide it) without infringing on the negative rights (essentially the right to be left alone and secure in one's property) of other individuals.

I guess in the same way it manages to provide police departments.

Public schools

Submitted by WoodbridgeVa on Sun, 07/19/2009 - 13:53.

Yes we have public schools.  The state of Virginia infringes on property rights by taking private assets and using them to fund the privelage provided to those who attend them.  A decision made by civilized governmentw which I support (see earlier comments).   The fact that government provides a service, including police protection, does not make it a right.   BTW, the Supreme Court supported that viewpoint in a ruling that citizens could not sue police departments for failure to enforcerestraining orders.  The court found that although such services may be commonly associated with government, citizens could not demand them by right. 

Actually edcucation is a good corralary to health care.  Most people recognize it is in the best interest of society to surrender a limited portion of their property rights to fund public schools but do not want to cede government the authority to sease an inordinate amount of private wealth to fund education for everyone at elite univiersities.  There is a focus on providing basic services from K thru 12 to the broadest group of students, more limited support for higher education and those who want special services such as private schools, post graduate degrees, elite universities etc, must provide most of the extra funding from their own resources.  Similarly, most people recognize the need to surrender a limited portion of their property rights to fund basic health care services.  They support a strong safety net of essential services targeted to the majority of the population, are willing to fund more limited services for special needs cases and believe those who want, and can afford, additional services should be free to seek them from the private sector in a free market.

My basic point is that government is an intermediary.  It cannot provide any goods or services without first appropriating private sector assets to fund those services.  When government appropriates resources it is, by definition, infringing on the owners property rights.  Consequently, the goods and services it provides are a privilage, not a right.

 

 

People with preeexisting conditions want access to health care.

Submitted by WoodbridgeVa on Sun, 07/19/2009 - 09:44.

And who do they expect to pay for it?

Insurance is a business product sold on the expectation that any random individual will, over their period covered by the policy, pay more in premiums or foregone investment income, than they collect in benefits.

When an individual walks in the door with a prexisting condition indicating a higher than normal probablility  of claims payment (kidney stones do not just appear from nowhere. There is an underlying cause, usually outside the kidneys.), the insurance company is faced with three choices:

1. Deny Coverage

2. Provide coverage at a risk adjusted premium that reflects the higher likelihood of a claim.   I do not think this is what you have in mind when you say access to health care.

3. Provide coverage at the normal rate and either absorb or passon the inevitable costs.  Dress it up any way you like, this is charity.  It may be worthwhile charity and it may be charity society should support through government but it is still charity.

The lies from the other side of health care

Submitted by Brittanicus on Sun, 07/19/2009 - 16:52.

It is a shame that some Americans are so gullible, to the outlandish propaganda and lies spat in the newspapers, television and radio about Obama’s health care agenda. They have demonized the British, Canadian and other worthy plans. Hidden under a disguise cover, these radical entities are determined to keep the special interest organizations in absolute power. Comprising of the money-draining profitable insurance companies and their rich stockholders. They don't want any changes to the broken system of medical care, because it will hurt the status quo. I was born in England, in the county of Sussex and until the inception of the European Union and the European Parliament dictating to Britain. That they must accept millions of foreign workers, the nations medical system was exemplary. I never had to wonder if I would have to file bankruptcy, to pay my medical bills, or listen to the incessant ring of debt collectors on the phone.


On several occasions I ended up in the cottage hospital and their was never a cost applied to it, never a ream of paperwork. Incidentally, I choose my own doctor where I Lived. The longest I waited for surgery was three months, as it was not an emergency. No doctor, no hospital or specialist asking  me for my Social Security number, drivers license or if I was covered by a predatory for-profit insurer. No premiums, no-cops and pre-existing condition clauses. Yes! Didn't have a private room, but who cares?  Today the British Isles is being submerged under a barrage of legal and illegal immigrants, who have never paid into the system, have caused some rationing. Prior to the importation of foreign labor my trips to doctor, to hospital, the eye or a dentist was paid from my taxation. Unless we pass a national health care agenda, Americans will never know what it's like to breeze through their lives, without worrying about paying for health care? Tell your Senators and Congressman you want an alternative to the--GET RICH-- insurance companies, before a Universal health care is killed. 202-224-312  REMEMBER THE INVESTORS AND STOCKHOLDERS DON'T WANT THEIR PIECE OF THE $$$TRILLION$$$ DOLLAR PIE DISTURBED. EVEN SOME POLITICIANS HAVE THEIR DIRTY FINGERS IN THE PIE?
AS AN ALTERNATIVE TO THE PRIVATE HEALTH CARE, A GOVERNMENT SINGLE PAYER SYSTEM WILL ASSIST IN REVITALIZING THE WILTING US ECONOMY.