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.
