Saturday, October 31, 2009

The Health Care Reform Debate In Perspective

As everyone paying attention has seen, I've done a lot of writing about health care. A lot of it has been in much the same vein as every other liberal-to-socialist blogger on the blogosphere: criticism and polemic on the debate itself. As I've noted before, there's a lack of excellent writing on the substance of the debate. I've decided to try to address the substance again, partially because new readers who find me 'more liberal than radical' may not have seen my earlier commentary on the substance of the debate and partially because I'm still not terribly satisfied with the final form health care reform is taking despite my pleasure that it looks like some basic problems will be addressed.

First and foremost is the substance of the reform actually being discussed in Congress. The right-wing advocates of market reform and the left-wing advocates of national health care policy have both been excluded from the debate. As I (and others) have said before, what is being debated in Congress now is insurance reform. Insurance reform is better than no reform at all. It certainly addresses the real problems of health care in America better than market reform as advocated by the right.

Those problems, which I have also written about before, are basically three-fold:

1.) High consumer costs generated by the inefficient pooling of costs in multiple payment pools. This means multiple partially funded systems of payment and no single fully-funded pool of shared costs. This is entirely opposite to the principle of shared cost. Whereas other insurance can survive this way because it covers against the unexpected, everyone will need medical care at some point in their lives. Thus the inefficiency of the cost-sharing method has a mushroom effect on consumer costs. When one adds to this the cut the insurance companies must take from the consumer to make a profit it only gets higher. So while medical costs really do rise as technology changes, the consumer costs created by our insurance system are the biggest cost problem.

2.) Access to proper care is restricted in a variety of ways. The uninsured frequently forego all but the most urgent care (which is much more expensive) for financial reasons. Insurance companies frequently make their customers jump through hoops to make full use of their benefits, or deny payment entirely if it suits them to do so. Medicaid is difficult to receive (indeed, many of the people who need it are ineligible because of the family requirements) and offers inferior service. Medicare and the Veterans Administration only serve specialized portions of the economy. Thus many people cannot afford to see a doctor, believe they cannot afford to see a doctor, or choose not to see a doctor because they prioritize other financial needs before medical care. Even when one has coverage, there is no guarantee the insurance company will provide full access to necessary care under the current system.

3.) The current health care system puts a tremendous burden on American business. The majority of people with insurance who are not covered by Medicare or Medicaid receive health insurance benefits through their workplace. This infringes their economic freedoms (because their benefits tie them to their job) and it also shifts much of the cost of health care onto the business sector as a de facto tax burden. This latter aspect is worth taking into account among the many problems with American economic policy. I'm no friend of corporate culture, as anyone who reads my stuff knows, but forcing the corporate sector to underwrite what most of the world considers a national issue and a government responsibility is... of questionable capitalist virtue.

The current health care reform proposals in Congress primarily address problem #2. They would require insurance companies to open access to more care to their customers and restrict them from simply dropping their customers or refusing to pay for a variety of reasons. This is a huge improvement not to be ignored. However, it is key to remember that the first and third problems with our current system are only addressed tangentially if at all.

The focus on costs is on medical costs, not consumer costs. While medical costs are a real issue, they are secondary. A better system for paying consumer costs would lower them dramatically without the need to focus on medical costs that can probably not be cut to the degree believed by the advocates of insurance reform. The creation of a competitive, national insurance exchange will probably lower consumer costs somewhat... but it is difficult to say how much and it is possible it won't have a real impact because of the increased standards of quality may keep consumer costs higher than desired. A competitive, robust public option might help to drive costs down somewhat... but it is again very difficult to say how much this will help the guy who already can't afford to buy private insurance.

The economic problem is ignored entirely. First (and perhaps worst) it is assumed that everyone with employer-paid insurance is happy with their coverage and that there is no need for reform of this market. My partner's experiences following surgery have shown, to me, the facts are very different. Employer-paid insurance is in much the same state as private insurance, whether the premiums are lower or not. The public option, as it stands now, would not be available to anyone receiving employer-paid insurance.

In addition, liberals appear to believe that corporations can and should foot the bill instead of government. They advocate increasing employer's responsibility to provide insurance to their employees and punitively taxing those who do not. This may serve the needs of PayGo, but it is aggravating rather than solving problem #3.

None of this is intended to suggest that the insurance reform being discussed in Congress is not better than our current situation. It is. Nor is it meant to rally opposition to said insurance reform. If nothing else can pass, insurance reform needs to pass.

It is meant to put the problem in its proper context and to instill an understanding that this reform is not the 'end' of health care reform. It is a first, shaky step in the right direction. The issues of consumer costs and economic burden will remain to be addressed, and the left must not forget that. We must continue to raise and address these issues to affect future policy debate as much as possible.

To put it more simply, we need massive reform and even the 'liberals' in Congress are not approaching the problem from a sufficiently radical direction. We should support them, but we should keep pushing in the wake of their success.


democommie said...

Thanks, Chris. I agree with your argumets. I also agree that no matter what happens we need to be unrelenting on our congress critters and hold their feet to the fire to make them continue to reform the health/insurance industries OR give us Single Payer.

The Eclectic Geek said...

Personally, my first choice would be a nation health care service along the lines of the Kaiser-Permanente model... my family has had Kaiser forever and while there are flaws that would have to be corrected in a national system, the model is very solid in combining excellent quality of care and freedom to change doctors at will within the system with accessibility and affordability. I've seen some Democrat types offer the VA as a model for an NHS, but I think Kaiser would be a better model. The VA is too flawed.

I think Single Payer is a good second choice.

My biggest frustration with liberals is the poor understanding many have of economics and their unwillingness to listen to the actual New Deal and Radical economists because of their desire to be 'fiscally responsible.'

Of course, my biggest frustration with conservatives is that they actually understand economics and repeat economic laws ad nauseam while totally failing to pay attention to them in practice.

JoeBama "Truth 101" Kelly said...

Have to disagree with your thought that conservatives understand economics ER. I've been blogging a long time, and although I admit this is 95% an undertaking for personal enjoyment, just as I suspect it is for most others, I have run across very few "conservatives" that actually understand economics on any level. Macro or micro.

They generally twist whatever results they want out of whatever data they have.

Supply side economics which conservatives defend as the most wonderful thing since the wheel was invented has done more to push our Nation into a perpetual third world debtor status than anything. Yet, the conservatives will continue to preach Reagan and market based solutions with little regulation and tax cuts for the wealthiest among us.

I admit responsibility to our Citizens and the stability of our government fiscally has been abrogated by both sides.

I'm not familiar with Kaiser-Permante. I'm a single payer guy myself. I'll get back to you after looking at your choice.

The Eclectic Geek said...

Let me put it another way then. Alleged conservative principles are based on a sound element of economics. Actual conservative practice of this day and age is far removed from Milton Friedman as it is from Adam Smith.

I don't mean to suggest that today's conservative symphony orchestra understands economics. However, the thinkers and movers do. Their fault is in applying those principles too religiously, rather than recognizing them as tendencies.

The biggest complaint against Kaiser-Permanente of which I am aware is the difficulty getting non-Kaiser hospitals to accept Kaiser as insurer because of Kaiser's notoriously tight-fisted out of network policies. Likewise, Kaiser hospitals and clinics don't like to accept other insurance than Kaiser. These are issues of corporate policy that would not even be possible in an NHS.

The freedom patients have in making health care decisions and in changing doctors is very convenient.

JoeBama "Truth 101" Kelly said...

So what you're advocating is a nationwide HMO. That sounds like single payer Chris.

The Milton Friedman thing can wait.

The Eclectic Geek said...

Strictly speaking, a 'single payer' system is a national insurance system with maintains multiple care providers.

A national health service is certainly 'single payer' in the literal sense. It's just that the term is generally used to describe a national system of payment rather than a national system of delivery.

Semantics, I know.

JoeBama "Truth 101" Kelly said...

Single payer as I've suggested still would breed competition for business among providers. The best providers get the most business. They would even be able to charge above what may be compenated by the single payer if the care was indeed better and the client was willing to pay the difference. This also provides business opportunities for supplemental insurers such as AFLAC.

Your delivery system makes good sense though. I'm not sure whcih way I think would be the better way yet. Thanks for bringing this up. Thought provoking stuff.

The Eclectic Geek said...

Well, I believe in a coherent delivery system because it is precisely the American system of delivery that is at fault. A 'government takeover of health care' such as I describe would also completely relieve the economic strain that our current system places on the business sector and lower consumer costs most efficiently while also guaranteeing the most efficient system of funding.

I do think you need to make it possible for people to pay for what they want if they don't want the public system... but I also think that it is important that everyone pays into the public system, period. It is a social problem that can only be solved by society as a whole.