Friday, February 19, 2010

Health Care Reform that isn't

There are a number of conceptual and semantic difficulties in discussing "health care reform" in the United States. First, we seem to have lost sight of the fact that the overall outcome we desire, is a healthier population. The current Democrat proposals do nothing to make us healthier and in fact could make us sicker, because they will decrease the wealth of the nation and there is a clear connection between living longer and being wealthier. Consider this equation:

Health Care Insurance ≠ Health Care ≠ Health.

Health care reform purports to increase the health of Americans by increasing health care insurance. But health care insurance is not actually insurance, does not increase care and does not make us healthy. How could this be? First, most insurance policies, like your auto insurance, only pay off rarely, and then with considerable deductibles and paperwork. Health insurance pays for every visit to the doctor, it is not really insurance at all, but a way to subsidize treatment costs. Subsidize? Yes, because the insurance you are using either has a favored tax treatment, if funded by your employer, or is directly funded by the government if you are using Medicare, the VA, Medicaid, etc. But we can't really call this insurance. True insurance would be look something like having to reach $5000 per year in out of pocket expenses before it would kick in. This is important because cost containment is never going to happen without politically unacceptable rationing, or getting the consumer involved through the magic of the free market.

But people won't get needed treatment, some will argue. I don't think so. The average person is the best judge of their need for treatment. But stupid people will spread disease by not getting their flu shots, the left will argue. Not when they are already priced at $5 to $30.

Second, health care insurance doesn't increase the care delivered, because of two factors. In the relentless pursuit of cutting costs through bureaucracy, health care insurance makes the doctor's visit more expensive, because of the added staff needed. Second, both private insurance and medicare and medicaid all seek to drive down costs. This has the effect of decreasing the supply of health care available as doctor's opt out of medicare or choose to retire earlier to avoid the bureaucratic pain.

Finally, health care treatment doesn't necessarily make us healthier. Yes, treatment is often needed, but healthier life styles are often far more important to good health. But we don't pay to keep people healthy, only for obtaining treatment, and further, through a system that only pays out when people get sick. What a perverse set of incentives. I'm not saying that people get sick on purpose, but these incentives can't help but encourage the overuse of resources and discourage preventive activity.

I consider my own behavior. I have learned from experience that no doctor is going to help me once I get a cold or the flu. These are viruses that just have to run their course. As a result, when I think I might be exposed, or I start to feel like I might be getting sick, I take action. I get more rest, I gargle, I use zinc and vitamin C. (I don't care if you say the zinc and C don't work, in my experience, they work for me.) I am not always fully successful, but I reduce how long I am sick or avoid it altogether.

Think how much simpler health care would be for all Americans if most visits to the doctor were on a cash basis. Doctor's visits would be involve less waiting, no pesky insurance forms to fill out. Doctor's fees would be lower, no need to hire so many accountants and staff to navigate the labyrinth of the billing process. If you thought you were approaching your catastrophic cap, you could ask the provider for a summary of your costs for the year. (I know this is possible, because I carry no dental insurance, but use a flexible spending account. If I get behind in my claims, the dentist's office helps me catch up.) Finally, you might start shopping around for care, the same way you shop around for a good plumber or mechanic, going on line and looking at doctor's ratings and fees. This would have the free market goodness of driving poor doctor's out of business and improving the performance of the merely mediocre.

What about that whole "increasing health" thing? Hey I'm in the Tea Party, can't we all just take a little responsibility for that ourselves?

Unless we reform health insurance, starting with medicare and medicaid, we will never make progress on building a better health care system in this country.


  1. Excellent post! Very well put.

    (how do you get the "does not equal sign on the keypad?) =/

  2. The not equal thing came from using the symbol function in Word, then doing a cut and paste.

  3. I don't really like to quibble all the time, honest, although it seems most of the time I have anything to say it is a quibble....

    I've had to make three claims on my POV-- one my fault, two not. (car was broken into)

    Grand total paperwork was a half-hour on the phone, most of that with the police department, and faxing in a copy of the police report. In one case, the mall did it for me.

    In the one that was over my insurance deductible, they mailed me a voucher for Best Buy to buy a new stereo and have it installed, as the wheel that was stolen was valued at the same as my deductible.

  4. (I do know I've done more paperwork for Kit than I did on the dang car!)

  5. If you factor in how long it takes to actually see the doctor, health care costs a ton. The last couple of visits I swear I sat around for an hour twiddling my thumbs and it infuriates me. I would gladly pay a premium for the doctor to see me right away. Anyway, great post and keep em up!