Wednesday, August 12, 2009

My Position On The Healthcare Debate

A friend asked me what I thought about it. I didn't have a single link to give him, so I typed this up. Lazy slug that I am, I decided to re-use it, because it's blog-length and it covers quite a bit of ground.

My biases:

1. Single-payer is bad. Lived in Canada. Been there, done that. Great place if you aren't sick.
2. The government doesn't run things efficiently, as a rule, though there are a few exceptions.
3. The current system could use a major tune-up.
4. Freedom of choice and markets are better than government mandates.

What is difficult to discuss is the final bill, there are three House bills, and at least two Senate bills at last count. The deciding factor for me is the "public option" for healthcare financing. It is also the point of greatest contention between the Blue Dog caucus and the Progressive caucus in the Democratic party. The Blue Dogs have indicated that they won't vote for a bill with it, the Progressives won't vote for a bill without it, so basically there is a standoff. The fiscal conservatives' goal and the social progressives' goal during the August recess is to show one side or the other that they're wrong, and hopefully get one side or the other to change. The pattern of town hall meeting attendance is heavily on the (D) side, because really, this is an intraparty disagreement on the blue side of the House and Senate.

I've read parts of HB 3200, and the "death panel" stuff just isn't in there. What it sounds like to me is the authors encouraging doctors to get all their patients to discuss end-of-life issues, like, "If your heart stops, we can try to restart it with electrical shocks, drugs, both or neither. Which would you prefer?" Or, "If you have difficulty breathing and your heart stops, do you want to be put on a ventilator?" I think the goal is to get people to think about those kinds of things, in part because some people will say, "Just let me die" and then those folks are allowed to expire without spending six weeks in the ICU, on a vent and on dialysis and with 24/7 nursing care, running up a bill until they finally die -- like they probably would have six weeks earlier, without the cost. It's not unreasonable to point out that this sounds like they're trying to lower costs by letting people die sooner...because that's precisely what they're doing, IN ADDITION to making end-of-life choices easier on families because Grandpa has already decided that if his heart stops he doesn't want CPR or to be intubated or whatever.

The Healthcare Exchange sounds needlessly complex, as does all the bureaucratic apparatus that HB3200 calls for. It recreates on a national level all of the state insurance regulatory apparatus that already exists. Why does an employer HAVE to go through a federally-approved exchange? Why do private companies have to rejigger all their products to get everything on the same forms the government wants? It's just busywork, to do all the same things that people are already doing, and all of this could be done easier and cheaper by simply making a model base-level policy and saying "Everybody has to offer this. You can add more if you want." Then have one website where patients can go and compare prices, etc. If Orbitz can do this for airline flights, then it can be done for health insurance. I bet Google would give the government a server or three for free.

After seeing the careful and prudent management of Fannie Mae and Freddie Mac, I am not enthusiastic as to the likelihood of success of "Fannie Med", or whatever they end up calling the public option. The President has promised "If you have insurance you like, you get to keep it"...though this does not apply if your company figures it's easier to pay the 8% fine and leave you out on your own, or if the public option is cheaper and they decide to go for that. It will be hard to fathom how politically salable a public option will be unless it's priced below private market options, so in fact it seems likely that many people will end up losing the insurance they have and getting new insurance. The argument is that the government is not forcing them to change, but that's kind of specious to me.

The other things that are telling to me are the state-level public options that have been tried in the past:
TennCare (TN)
Keiki Child Care (HI)
Commonwealth Care (MA) and Dirigeo Choice (ME}

ALL of these universal coverage plans ended up costing taxpayers lots of money, even though they weren't supposed to do so. TennCare worked for a while but eventually was a nightmare for TN docs. The Hawaii plan only covered children, but what they found was that even parents with private health insurance were dropping coverage on their kids and taking the 'public option' at reduced cost. Commonwealth Care and Dirigeo are covered in the Union-Leader link. There is another example of people gaming the system in Massachusetts, spelled out in tooth-grinding detail in this article.

One can argue for the necessity or 'right' to health care (and I would dispute that it's a 'right', Constitutionally or otherwise, for me to have prior claim on the services of another and have the power of the state at my disposal to take it from them), but the dollars have to come from somewhere and the math doesn't lie. These types of plans invariably cost more than projected, and deliver fewer services. We're already bumping up against our new national debt ceiling of $12.5 trillion or so. What gets cut to pay for healthcare? How much bigger does the federal government need to be? How many more weeks will you be working to pay for this new program, and all the minions in office buildings in DC to run it?

The reason that the 'public option' will run into fiscal problems is that it's counting on cost savings from treating chronic conditions earlier and keeping down acute care costs over time. The problem is that, according to the CBO (who reviewed the literature), this doesn't work.

Democrats in support of the plan insist it will work, despite real-world evidence that it does not. If wishes were horses, etc. The other problem is that our current health system serves 290 million people. Adding the extra 45 million is increasing the number of patients by 15%, on a system that in some areas and in some places, is already having trouble serving the number of patient-customers it already has. The number of physicians and physician offices doesn't magically increase by 15% just because the bill has passed. Here in Longview, it's a six-month or more wait to get a well-woman visit with an OB/Gyn. You can just go ahead and extend that to six-and-a-half months, proportionately speaking.

If the 'public option' got $4-500 billion in seed money, and was a live-or-die option with no recourse to the federal government when it, like every plan before it, went broke, I would approve of the experiment. Shoot, we've poured almost that much money into AIG, GM and Chrysler with little to nothing to show for it. But the real goal of a public option for many of the advocates is not to go broke, it's to have the private insurers go broke trying to compete with it. For many people, single-payer is their goal. And if the day comes that the single-payer program replaces all other health coverage in the United States, then there will be cost decisions made that will end in something like (but not called) a "death panel". It won't be overt action, they won't administratively sentence your Dad to lethal injection for being too old. But there can be issues like failing to provide enough NICU beds, or not providing enough therapy centers for cancer patients.

These things DO result in deaths, it's one of the reasons the US leads the world in cancer survival rates for both men and women. All single-payer systems will get into cost overrun problems, or at least, every one that has been tried has done so far to this point in the Untied States. When that happens -- not when HB3200 passes, not when single-payer is introduced to "fix" the problems HB3200 created, but when money gets tight -- then the government will make decisions about rationing care. They have to, they're the only game in town under a single-payer system. People will object that healthcare services are currently rationed based on price. This is true, a discussion of this statement is here.

Finally (and if you've read this far, I admire both your patience and your endurance), there really are options to HB3200 and everything being considered now that are cheaper and will actually help the people who need helping. The bizarre thing about US health insurance is that it's tied to employment, an artifact of WW II and wage & price controls of the time. Insurance is tax-deductible for employers, but not employees, to the tune of $264 billion in what would otherwise be income tax collected on the equivalent in wages that is spent on health insurance. The smart thing to do IMO is to make that an individual tax deduction, refundable as a credit to low-income people on a sliding scale. If you want poor people to have insurance, then make sure they get the money the same way they get EITC checks when they file their taxes. For everyone else, your employer can pay you full wages (instead of wage=(full wage minus insurance)), and you can buy your health insurance the same way you buy your life insurance.

Make it so that people can buy insurance through groups if they want to, like association health plans (NRA, Texas Aggie Alumni Association, BBB, NASB, whatever), and buy across state lines to find better deals. If the government is going to do anything, specify a method of comparison of benefits and costs that all insurance plans have to meet, publish it on the Internet and put printed copies in every post office and library for people who don't have internet access.

The 85% of people who have health insurance will still have their health insurance, and you'll get the people in the 15% uninsured who need and want health insurance. The government can use its existing infrastructure (IRS) to get the money to people, at no additional cost other than a modification of the 1040 form. The government doesn't have to collect any more information than it has right now, on anyone. The government doesn't need to create a whole new fiscal risk to the budget, either.

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