Whither Government Medical Insurance?

I consider myself a politically conservative guy. Yes, I’m rather upset at the conservative movement right now. But that’s because it seems more about inner loyalty than any kind of expansion of the movement. That is people preach to the choir and look for dissent rather than making compelling arguments that will bring more people into the movement. The level of argument is often pretty frightening in its superficiality at the moment.

Case in point: medical insurance.

I think everyone recognizes that the medical system in America is a mess. It seems to me that there are several reasons for this.

1. bureaucratic messes. From the very odd way hospitals and insurance bill each other to the ridiculous paper overhead to the non-standardized forms. There’s a lot of unnecessary overhead.

2. expensive treatments with little payback. A lot of recent technology does improve things, but at a high cost with only slight improvements. Yet people don’t want to get into cost/benefit analysis. So you end up with some very odd, and perhaps counterproductive ways of insurance companies limiting coverage.

3. subsidizing the rest of the world. Yes the rest of the world has cheaper medicine. That’s partially because most of the R&D is done by the US and even European drug companies count on making their profits in the US. This means that (as with a lot else) Canada, Europe and other nations get cheaper care on the back of American consumers.

4. the uninsured. Have a pre-existing condition? You’re screwed. Don’t belong to a large group? You’re screwed. Change jobs? Yeah. You know it.

I could go on enumerating the problems. I won’t bother.

What I don’t understand is the conservative (and religious) reaction to all this. Beyond silly talk about “socialism” (are interstate highways socialist?) there is a sense in which medical care is an individual responsibility. But I’ve never seen people really make the case for this. Why is medical care taboo for government but not police, fire departments, roads, garbage collection, and so forth. All of which are handled on a community basis. Could someone make a coherent argument here?

The problem is that by denying the medical debate on real grounds, by throwing out silly and misleading arguments, conservatives allow Democrats to frame and ultimately control the issue. When conservatives do tend to do something (say Bush’s prescription drug program) it’s handled poorly and ends up being expensive.

One hope I had to Mitch Romney was his approach to health care. Even if his state didn’t turn out as well as was hoped, it seems to be the most successful attempt in the country.

Anyway, this may be the one place I as a conservative break with many Republicans. (Well, global warming too) I think that the government needs to

a. start doing cost/benefit rationing on medicare in line with what most European countries do.
b. expand medicare to the uninsured children
c. standardize insurance forms and billing for the country
d. make rejection for pre-existing conditions illegal
e. allow the upper lower class and lower middle class to buy into medicare with tiered premiums and deductions
f. get rid of hidden taxes on hospitals that medicare imposes by paying less than cost

Thoughts?

104 thoughts on “Whither Government Medical Insurance?

  1. I like your thinking. Change is coming in this area. The debate should not be about whether we change it, but how. The more in the debate the better..

  2. BTW, I think that this in many ways what Thatcher and others did in the UK. They argued for conservative government health care,rather than arguing to do away with it.

  3. Conservatives do have a plan to reform health care, and it is based around the idea of turning it back into a consumer driven free market instead of the inefficient and frustrating largely employer oriented system it is now.

    The number one thing need for that to happen is to transfer the tax incentives for health care from the employer side to the individual. That levels the playing field so that employer provided health care survives on its own merits rather than the enormously unnatural preference it is given today.

    As it is, employers stand in the place of the government and have and extraordinary incentive to meddle with their employees health care, largely because they are the ones writing the check. Employees don’t really care if the $8K-$12K per employee cost rises at 8% every year, because they are rarely aware of the fact in the first place, nor often appreciate that employee health benefits are part of total compensation that would otherwise simply be part of their salary, nor appreciate that the health insurance deduction on their paychecks are typically small relative to the total cost.

    a. If anyone is going to do the rationing and make the cost/value tradeoffs, it should be the individuals themselves, not the government, not their employers, etc.

    b. We already have Medicare for children in poor families. It is called Medicaid. Families above the poverty line should probably be required to purchase low cost high deductible health insurance plans to cover unmanageable catastrophic expenses.

    c. Using health care insurance to provide ordinary everyday medical expenses (low cost prescriptions, doctor visits, etc) is a net loss for the consumer, typically two unnecessary layers of bureaucracy and interference. If heath care insurance was used primarily to cover unexpected expenses of the sort which actually need to be insured, this issue would largely disappear. Does anyone buy insurance to cover gasoline for their car? Or semi-yearly trips to the local Jiffy Lube? Why is that?

    d. Making rejection for pre-existing conditions illegal would work as long as everyone was required to purchase comparable health care insurance all the time. Otherwise people just wait until something sufficiently bad happens to them, and then they sign up. Insurance is designed to insure against things that *haven’t* happened yet. If you have an auto accident, do you think it is going to be covered by insurance that you didn’t have at the time? Why is that?

    e. If the currently non-covered individuals concerned were willing to pay the full cost of such coverage, that would be fine. But why would anyone want to?

    f. This is hardly going to improve if we put the whole population on Medicare. In fact it will get much worse, due to cost/free rider considerations.

  4. I really don’t buy argument that highways, public services are same as government bureaucracy running my health care. If I don’t like the latest bureaucrat employment program expansion, named health care as an after thought, where will I go for alternatives? That the government won’t tax or hobble with mandates? I don’t trust big gov’s track record with SS, medicare, mortgage meltdown meddling, and other dysfunctional inducing policies that seem to inflict industries in competition with them (but that they just happen to regulate, mandate, and red tape to death). Free market competition. More options. And the way I hear big government is going to “pay” for this is not assuring. Basically taxes, taxes, taxes.

  5. It’s good to hear real thoughts about this coming from a conservative. To be honest, this is one of the main reasons I no longer call myself conservative, and often vote for the other side. (Other reasons include my perspective on global warming, evolution, and, more recently, how eager we are to go to war). More thoughtful discussions and ideas like this could help me change sides in the political debate.
    I agree the dumbest way to do medical insurance is the way it’s being done right now. It’s going to change, and it needs to change in a major way.
    I worked in the medical field, and I saw far too many people get expensive treatment they didn’t need. We’re all paying for that.
    Someone on the cost side of things needs to care about the patient’s overall health. With how often most of us change jobs, and therefore insurance companies, I don’t think insurance companies care much about our long-term health–because, chances are, some other insurance company will end up with the tab. Doctors certainly don’t, as they get paid not based on success or our health, but on how many procedures they do.
    I’m not sure of the best way to fix it. There is no shame in looking elsewhere for ideas (in fact, not looking elsewhere for ideas would be stupid). Ultimately, though, the US has different needs than other countries, and will no doubt build a different model than found anywhere else. I hope both conservatives and liberals have a part in the fix.

  6. Clark, I think Mark D above pretty much outlined my thoughts on this issue in comment #3. With all due respect, I think you need to go back to the drawing board and give it some more thought. There are some ways that the free market does not work in health care (it is different than other services in the sense that people will pay nearly unlimited amounts of money because if they don’t get treatment they will die), but there are many areas where the concentration needs to be on consumer choice, not greater government involvement.

    Anybody who thinks the government can do a better job on health care than they themselves can should go to the DMV and, while they are waiting, say over and over again, “every doctor’s visit will be like a trip to the DMV once government takes over health care.”

  7. Clark, one more comment and then I’ll go away. This post calls for a lot more government involvement in health insurance. Unlike many commenters on blogs, you have run a business and have some understanding of revenue vs. cost. So, bottom line: who’s going to pay for this new health care entitlement, especially during a recession when government revenues are falling?

  8. Of course malpractice also plays into the high cost of medical care in the US. The steep insurance premiums are part of the cost that patients pay, and providers order more tests in self-defense.

  9. Chris, I think Thatcher gave England the worst of both worlds. It really is a badly organized, badly funded and badly regulated system. Probably the worst of all the main approaches to universal coverage. I’m a big Thatcher fan overall, but England would be the last place to which I’d look for good care. I think better models are Germany and Australia.

    Mark, the problem is the big gap between care for the very poor and the middle class. This conservative approach just ignores that fundamental problem. Secondly the conservatives promoting an individual vs. employer care system don’t seem willing to make the extensive regulatory changes that would be necessary for it to work.

    Medicare handles only the very poor. The problem are the children of people too rich to be on medicare but too poor to afford individual coverage.

    The idea that insurance should only be for catastrophic problems ignore the cost benefits of early detection and treatment. It’s undeniable that if you make early detection overly expensive that people just won’t go for those visits. That increases the cost. This is the one approach of conservative critics that I just don’t quite understand. It’s better to limit catastrophic insurance and pay for more preventive care.

    As for having the individual do rationing, that’s fine. But for an insurance program that makes no sense. Once again let’s take the classic example. An 88 year old person who with $2 million of care gets an extra six months of life with questionable quality of life. How do you fund catastrophic care but not preventative care while simultaneously leaving the decision up to the individual? This makes no sense to me. It appears to be having ones cake and eating it too. The place where the tradeoffs need to be made is precisely the place where the insurer and not insured needs to make it.

    Now if the insured wants to get additional insurance of some sort to cover that, I have no problem. And that is where competition needs to happen.

  10. Frank, any service obviously has a cost regardless of who runs it. If I want electricity (a government controlled monopoly) I have to pay to cost. Roads are built and there is a tax. I don’t quite understand why it’s fine if it is a private cost but not if it is a government cost. Don’t get me wrong, I’m all for as small a government as possible. But I think somethings need be done by the government.

    As for competition, the problem is that there really isn’t competition for certain groups. Everyone wants the profitable side of things. It’s the unprofitable ones (i.e. the poor) that no one wants. In a sense the government is the insurer of last resort. It has always been that way. Now if some conservatives want to stake out a coherent position and say that the government shouldn’t do any insurance: no bank insurance, no natural disaster insurance etc. that’s fine. I’ll give Libertarians credit. Many do adopt such a coherent position. Where I have a problem is with conservatives who want some government insurance for things like Katrina or bank melt downs but not for others without providing any rational defense of the distinctions.

    Geoff, I don’t know about your DMV, but the ones I’ve gone to I’m in and out in 5 minutes. The problem is that just because some government programs are run poorly it doesn’t logically follow that all are. Maybe if instead of just lambasting government we tried to make it run well we’d do better. i.e. instead of just breaking out the DMV canard we ask how we could make DMVs more efficient. There are lots of methods and Utah in particular has done a good job there.

    As I said I’m for small government. The big failure of the conservative movement of the last 20 years is that it confused small government with poor government. Had it focused on how to run government in a small robust and efficient way then I suspect we’d not be out of power. The issue is ultimately that some things can only be done by government and if that is the case then we ought make those aspects run efficiently.

    As for payment, most of what I outlined are merely legal changes and standardization (i.e. of forms) That’s simply not expensive to the government. As for expanding medicare that’ll cost money obviously. But the way you handle that is the way you do with any insurance. You charge premiums.

    Naismith, I think malpractice is a big problem. And I think liberals are naive about how tied to medical access that is. It’s true that if medical treatments were more accessible there would be less need to sue in the same fashion. However it seems undeniable that our country is a litigious one socially unlike Europe or Canada. Medical insurance wouldn’t change that. I think that if there were widerspread health insurance that then one could better justify stronger malpractice reforms.

  11. [Medicaid] handles only the very poor. The problem are the children of people too rich to be on [Medicaid] but too poor to afford individual coverage.

    The idea that individual coverage is unaffordable is misleading. Of course extensive bells and whistles coverage is unaffordable. Working class people can’t afford to live in mansions on the hill either. What they can afford are high deductible health insurance plans to cover catastrophic expenses while using part of their regular income to pay for regular expenses. Same goes for most middle class families.

    One of the basic problems we have in America is that we have established a high standard for health care that few would pay for if they had to foot the bill themselves. The equivalent would be saying that every family deserves to live in a 5000 square foot house with a backyard and a swimming pool, and we are going to tax everybody sufficiently to make that happen.

    Working class and many middle class families don’t buy ordinary health care plans because the cost/value tradeoff is artificially distorted in favor of tax subsidized care for the upper middle class. There is absolutely nothing wrong with people paying for ordinary and regular expenses out of their own pocket. It is by far the most effective and economically efficient way to do it.

    What we need is a way to get everyone to purchase catastrophic health insurance instead of trying to extended zero deductible anything goes health coverage to the whole population at taxpayer expense. That isn’t economically feasible any more than government provided 5000 square foot homes with backyards and swimming pools are.

    (BTW, there already is a federal health care program for children above the poverty line. It is called CHIP.)

  12. Clark,

    I would likely use France as my model of choice. I was just using Thatcher as one example. Australian and Germany have had plenty of conservative governments over the years. They wouldn’t dare threaten to take a “market” approach.

    For any of this to work, there would need to be some control of prices. While some might rail against this, it is how these other countries have made there systems work.

    Mark, I am impressed by your articulate argument.

  13. Mark,

    Conservatives do have a plan to reform health care, and it is based around the idea of turning it back into a consumer driven free market instead of the inefficient and frustrating largely employer oriented system it is now.

    Turning it back? When was it EVER what you consider it to have been? Isn’t the current model a “consumer driven free market” system? I mean, the only piece of health care that I can see government run is Medicare, and that is mostly for the elderly and disabled. When I finished college, and went off to drive buses in Alaska, I had no insurance. The government had no option for me, and my employer had no option for me. If I wanted insurance at the time, I had two choices. Pay for it myself out of my pocket, or have no insurance. I had no insurance. This is what a free market health industry looks like. Those who can afford insurance get it. Those who don’t don’t.

    Maybe, just maybe, on some areas, free market just simply does not work for the whole population. Say, military protection, for one. If we allowed the free market to guide the use of military, those who could pay for military protection would get it. Those who don’t don’t. Say, the use of highways. Those who could pay for the use of highways would get to use them. Those who don’t don’t. Say the use of sanitation. Those who could pay for sanitation would get it. Those who don’t don’t. Education. Those who can pay for it get educated. Those who don’t don’t. THAT’S capitalism. Works well for the rich. Not so well for everyone else.

  14. Geoff,

    So, bottom line: who’s going to pay for this new health care entitlement, especially during a recession when government revenues are falling?

    Rich tax payers of course. Thus it always was and thus it always will be.

  15. “Isn’t the current model a “consumer driven free market” system?”

    No it is a corporate-bureaucratic model and Mark does not think the the government-bureaucratic model. While I a more democratic (small-d) appoach, Mark is not defending the current system, but instead arguing for a different, less insurance-centric, approach.

    Now, I am a socialist. But even Karl Marx (not my form of socialist) had a certain respect for the complexities of capitalist society. Over-simplifying the matter benefits nobody.

  16. Chris,

    What is the difference between a “corporate-bureaucratic model” and a “consumer driven free market” system? How do you avoid it turning into exactly what it is today, a “corporate-bureaucratic model” without government intervention? Can you see why I don’t see much of a difference between the two? The current system is consumer driven, not government mandated. That corporations chose to take over and offer insurance as part of their pay to their employees is just a part of it all.

    And as far as my rich taxpayer comment, I am not sure what you are confused about. Geoff asks who will pay for new health care entitlement that is government run. As poor taxpayers don’t have enough to fork over to pay for a new system, the only two options the government has are 1. raise taxes on the rich, 2. borrow heavily from banks and other governments. As I don’t see how the second option is sustainable, the only option is to raise the taxes on the wealthy. This is how it was done in the past. For example, during the Eisenhower administration, the tax rate on the richest Americans was 90% (which is why I always find it odd that the rich today get so heated over increasing their tax rate from 34% to 39%—spoiled, man, spoiled).

  17. Mark D, thanks for your comment #11. Our entire problem with health care started when we encouraged companies to pay for it and to get tax breaks for doing so, rather than shifting the burden onto individual consumers. As I think you have said, a company paying for health insurance is kind of like paying for gas so people can get to work or paying people for their clothes that they can wear at work. Well, most people don’t expect to be paid for their gas driving to and from work (nor should they expect it). Now, some companies may decide as a perk to offer company cars and offer to reiumburse employees for train or bus fare or parking, but it is perk, not something you should expect.

    So, when Truman (yes, it started with one of my favorite Democrats of all time) decided to encourage companies to pay for this perk, it set off a chain of distortions to the marketplace that we are suffering from today. I have known dozens of employees who go to the doctor every week or so because to them it is FREE. But of course it is not free. The doctor bills the insurance company, who has to raise rates on other people to pay the doctor’s bills.

    Instead, if everybody had catastrophic health insurance and paid for their own expenses out of pocket, these people would not spend all of their time at the doctor’s office anymore. And, they would bargain with their doctors over costs. “How much do you charge for an examination?” “How much are those x-rays?” “Are those tests really necessary?” These are the types of questions that patients should be asking their doctors, but don’t because everything is FREE (meaning covered by insurance).

    So, the solution, as I say above, is more individual responsibility, not another entitlement that involves people abdicating responsibility to the government. Sorry, Clark, I don’t agree with you on this post.

  18. Dan,

    Your analogies fail. You’re confusing what individuals can do with what only the populace as whole can do. An individual cannot build and maintain an interstate HWY by himself, for instance. But he can purchase, insure, and maintain a vehicle that he would drive on that HWY.

  19. Mark, CHiP was opposed by Bush and many conservatives, as I’m sure you know. The problem is though that there are many not covered by it. i.e. children through no fault of their own uncovered by medical care.

    Further your argument depends upon medical insurance only being for the catastrophic and ignores the issue of preventive care. i.e. such a scheme merely makes things more expensive since under it more people need the catastrophic care. It effectively does nothing about current problems since anyone with a catastrophic problem could merely declare bankruptcy and go under medicare right now. It’s that move which is so typical of many conservatives that bothers me. What is the argument for justifying no care? And do you really think it will be persuasive to many?

    You also avoid the central problem by talking about what the middle class and upper class expect for medical care. The fundamental issue is what we have a responsibility to ensure that everyone – especially children – need.

    As for payment I’d advocate a flat tax on everyone so that the poor have an investment in it. I strongly disagree with the “tax the rich” mentality. I also think consumption taxes related to health care would be wise.

    Geoff, I agree that the tax benefits for health care compensation is screwy. I seem to recall McCain advocating reform there. However the idea that catastrophic problems is unrelated to regular preventative care just seems wrong.

  20. The rich are not everybody’s sugardaddy. You cannot keep draining them for every little thing. As Ben Franklin said, “Make the poor uncomfortable in their poverty.” In other words, if you make it uncomfortable they will choose to better themselves. If you cater to the poor and make them comfortable, they have no motivation to do any better. Is it more compassionate to teach them responsibilty for themselves and better themselves, or to make dependent slaves out of all of them? The current taxation system is not fair nor can it sustain the current spend-a-thon our government seems to be on. The economy is controlled by the consumer, not the government.

  21. I’ve examined the different taxation systems that are currently proposed out there. The current one in use is an anchor to the economy. The proposed flat-tax leaves in place the IRS and the current atrocious indeciferable tax code. The fair tax is just about the best I’ve seen proposed so far.

  22. Clark, if you feel strongly enough to write a post on this subject, I would encourage you as a businessperson to put together a fair, tough-minded business case on the issue of medical care. You should look at A)what exactly the problems are (I think your post examines that somewhat) and then B)how much it would cost for the government to fix the problems and then C)how that can be paid for given the current deficit, tax rates, decreasing government revenue, etc. I think if you put together a good business case you would find that any expansion of government into health care is simply not affordable. The only solution is to force the problem onto individuals and to increase their accountability. Yes, that was exactly what McCain said during the campaign (one of his best moments, btw, and there weren’t very many of them).

  23. Dan,

    Actually they are looking at things like soda-taxes which everyone pays (I will pay a lot on that one). Additionally we use cigarette taxes (along with income taxes)to pay for things like Medicaid (Jonathan Chait pointed out a decade ago in the New Republic the cigarette taxes are largely taxes on the poor). To break the tax-payers in to rich tax-payers and poor tax-payers seems to confuse the issue.

    Clark is making a great argument, do not get in the way. It does not help the cause.

  24. Chris,

    I’m not getting in the way of anything. I appreciate Clark’s post because it is something quite mature coming from the right over how to actually deal with the problems our modern world are dealing with.

    To break the tax-payers in to rich tax-payers and poor tax-payers seems to confuse the issue.

    But you don’t have to set up a tax on candy or soda, or even increase the cigarette tax to pay for this new service. You can simply increase the taxes on the wealthy. Frankly, I don’t get what’s so wrong with that plan.

  25. Geoff, the problem is that the ultimate argument isn’t a business case but a utilitarian case. We accept government involvement in roads because we recognize we need them and the private enterprise wouldn’t benefit everyone in the way we think needs be done. No one except the most ardent Libertarian would seriously suggest that roads be treated on an individual basis.

    To say it is an individual matter, as you do, you have to explain what to do with uninsured children.

    To claim that it isn’t affordable and that one need only push the problem onto individuals is really to say that we have no responsibility to those, who due to no fault of their own, have no insurance. As for the business case, the cost per person for health care in most nations is less than here. If you took current insurance payments, reformed the system, then you’d have enough to cover the system. If it isn’t enough then you raise taxes slightly.

    I’m probably more sympathetic to the cost argument than most. Although after Bush’s muddling of Afghanistan and Iraq wasting far more than health care would cost I don’t think it the issue you do.

    Canadian health care is not a system I’d want foisted on Americans in the least. (There simply is no choice in the system) But the cost per person in Canada is considerably less than in the US. And that ignores “hidden” costs in the US system due to the way Medicare is managed.

    Note however that I’m not advocating a single payer system. Most of the needed reforms don’t increase fees at all. If you don’t want the expansion of medicare (and considering how mismanaged it is I can understand) then simply mandate health care and provide credits to the poor allow people to switch between plans without penalty and don’t allow pre-existing cases to affect policy payments. That way people can shop for whatever health care they want and the cost to the government would actually be less than now since there would be no government health care at all – just cheques paid towards private insurance.

  26. Look, it’s very simple. The federal government has no such item in its charter, and to use the federal government is to abuse the goodwill used to make it. If you want to solve this problem, and think government should solve it, look to a state with a constitution that allows it. The federal constitution specifically lists what the federal government can do, and that’s not part of it.

    We’d object strongly to the Internet Engineering Task Force speecifying drug interaction tolerances, or the group which speciifies how a music CD works telling us what makes a safe car. Why should we allow the federal government do something it’s not chartered to do?

  27. I see a role for state, local, federal government in building their appropriate infrastructure AND maintaining it. What is the track record of continually growing, year after year, federal government in running anything? Where is the accountability? The audits? Instead the OMB/GAO comes out with yet another report, the latest forecast of SS going broke (depending who you ask, or speed of wind that day) nobody knows what happens to billions and billions of dollars. Are some bureaucrats/politicians going to lose their careers? Naw. And the government/money shell game continues. I say don’t let them have it in the first place. They’ll just blow it. The margin of fiscal safety is smaller now, also. The costs, expenditures, just exceed the projections, yet again, and the “experts” come back for more.

  28. Actually, the best-run roads are the ones that are private toll roads where the people who use the roads actually pay for them. There is no public interest (in my opinion) for charging a guy who never uses a road to pay for it.

    I don’t think we’re going over new ground here — I still don’t think you’re willing to address the issue of costs and how new entitlements get paid for. When first introduced, Medicare was supposed to cost a few billion dollars a year — forever. Now it’s in the hundreds of billions. Any new entitlement will head in the same direction. There are other solutions that don’t saddle us and future generations with new entitlements.

  29. Before CHIP, I accompanied my wife, then RS president, to visit a two-parent family in the ward with 5 or 6 children, living in a 2 bedroom apartment. Only the husband worked outside the home, and while he earned too much from his two jobs to qualify for Medicaid, neither of his employers provided health insurance and the family did not buy private coverage on their own. I suspect they would have said that they could not afford it. I am not sure what the anti-government-healthcare position would be–perhaps that they should move in with charitable relatives or to a homeless shelter so that the rent money could purchase insurance instead.

    While we were there, we noticed that one of their children was obviously ill, and asked whether the child had seen a physician, because they had no insurance and did not have a spare $80-100 to pay for an office visit. We left enough money ourselves to cover the visit, the mother took the child in for a visit the next day, and receive the treatment needed.

    I was grateful that it was only a year or so later when CHIP was enacted and this family’s children could receive care without worrying whether they had the funds or without relying on private charity.

    I would note that high deductible (i.e., catastrophic coverage) would likely have been out of this family’s means, but even if they purchased the high deductible coverage, they would have confronted the same issue of whether they could afford the $80-100 or more cost of office visits for non-catastrophic care

  30. This line:
    “and asked whether the child had seen a physician, because they had no” should read:
    “and asked whether the child had seen a physician. The child had not, because they had no”

  31. While I’m all for Gov’t-sponsored healthcare in theory, I think it might be too far a leap for us to make. I won’t go over all of my concerns, but just a few of them:

    1. There is a HUGE shortage in primary care physicians coming. Most med students are now choosing to specialize rather than go into PC due to relatively poor income and too much paperwork. Wouldn’t gov’t healthcare worsen this problem?

    2. I worry that R&D, new discoveries, and new technology might suffer.

    3. The moral hazard of eliminating copays/out of pocket expenses.

    4. If the gov’t offers healthcare what incentive is there for businesses to do the same? I believe this was one of the criticisms of Obama’s plan IIRC.

    I also worry about the political nature of this fight and fear what will happen if a plan is instituted and then there is a swing back and forth in majority of Congress and/or change in the party of the President.

  32. If you would like the quality and efficiency of healthcare coupled with three times the bureaucracy that the VA currently provides go for it. But when you take away incentive (capitalism) you take away the competitive incentive of quality. Why be the best when you can be mediocre or even terrible and get paid the same, eh? I’ve lived under the National Health Service provided in England. I’ve seen the six month waiting periods for MRIs and cat-scans. Sorry folks, but the system you all are dreaming about is fiction.

  33. Rick, just because England’s management of healthcare is incompetent doesn’t mean all management would be incompetent. It’s interesting you point to England but not to other nations where satisfaction with government health care is quite high. Just because the British can’t run an effective government doesn’t mean it isn’t possible. In any case though it’s a red herring since I’m not advocating a single payer system. Go back and read the post and see what I outlined.

    The sort of argument which looks at English or Canadian health care and then makes it seem like those are the only alternative is the worst sort of argument which I’m saddened to see the conservative movement falling prey to. Those sorts of arguments might make those of you already against any health care reform feel better. But you’ll never convince others because the arguments are bad arguments against straw men.

    Tim, there are several state programs for uninsured children. One could make the argument that health care reform should be done on a state rather than federal level. Being a Reagan styled Federalist I’m pretty sympathetic to that approach. I suspect that the fundamental problem is that I don’t think states can quite have the degree of regulation really needed to reform health care. That is I think some things demand federal intervention.

    Tim, it’s not clear to me the connection to R&D. If anything there is a case to be made that more R&D would take place because the federal government could incentivize it whereas in the current system controlled by private insurers there’s no incentive to try out new equipment and considerable incentive against it. That said I have some feelings in how R&D and safety testing is done as well. But I’ll leave that for an other post.

    As for private vs. government. One would expect government health care to be more limited and cover less. So private enterprise could compete by covering more with higher premiums, by having better doctors (look at what doctors don’t accept medicare as is), and by providing better customer service. In Germany where you have private insurers but heavy government regulation it is primarily in customer service that firms compete.

    As for general practice I don’t see the connection. Could you clarify? I agree there is a shortage here. But I think the issue is largely orthagonal to the current one.

    David, that’s all too common. I’d like to hear Geoff answer whether it is ethical for society to leave children who have no responsibliity without health care.

    Geoff, private roads are better because they only open where there is a profit. Can you honestly see the large expensive interstates in the west being equivalent to those toll roads in high density areas?

    I’m more than willing to address the costs and have made several comments. The big problem right now is that the uninsured cost everyone by going to emergency rooms for care where care is far more expensive and where they can’t be denied and usually at the time when things have become chronic where earlier cheap intervention was possible. Where does that expense get born. That’s right. Hospitals tack it onto the costs you and I pay. As I said the uninsured also cost more just by having diseases progress to chronic levels. This is also a public health issue if there are pandemics. Also there is a large cost because unhealthy children don’t learn as well and tend to not do as well in adulthood thus forming a burden on society. If children were kept healthy they’d be more likely to earn more money as adults and pay more taxes.

    If your point is just a skepticism of any government health care what about no government health care but mandated insurance (like we have with cars) and strict regulation on insurance companies. I’ve stated this before so I’m bemused that you don’t address it. So how about the following:

    1. demand no denial of coverage for pre-existing conditions nor tying premiums based upon pre-existing conditions

    2. standardized forms and expense reporting across the country.

    3. mandated insurance

    Would you at least agree with the above? Wouldn’t you agree that moving from medicare to private mandated insurance with government giving vouchers would be cheaper than medicare and it’s out of control coverage?

  34. Geoff,

    Actually, the best-run roads are the ones that are private toll roads where the people who use the roads actually pay for them. There is no public interest (in my opinion) for charging a guy who never uses a road to pay for it.

    Do you have any research on this? It’s just that I’ve driven on quite a number of very good roads that were not toll roads, but rather maintained through public funding.

  35. Really interesting comments. It’s like reading a tennis match. One thought keeps running through my mind… would one need to be here legally to become “insured”? That’s a whole ‘nother ball of wax that’s gotta be addressed.

  36. It’s an interesting question I’ve not addressed CiCi. One problem, again, is the high cost of emergency room care which is in effect a hidden tax (among many). I have no problem with non-citizens buying insurance. I confess I don’t know the current regulations on that. Ideally we should try to get non-citizens (say Canadians down at BYU) to have good insurance.

    Dan, I’m skeptical myself. It seems to me that most federal roads are quite well maintained.

    Just in addition to my earlier comments. It might be nice to list where we do agree. It sounds like everyone agrees that employer based health care is bad. I sense agreement on some of the silly billy methods, hidden taxes, and general bureaucratic messes. Is the only place we disagree is over the expansion of children medical insurance and requiring medical insurance? Given that hospital are forced to care for those without health care it seems that demanding some level of insurance is quite justifiable.

  37. Turning it back? When was it EVER what you consider it to have been? Isn’t the current model a “consumer driven free market” system? I mean, the only piece of health care that I can see government run is Medicare, and that is mostly for the elderly and disabled.

    Dan, do you ever actually research anything before you post, or are you just disingenuous on purpose? The government pays for over 40% of all medical expenditures, and heavily regulates and subsidizes the rest. The employer based health care system as we know it today is an artifact of World War II tax policy – that is something you can look up.

  38. On the “who is going to pay for it” issue – with regard to the middle class the answer is as always – the middle class will pay for the middle class. There aren’t enough wealthy people to make a dent in what the middle class has to pay.

    Thanks for the compliment, Chris H, btw.

  39. Tim J says: “If the gov’t offers healthcare what incentive is there for businesses to do the same?”
    There shouldn’t be an incentive for businesses to do the same. I don’t want the company I work for to provide healthcare insurance. I want them to pay me the money they spend on healthcare insurance (about 20% of my gross pay for a crappy plan that includes just me), and I will gladly either pay higher taxes so everyone can have healthcare, or pay for my own private insurance. Either way, I doubt I’ll be raking in less money in the long run. And I won’t run into problems when I change jobs.

  40. Dan, the following is from a 2005 report prepared by the department of Health and Human Services:

    In 2003, public funding sources — Federal and State and local governments combined — directly financed nearly half of the nation’s health expenditures. This encompasses personal health care, research, construction, supplies and other related costs. They covered 44 percent of the spending done for personal health care including care of the active military and veterans. Over the past half century, government entities have assumed an increasingly greater role in meeting the nation’s health care needs. In 1960, they funded 25 percent of aggregate national health expenditures. With the advent of Medicare and Medicaid in 1965, the governmental share rose quickly to 38 percent in 1970, and continued to rise thereafter, reaching 46 percent in 2003.

    See http://aspe.hhs.gov/health/MedicalExpenditures/ for more.

  41. Mark,

    Thank you for sharing that. From the piece, it seems that aside from Medicare and Medicaid, the government only actually provides 11% of health expenditures, and most of those go toward paying military and veterans. So I fail to see how the government has in any way really intruded upon people’s ability to choose health insurance freely on their own, except when they simply cannot afford it.

    Clearly the emergence of Medicare and Medicaid show that private health insurance just does not do a good job at getting to every single person. If it is true that a privatized industry would do a better job at getting health insurance to most, if not all, Americans, then Medicare and Medicaid would simply not work very well, and the poor, disabled and elderly would not flock to its use. While I can appreciate the insistence on a smaller government, when it comes to health care, I just do not see the benefit for every single American, to have it privatized completely without some kind of government involvement. I repeat again, capitalism is a great tool if you have the money. But if you don’t, capitalism has no heart to care for you.

  42. Now a more interesting comparison is on what percentage of the population had some form of health insurance before Medicare/Medicaid, and what percentage of the population has health insurance in our day. In just a cursory search on Google, I get a figure of 70% of the population had some form of hospital insurance in 1965. And from census numbers in 2005, 15% of the population lacked health insurance of some form. So under Medicare/Medicaid more Americans got some kind of health coverage whereas before governmental aid came in, only 70% had some form of health insurance.

  43. Countries that have universal healthcare pay far less than we do per capita. Why should we care whether we pay an insurance company or pay the government if it means that, overall, we pay less and everyone’s insured?

  44. Can someone please tell me why I should be forced to pay for someone else’s healthcare. That is basicly what you are doing by taxing to support a socialized medicine. While you’re at it, tell me how a government run medical facility will provide the same quality medical care that a private medical facility.

    When you have medical care (and insurance) on the free market, you can choose which doctor you see. You don’t have to settle for the hack and slash quack the government provides.

    If you want to remove quality, get the government involved.

  45. Geoff, one needn’t agree with Obama or a lot of the FUD coming from liberals to think health reform is necessary. Let’s not use the old strawman tactic of the false dichotomy. Most liberals want a single payer system financed by taxing the rich. Note that’s not at all what I advocate. Heck, I’d be fine replacing Medicare with vouchers *if* the other reforms were in place.

  46. Rick, you already do pay for someone else’s healthcare. That’s the whole idea of insurance. Unless you are uninsured and pay for everything out of your own pocket, you are paying for other people. Since most of the uninsured don’t pay out of their own pockets (at least when their expenses become nontrivial), payers of premiums and taxes subsidized their treatments as well, only at a much less efficient rate than if they were all covered. Clark and Mark D. have already explained this.

    Your second question also misses the point. The debate is not really about who is “running” facilities, but about financing insurance costs.

    As it is, medical care is already far from being “on the free market.” It is mostly under the control of certain cartels that have only their self-interest at heart. The WSJ article linked by Geoff B. says

    “Yet the entire Obama agenda is about increasing political, rather than individual, control of the health markets.”

    It is mystifying that the WSJ thinks that individuals have any real control of the health markets right now.

    I would be interested in Geoff B.’s opinions on the substantive points of this article, an AMA delegate’s point of view:

    http://www.dailykos.com/storyonly/2009/6/4/193618/7677

  47. While you’re at it, tell me how a government run medical facility will provide the same quality medical care that a private medical facility.

    I guess the Walter Reed Hospital is one of the worst hospitals in the world…it is government run after all…

  48. I should add one other thing, I just don’t get the anti-government rhetoric. If government run things are terrible, then that would also mean organizations like the CIA, the FBI, the Defense Department, the NSA, the Fire Departments, are all terrible because they are government run, and taxpayer funded. Somehow the rhetoric from those who usually say government cannot run things well have nothing but high praises for how well the CIA works, or America’s military, being the best in the world and all. Well, America’s military is taxpayer funded, government run. Why does it work well and something like a health care system not? Because it is military? Then why not militarize the whole government if the military does so well? Or maybe the rhetoric doesn’t match reality. Maybe, just maybe, government run organizations are like any other organization; depending on the culture of that organization, it can either run well, or so so or really terrible. It also would probably depend on what kind of checks and balances are placed on the particular industry. The CIA, for example, has very few checks on it, and thus we constantly have to deal with problems they cause, or seem to be at the heart of. The more checks on an industry or organization, the better run it is. That’s true in private business as well as publicly funded businesses or government run entities.

  49. Walter Reed had many problems that were not fixed until it was brought to the public eye. You bring up one hospital out of hundreds that you know nothing about. Yes, you can get care there but it is specialized. A standard VA hospital is not and the sub-standard treatment given at these government hospitals is notorious. If you had ever been a patient in one, you might understand.

  50. The government can definitely run a first rate hospital – if they spend enough money on it. The problem is that government institutions are generally not under enough market discipline to be cost/efficiency competitive with private institutions.

    The reason why private healthcare institutions are often an exception to this pattern is due to the adverse selection created by government policies. The number one reason why we spend a larger percentage of GDP on health care than many other nations is the same reason why more people live in larger houses in the U.S. than comparable locations elsewhere – both healthcare and housing are heavily subsidized by the government via tax policy.

    If you want people to live in smaller houses, phase out the mortgage interest deduction. If you want people to waste less money on unnecessary health care, phase out health care tax deductions and eliminate artificial employer/insurer/government intermediaries where they aren’t necessary. Of course, at this point getting rid of the general tax preference for health care and housing is politically impossible. The next best thing to do is to change the tax policy so we don’t encourage artificial intermediation.

    Low deductible health insurance policies that are not paid for by someone else encourage waste and inefficiency all around. The patients, the doctors, and the hospitals don’t care – someone else is footing the bill. All prices rise until forced to stop by market pressures.

    The administration theory is – we are smarter than a truly free market, via centralized command and control we can direct health care administration from on high and stop prices from rising. Classic state socialism. Socialism benefits the irresponsible – the people who need a nanny state to take care of them. Everyone else pays the price.

  51. A friend of mine has an adult son who is a vet. Trying to get him help at the VA is a nightmare I would not wish on anyone. I agree with Geoff. It would be bad if our healthcare descended into the underworld of the DMV.

  52. I have no problem with the government financing the military. It is their responsibility to do so as it states in the preamble. The only running of the military that is done by the legislative branch is voting to go to war and funding. The executive branch only makes major decisions during war. Otherwise, the military runs itself. CIA, NSA, and FBI are considered part of the common defense. That is supposed to be backed by the federal government. The other thing is, the military is like an authoritative dictatorship. It must be run like that to maintain discipline. What you are advocating is the government take over of your own responsibilities and making the rich pay for it. You would make the rich into a slave class so you don’t have to take responsibilty for your own welfare.

  53. Rick, do you have trouble with the government funding schools, fire departments, police departments, National Guard, forestry service, FDA, EPA, DEA, etc. If you believe in some libertarian nirvana I may critique you for having an unrealistic faith in an unobtainable utopia. But if you think government does have a role in many things we take for granted then you just are applying a double standard.

  54. Clark, the fire departments of the United States are perhaps 0.1% of GDP. They are also very simple operations. Government control of health care is comparable to government control of the entire food chain – from the farmer to the grocery store. Big difference.

  55. “You would make the rich into a slave class so you don’t have to take responsibilty for your own welfare.”

    This is getting to be hilarious. No one is proposing anything remotely approaching this. The amount of hysteria, ignorance, and fear-mongering about health care is truly staggering.

    “Government control of health care is comparable to government control of the entire food chain – from the farmer to the grocery store.”

    Comparison doesn’t work for me. After all, except for the smallest farms, the entire food chain is already regulated. So it depends what you mean by government control. True, the government doesn’t own and operate the farms, food companies, and supermarkets. But then, no one is proposing the federal government take over all pharmaceutical or medical device companies, or hospitals, entities which are also already subject varying degrees of state and federal regulation.

    What is being proposed is a reform of the financing of patient care, which, admittedly, would affect the industry broadly. It could be done well or badly, but one can hardly argue that our current system is not rife with inefficiencies.

    Incidentally, in addition to agreeing with Clark’s six prescriptions in the original post, I also agree with your politically impossible suggestion to get rid of the nonsense artificial and distorting tax deductions.

    “The reason why private healthcare institutions are often an exception to this pattern is due to the adverse selection created by government policies.”

    Another reason is that they generally devote substantially larger shares of their patient operating expenses to uncompensated care:

    http://www.gao.gov/new.items/d05743t.pdf

  56. This is getting to be hilarious. No one is proposing anything remotely approaching this. The amount of hysteria, ignorance, and fear-mongering about health care is truly staggering.

    Exactly Bill.

  57. Mark,

    The number one reason why we spend a larger percentage of GDP on health care than many other nations is the same reason why more people live in larger houses in the U.S. than comparable locations elsewhere – both healthcare and housing are heavily subsidized by the government via tax policy.

    I’m not sure I understand this point. You’re saying the reason people live in larger houses compared to elsewhere in the world is because housing is heavily subsidized by government tax policy? I’m not sure I get this, because it would seem to me that in more socialized European countries, there would be more subsidies and a heavier tax burden, which would, by this logic, mean that Europeans by and large would be living in mansions.

    The administration theory is – we are smarter than a truly free market, via centralized command and control we can direct health care administration from on high and stop prices from rising. Classic state socialism.

    That’s not at all what they are saying. What they are saying is that it is unacceptable that 15% of the American population (which 15% of 300 million is about 45 million people!) don’t have any kind of health coverage at all. The point of this is that those 45 million people are a burden to taxpayers anyways because they still need to go to the doctor whether they have insurance or not. When they go, if they cannot pay, the burden of that expense shifts to the taxpayer anyways as hospitals pass along their bill to the government so that hospitals can continue running. How else do hospitals recoup their costs when an uninsured person who needed medical help files for bankruptcy and cannot pay the $10,000 bill the hospital sent them?

    Privatized health care does not cover those 45 million people. It never has. It is a dream to think that somehow privatized health care will actually provide coverage for people who cannot afford it.

  58. I made a typo in comment 64. It should obviously say in the last sentence, smaller instead of larger. Maybe an admin can change it.

  59. As you were, Bill. My comments about taxing the rich were directed to Dan’s solution for funding of a socialized medicine. So if you speak of someone’s ignorance, deal with him.

  60. OK, I see that Dan suggested taxing the rich in comment 25. Apart from the fact that raising marginal rates a few percentage points would still leave them well below historical norms, and hardly create out of the rich a “slave class,” health care reform can easily be paid for without that expedient. All the uninsured could be covered simply by the savings in administrative costs, but the insurance lobby will not permit this.

  61. @Clark Goble

    Clark,
    It is a fact that private schools are better than public schools. I understand that not all can afford to send their child to the best schools. Quality of education has declined ever since government took over the school system. Schools should have stayed locally and/or sparingly state funded.
    Fire and police should not be federally funded, but state and local. Most fire departments are funded locally as are police and sheriff departments.
    National Guard IS state funded. It is considered state militia and part of the common defense.
    Most government entities have regulated us and taxed us to the point we cannot even provide for our families. Those regulations and taxations require oversight which is even more money we have to pay in taxes.
    Sorry, but the “progressive” movement has created a monster. People want what they can have given to them. It’s the easy road.

    “A government that is powerful enough to give you everything you need is powerful enough to take everything you have.”

    I realize M* is overrun by liberals and their liberal thinking but the growth of government has to stop and even be reversed. We cannot sustain this kind of spending and corruption.

    Both John Adams and Thomas Jefferson would call us a nation of idiots if they were alive today.

    You may trust government as a benevolent entity but it is not. The corruption just keeps building and the people voted for a Chicago life-long politician that espouses marxist ideals to run this country. That’s not freedom. The mind boggles.

  62. Rick,

    It is a fact that private schools are better than public schools.

    Can you show the evidence of this please.

    I realize M* is overrun by liberals and their liberal thinking but the growth of government has to stop and even be reversed.

    Overrun by liberals and their liberal thinking? Hardly. But I will say, Rick, if you don’t like your views to be challenged, by all means, create your own blog and live happily there without challenge.

  63. @Bill
    Healthcare reform in the form of a socoalized medicine could not be sustained by raising the taxes only a couple of percentage points.

    It DOES create a slave class though. To tell the rich that they are not entitled to the fruits of their labor and forciblt take it from them and give it to those that do not have it is not what this country was founded on. Were the founding fathers idiots in this regard? Did they not understand? No, they understood that the best incentive you can give a poor lazy man is hunger. Ben Franklin said it well. “Make the poor uncomfortable in their poverty” (paraphrased).

    If someone else does your home teaching, are YOU blessed?

  64. I submit the following list of public schools that far outstrip the best private schools in the nation. As Ms. Pace indicates, these schools are too good for their ranking:

    These top performers, listed below in alphabetical order, were excluded from the list of top high schools because, despite their exceptional quality, their sky-high SAT and ACT scores indicate they have few or no average students.

    I also submit the following report which indicates that students in public schools learn math better than students in private schools:

    http://www.sciencedaily.com/releases/2008/05/080523162916.htm

    Students in public schools learn as much or more math between kindergarten and fifth grade as similar students in private schools, according to a new University of Illinois study of multi-year, longitudinal data on nearly 10,000 students….

    In that 2005 study, they found that public school students tested higher in math than their private school peers from similar social and economic backgrounds.
    In another, more-extensive study in early 2006, they built on those findings, and also raised similar questions about charter schools.
    Both studies were based on fourth- and eighth-grade test data from the National Assessment of Educational Progress (NAEP).
    The conclusions of the husband-and-wife team seemed “crazy radical” at the time, Sarah Lubienski said, and generated significant controversy. They were supported, however, later in 2006, with similar findings in U.S. Department of Education studies comparing public schools with privates and with charters, which looked at NAEP test data on both math and reading.

    I also submit this report that concludes:

    http://nces.ed.gov/nationsreportcard/pubs/studies/2006461.asp

    In grades 4 and 8 for both reading and mathematics, students in private schools achieved at higher levels than students in public schools. The average difference in school means ranged from almost 8 points for grade 4 mathematics, to about 18 points for grade 8 reading. The average differences were all statistically significant. Adjusting the comparisons for student characteristics resulted in reductions in all four average differences of approximately 11 to 14 points. Based on adjusted school means, the average for public schools was significantly higher than the average for private schools for grade 4 mathematics, while the average for private schools was significantly higher than the average for public schools for grade 8 reading. The average differences in adjusted school means for both grade 4 reading and grade 8 mathematics were not significantly different from zero.

    Comparisons were also carried out with subsets of private schools categorized by sectarian affiliation. After adjusting for student characteristics, raw score average differences were reduced by about 11 to 15 points. In grade 4, Catholic and Lutheran schools were each compared to public schools. For both reading and mathematics, the results were generally similar to those based on all private schools. In grade 8, Catholic, Lutheran, and Conservative Christian schools were each compared to public schools. For Catholic and Lutheran schools for both reading and mathematics, the results were again similar to those based on all private schools. For Conservative Christian schools, the average adjusted school mean in reading was not significantly different from that of public schools. In mathematics, the average adjusted school mean for Conservative Christian schools was significantly lower than that of public schools.

    Noting all that, and based on the current environment where our taxes will still go to public education, does it make any sense to send your children to a private school? It doesn’t to me, unless you are in such a poor neighborhood that there is no other option, but most if not all those who comment here, I don’t think live in such conditions.

  65. @Dan

    Here’s a little piece of evidence for you. Ask yourself this question. Where do you think the majority of the elite send THEIR children? Not to public schools. They will even tell you, “I want the best for my children.”

    And who said anything about leaving M*. I just want some people to examine all sides of the issues instead of regurgitating the liberal DNC talking points.

  66. Rick,

    It doesn’t matter where the elite send their children. That is no indication as to the actual quality of education a student gets, and is hardly helpful to the hundreds of millions of Americans out there who are NOT elite. The elite also live on the Upper East Side of Manhattan. Are you suggesting all Americans live like that? Please. The “elite” get by because of meritocracy and nepotism more than anything else, not because they are exceptionally bright. It’s quite insulting to the rest of America to say that the “elite” are the brightest, the best, the most exceptional, or even the wisest. They are not.

  67. I think the merits of public vs. private education is just a little off topic for this thread…

  68. Mark,

    It is tangential and only serves to point that governmental run schools do compete against private run schools and in some instances excel over private run schools. As it is tangential, that’s all I have to say on the matter. Government run health care institutions will be like any other government run institution. It will either excel, or be mediocre or be awful. The same goes in private institutions as well.

  69. The Washington Post has an interesting article on how people from all over the spectrum view major major health care system reform as a critical need.

    http://www.washingtonpost.com/wp-dyn/content/article/2009/06/08/AR2009060804125.html?hpid=topnews

    However, there is not agreement about the approach to take. I think that Clark’s approach (and most importantly tone) is going to be needed on all sides. Arguments about public v. private, capitalism v. socialism, whatever are not going to get us there. In fact, beating each other with cliches is what we hav been doing for decades. The result: crisis.

  70. Mark, my point about fire departments and the like is just the philosophical matter of whether it is wrong to have government involved in things. I raise it because many conservatives are more than a little hypocritical in seeing health care as horrible for government to be involved in while letting government actions in other areas. As I’ve said several times this is more defensible for hard core libertarians but then those people have a fanciful utopian scheme about as believable as the marxist utopia in my mind.

    What is so annoying in these sorts of discussions is that far too many conservatives rather than engaging in the issues and providing serious critiques or solutions devolve into fear mongering, strawmen and silly exaggerations. I wish, wish, wish more conservatives would actually engage the issues otherwise liberals like Obama will control what happens for years to come.

    Bill, the tax incentives for business health care rather than individual actually may be on the chopping block. While Obama criticized McCain for wanting to get rid of them he’s now coming around to the idea. Of course the power is ultimately in the congress and we’ll see what happens there.

    Rick, M* is run by conservatives. If you see us as liberals then I fear you are probably to the right of the John Birch society. Also only Dan (who is a liberal) is advocating taxing the rich. No one else has put that forward.

  71. The congressional plan for health care reform is out. (discussed here among other places) Sounds like the Democrats are pushing:

    1. mandated health insurance via a tax on the uninsured
    2. mandated health insurance by business
    3. list of preventive care and other coverage insurance has to cover (like maternity)
    4. no extra fees for risky behavior like smoking
    5. increased premiums
    6. medicare expanded to 150% of poverty line
    7. subsidized insurance from 150% – 500% of poverty line tied to geographic expenses
    8. public plan insurance (medicare + 10%)
    9. grandfathered health care (so you can keep existing insurance)
    10. no statement about funding
    11. for all citizens and lawful aliens

    My view is that it is 100% irresponsible to discuss health care reform without discussing funding. So (10) really, really bothers me.

    I’m all for mandates ala car insurance but I don’t like the way they are doing it (and am skeptical it will work)

    I’m really opposed to how this basically still does health care via employers whereas I think the one point we all agree upon here is that we ought move away from employer based health care. I also really oppose not allowing insurance to charge risky behavior fees. (i.e. higher premiums for smokers)

    I may have missed it but this also doesn’t address the fundamental problems either. That is the way costs are calculated by doctors and hospitals. The paper work issues. Not to mention the problem of pre-existing conditions. The expansion of medicare which is right now poorly run and too expensive without any reform truly scares me as well.

  72. Clark, I am not opposed to government action per se, and neither are most conservatives. Limited government, not no government.

    I don’t have a serious problem with the government mandating or possibly even providing catastrophic health insurance. I have a problem with state interference in everyday run of the mill health expenses based on the expansion of a type of insurance plan that has no natural reason to exist, and which is far more expensive than most middle class (let alone working class) people would pay for out of their own pockets. I think that will lead to highly deleterious effects down the road – Massachusetts has many of them already.

    I also think the government has an important role in price regulation of any area where effective monopolies exist – emergency health care is one of those areas. It also could do a lot of good by requiring basic price transparency in the system, so people can tell how much an operation is going to cost (and get quotes from different providers) before they agree to it, for example.

    Of the list above, I think there are serious problems with the degree, scope and effectiveness of just about every item on the list. Grandfathering is nice in theory, not so much in practice, depending on the differential subsidization of the alternatives. Subsidies at 500% of the poverty level is ridiculous, etc.

  73. Also, a more serious issue than the tax increases necessary to pay for the new subsidies is the increased expense of “qualified” health plans. There is not so much a need to raise taxes if you double the cost for everyone who doesn’t have gold plated heath care already. Guaranteed issue for a kitchen sink insurance plan is very expensive.

    In addition, giving larger subsidies to high cost areas is a prescription for inflation everywhere costs are currently lower, an effective method for destroying the efficiencies of the localities that do the best job.

  74. Clark, I don’t know if you saw what happened in Hawaii after they adopting what you are suggesting in point b) above: the program was dropped after seven months because people were canceling their private plans so they could get on the state dole. The governor there saw what many people refuse to acknowledge: state-run health care is too expensive and will bust the budget.

    http://answers.yahoo.com/question/index?qid=20081017052912AAcbzyA

  75. Geoff, I’m not clear what you are referring to by “point b.”

    The problem with the Democratic health care plan is that they offer no indication of limiting benefits. So they want medicare for everyone and never mention costs so that it’s in effect before people can complain. But I think I’m been pretty clear about opposing that.

    I think we have to limit (ration) care on those programs like medicare. You then have other programs that can offer more substantial benefits and better service. However you’ll note that many liberals refuse to even talk about practical reform. Without serious reform it just won’t work.

    However liberals can do what they are doing precisely because conservatives have never offered a real solution. Was there a real debate about health care then Democrats would have to engage these issues.

    Mark, the point about government intervention was more directed towards Rick. I agree that while the conservative movement is sympathetic to some libertarian positions fundamentally it is a completely different philosophy. Conservatives should want small government because of efficiency and federalism. However far too many have developed an irrational reflex of “government = bad” which is just not conservatism as I understand it. Conservatives should be all about a lean, efficient and effective government.

    I agree that “qualified” plans is very problematic. I think many of the moves liberals are doing are not oriented around real health care reform but to put a program in place that incentivizes a move towards a single payer system. Which I really, really don’t want.

  76. Clark, The plan may well improve but I think it is pretty clear at this point that drafters are offering the fairy tale version of health care, everything for everybody, like a college student with a new $10 trillion dollar credit card and no fixed plan for ever paying it off.

  77. I agree. Let’s hope the Senate offers some common sense that Pelosi clearly doesn’t have. It seems to me they are setting up all this spending and then next year they are going to cry that the only way to solve deficits is huge tax increases – which may lead to an other recession.

  78. Clark, finally some comments I can agree with. :)

    My point B reference was to your original post WAAAAY up there. My point is that “health care for children” sounds great, but somebody has to pay for it. When Hawaii tried, parents canceled their private insurance, and the state had to suspend the program. It was too expensive. That is the way we are heading with the expansion of govt sponsored health care.

    For what it is worth, I am a “soft” Libertarian on economic policy (I accept some government but would prefer government about one-tenth its current size). I have come to realize that probably means a much less ambitious foreign policy, and I’m wondering how to do that and keep us safe — the constant conundrum.

  79. By the way, to those who argued that VA hospitals are terrible, I offer this as a rebuttal.

    Yet here’s a curious fact that few conservatives or liberals know. Who do you think receives higher-quality health care. Medicare patients who are free to pick their own doctors and specialists? Or aging veterans stuck in those presumably filthy VA hospitals with their antiquated equipment, uncaring administrators, and incompetent staff? An answer came in 2003, when the prestigious New England Journal of Medicine published a study that compared veterans health facilities on 11 measures of quality with fee-for-service Medicare. On all 11 measures, the quality of care in veterans facilities proved to be “significantly better.”

    Here’s another curious fact. The Annals of Internal Medicine recently published a study that compared veterans health facilities with commercial managed-care systems in their treatment of diabetes patients. In seven out of seven measures of quality, the VA provided better care.

    It gets stranger. Pushed by large employers who are eager to know what they are buying when they purchase health care for their employees, an outfit called the National Committee for Quality Assurance today ranks health-care plans on 17 different performance measures. These include how well the plans manage high blood pressure or how precisely they adhere to standard protocols of evidence-based medicine such as prescribing beta blockers for patients recovering from a heart attack. Winning NCQA’s seal of approval is the gold standard in the health-care industry. And who do you suppose this year’s winner is: Johns Hopkins? Mayo Clinic? Massachusetts General? Nope. In every single category, the VHA system outperforms the highest rated non-VHA hospitals.

    What do you know, government run hospitals are actually pretty good…

  80. The way I read it, the Hawaii plan was fatally flawed because (1) it wasn’t means tested and (2) it provided health care essentially for free – so every parent with private insurance for their children had an enormous incentive to drop it and rely on the state plan instead.

    It is generally economically impossible to provide any net subsidy to the middle class. And if you provide a bunch of services that people can reasonably do without, the cost for everyone goes up dramatically.

    Imagine if the government had an unlimited grocery plan – any food you want, whenever you want it. Just go to the store and hand them your food card. The likely effect would be that total grocery costs would double – no one would have any individual incentive to spend less on groceries than the next guy, so everyone would get expensive food and often waste a lot of it.

    The government would then have good cause to get into the food rationing business – so many desserts, so much meat, so many vegetables, and so on. After all the public would be footing the bill would they not? And whoever pays the piper calls the tune…

  81. And of course they would also have to get into the price control business, because a universal food plan would encourage food cost inflation for about everything – whether people consumed more groceries than average or not.

    Number one problem with health care and education – only a small minority have any reason to economize, so the providers can increase costs pretty much at will, with any convenient justification that comes to mind.

  82. It also looks like the Canadian system, despite the propaganda from Fox News, is fairly even with the United States in terms of service

    http://www.openmedicine.ca/article/view/8/1

    So if Canada’s system is generally on par with the United States in terms of health care, it would seem the only difference between the two is that Canada’s costs less…it should be noted though that the Obama administration and the Democrats do not propose something similar to Canada (which is a Republican talking point). But even if they did, it would seem that the United States’ health care would not get worse as some predict, but would stay generally on par, but cost less. Frankly, I’m all for that.

  83. DavidH – in post #32 you said, “I was grateful that it was only a year or so later when CHIP was enacted and this family’s children could receive care without worrying whether they had the funds or without relying on private charity.”

    This sounds to me like you think relying on private charity is worse than relying on government programs. Could you please clarify if this is true? If so, I would like to address some of the implications of that thought.

    —————————————————————————
    Dan – in post #29 you requested where the federal government gets the right to build, maintain, and subsidize highways.

    Article I, Section 8 Clause 3: “To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;”

    This when coupled with the 18th Clause of the same Article and Section, “To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.”

    Provides a foundation for the federal interstate highway system. Though at the time of the creation of many of our federal interstate highway system the transport of military personnel and material was also given as a reason.

    The 12th clause of the Enumerated Powers section (Article I, Section 8): “To raise and support armies, but no appropriation of money to that use shall be for a longer term than two years;”

    For history of the Interstate Highway System see:
    http://en.wikipedia.org/wiki/Interstate_Highway_System

    —————————————————————————
    I’ve read through all the comments on this post, and I fear I have come too late to get many replies to my comment, but I think everyone has missed the basic questions of healthcare reform.

    1. Is it society’s obligation to ensure that every man, woman, and child has health care insurance? If no, is society responsible for some subset of this group? If yes, why?

    2. Is it the federal government’s job to execute this goal? Bear in mind the 10th Amendment to the US Constitution says: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

    If it is the federal government’s job then the aforementioned debate is worthwhile and valid. If it is not then we should be looking elsewhere for the answers. If you answer yes to question one with sufficient reasoning and no to question two, then by the 10th amendment this becomes a state government issue. If you answer no to question one and no to question two this becomes an issue for the people, in this case individually.

    I seriously think everyone could benefit from a hard look at these two fundamental questions before rushing to the federal government for the solution to our social woes.

  84. Whatever we do, we need to ensure Medicare and Medicaid are included in the change. Otherwise, we will just be adding layers of mess on top of the current mess.

  85. Geoff, if you expand medicare you have to maintain means testing. I’d actually favor (as I think I’ve mentioned a few times) a voucher program. i.e. give the poor vouchers for their children they could use for any insurance. I also think that before any program goes into effect you have to outline how you will pay for everything – something the Democrats haven’t done. So just because Hawaii implemented the program in an incompetent fashion shouldn’t be taken as an issue with insurance.

    My view is that insurance for children should (1) be mandatory (2) provide preventative care and (3) be subsidized for the poor.

    I’ve not really mentioned funding much in this thread beyond disagreeing with Dan about soaking the rich. I think though it should be funded by (a) sin taxes on alcohol, tobacco & junk food and (b) payroll taxes. I also strongly feel it should all be divorced as much as possible from employers. I finally strongly, strongly feel that hidden taxes (as are throughout our system right now) be eliminated. I think hidden taxes are amazingly dishonest and undemocratic.

    Doug, the problem with charities is that they are unreliable. That is there isn’t a guarantee of coverage, there’s the problem of information flow (i.e. how do those able to obtain charity find out about it), and the unreliability makes planning impossible.

    As to the philosophical issue, I think those important. I’ll address them in a separate post though. I will say that your (2) above is explicitly the issue I was addressing regarding views of other government programs like highways, the FDA, the FBI and so forth. Clearly I do think society as a whole has an obligation. But the philosophical issue is more complex.

    Dan, I think it erroneous to assume that Canada with a frankly different society could be copied over the US. At a bear minimum the attitude in Canada towards health care and its government structure are radically different. I (as a Canadian) agree that the media down here often presents an egregious caricature of Canadian health care. But there are some pretty clear areas to criticize. For instance Canada significantly rations new technology. There were, for instance, only a few CAT scans in Canada at a time when even small rural American hospitals had them. Likewise it is illegal in Canada to pay extra for extra care or faster care. I don’t think many Americans would agree with that.

  86. Clark,

    Don’t get me wrong, I don’t think America should emulate Canada’s system. I was merely pointing out that the scientific research on this shows that Canada’s system is on par with the US’s system. I’m just doing my duty to slash through the boogeymen and straw raised by some here. And that since Canada’s system is on average cheaper than America’s we could not do wrong in copying their system. Not that I want to copy their system, just that it would apparently be cheaper, and still provide the same service as we have now.

  87. Yeah, but Dan, when you consider how many in the US are either underinsured or not insured at all that’s a bit of a condemnation of Canada. If you compare the typical insured American against Canada it’s a bit different which is why Americans with insurance don’t want to move towards a Canadian model.

    Effectively you are saying that a system where there is no cost to go to the doctor or get a treatment plus a rather extensive welfare system produces no benefit in aggregate over the US beyond costing less per person for the health insurance component.

    Edit: I just read some of the comments from Yglesias’ blog where I suspect you got the link. The idea is that Americans wouldn’t be getting as much care so the Canadian model is better. I don’t think that works though since you’d expect the total coverage bias of Canada to produce better health whereas you don’t see that. Also many of the treatments are ones that people might lapse into bankruptcy to get on medicare and get coverage for. The point being though that this is really a pretty damning indictment of the care from the welfare state in Canada.

    The other surprising thing is that since there is no cost for health care in Canada and no financial risk you’d expect less stress and of course stress has a significant health effect. On the other hand the shorter days in Canadian winters and the icier conditions might affect health as well. (Not that the link you gave ties directly to this)

  88. Clark,

    I’m not sure how you would condemn the Canadian system. It is understandable that Americans with employer based insurance don’t want to move to that model (and it isn’t the model I think will work here in America), but just on paper, the two systems produce apparently fairly equal results.

    Yes, I caught both reports that I linked to in #93, and #89 from Yglesias’s blog. The dude is quite smart and really good at finding this kind of stuff. He gets paid to do it though. :)

    I’m not sure how stress is related to the ability to have health insurance. I’d be curious to see a study comparing health coverage in Canada to a country on par with the environment of Canada, say a Finland or a Sweden. I think those two countries over there in Europe have probably the best health coverage in the world. Of course those countries are fairly small and also homogeneous.

  89. I’m not condemning it in the sense I’m saying it’s horrible. I am saying considering what they are doing they got little more than what we have. Yes the price per person is lower on average but you have more people per capita.

    There are studies comparing Canada with Sweden but I don’t remember the details. One thing to keep in mind though is that the Scandanavian countries are far more homogenous than Canada, as you note. That actually has a huge effect.

  90. Clark, thanks for the return comment. Everyone on here seems to be espousing the idea that the federal government should ensure that everyone has healthcare insurance. It is not apparent to me that this would be a) legal, or b) effective. As Dan himself admits Sweden and Finland who have medical systems he admires are smaller countries and more homogenous. This would certainly seem to be circumstantial evidence that implementing this sort of thing on a state level would be wiser.

    Interestingly enough the state I live in has Medicare, Medicaid, Dr. Dynasaur (I didn’t make up the spelling) and Catamount healthcare. I’m sure we’re all familiar with the first two. Dr. Dynasaur covers children from families above the poverty line with a sliding cost scale based on income and number of children. There is a cap after which if you make too much you no longer qualify for Dr. Dynasaur. Catamount healthcare covers individuals and families that do not have healthcare through their employers. It also has a sliding cost scale based on family size and income. While these programs have their own issues, I find them legally and morally more acceptable than federal coverage.

    In regard to charities, I think our own church provides an excellent counterpoint to your assertions. I will grant you that charities can be unreliable and disorganized, but not all are. (Just as government agencies can be sluggish, wasteful, and inefficient, but not all are.) If charities were the sole source of help, medical professions and other poeple would point you in the right direction for help. They would have a vested interest since they want to get paid. Today they just direct to government programs.

    I’ll look forward to your future post on the philosophical dimensions to this issue.

  91. Doug, I just don’t see the legality complaint. The same argument about interstate commerce that one could use for the interstate highway system applies to health care. Indeed one of the strongest arguments from a business point of view for universal non-employer based coverage is that it (a) evens the playing field with other countries in terms of production costs (b) enables entrepreneurship by incentivizing commercial experimentation by small groups (c) allows movement of employees across state boundaries essential in todays economy and (d) enables companies to be able to know health care costs and issues.

    Plus I don’t think anyone remotely thinks even todays conservative court would strike down an health insurance plan. There’s just too much precedence for that sort of government action.

    So the only argument is more an idiosyncratic reading of the constitution by Libertarians that divorces itself from all other interpretive methods as well as legal precedence and consistency.

    The question of effectiveness is the best argument but that’s why appeals like Dan’s to Canada, Germany, Sweden or so forth work so well. It’s fairly easy to show that universal coverage can be effective and easy to show that our current system is massively inefficient and ineffective. So the only argument really is that the current government can’t be trusted. Which is why so many strawmen get created in this debate. (i.e. the appeal to the DMV; the false dichotomy of a single payer system versus status quo, etc.) It’s the only way to make the case that universal health care would necessarily be inefficient.

    As to charities I think I should have been clearer. The issues isn’t whether charities can pay effectively if they choose to pay. The issue is how an individual person could know if they would be covered by a charity. Even the LDS system you outline doesn’t do everything since fast offerings are limited and getting broader church coverage can be more trouble. But there are big areas of uncertainty in our own welfare system. Consider the woman who is not living the law of chastity and hasn’t been to Church in six months. She discovers she has cancer. Will the Bishop cover her medical expenses? It’s boundary cases like that which make things very difficult. That’s why I say charities are unreliable as you have zero idea if you have coverage until you go in. That kind of Russian roulette isn’t exactly an ideal system.

  92. Clark, it must be the libertarian or Goldwater conservative in me coming out, but I would state that much of our current federal government has no Constitutional standing. It’s a question that just never gets asked. People just assume the federal government can do whatever they want so long as they don’t violate the Bill of Rights. So for me, legality is a question.

    The effectiveness question pushes things back to the states in my opinion. They are smaller and more responsive, but large enough to finance it if necessary.

    In playing “Devil’s Advocate” I have to say I have never seen anyone make a clear case as to why we are each compelled to ensure that each of our fellow citizens has health insurance. I agree that it’s a nice thing to do, but I’m not clear why we should be compelled to. The problem with government funded solutions to problems is that you have no say in whether you pay in or not, at least so long as it is funded with income taxes.

  93. Doug, I think you just take the libertarian tact. The issue of States vs. Federal government is applicable, but I think the question of whether we have insurance is appropriate. The big argument for it from the Federal level is that the States don’t have sufficient legal authority to do it and that the current economy demands that workers be able to move around.

    If I have time I’ll get that post out today. I’ve just been swamped the past months though so I can make no promises.

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