The ethics of health care rationing

zeketreatmentcurveThe attached chart has been causing a considerable amount of controversy lately.  It is part of the “Complete Lives System” proposed by Dr. Ezekiel Emanuel, one of Pres. Obama’s top health care advisers (and brother of Rahm Emanuel) and is similar to the CDPAP health care program.  The point of the chart is that medical interventions should take place based on some kind of priority.  And, as Dr. Emanuel says in this article (free registration required), the priority should be give to the relatively young (although not to infants).

A lot of what Dr. Emanuel has had to say has been taken out of context.  But it nevertheless true that he has tried to tackle the complex ethics of health care rationing, and he has proposed a system that favors some people (younger people in whom society has made an investment) over infants and seniors.

What do Latter-day Saints think of this prescription?

The first point that bears discussion is that health care rationing already exists.  Medical professionals have limited resources.  They make judgments on who to treat and how to treat them every day — in emergency rooms, during organ transplants, during pandemics.  I am not a doctor, but it seems pretty clear that they would be guided by their own ethics during such decisions.  Is Dr. Emanuel wrong to try to set up a structure by which to make such decisions?

Hypothetical:  you are a doctor in a small town, and you have a pandemic, a super swine flu, if you will.  There are 20 patients with the flu, but you only have 10 vaccines.  How do you decide which one deserves the vaccine?  Should the 90-year-old get it over the three-year-old?  How about the 70-year-old mayor of the town — is he more deserving than the 15-year-old young woman?

Because Dr. Emanuel has significant influence, it is not a stretch to believe that such ideas could at some point become part of national policy.  It is incontrovertible that rationing on a national scale is part of everyday life in Britain and Canada, for example, which have public national health systems.  It is also incontrovertible that Pres. Obama has said he eventually wants a single-payer system like Canada.  So, it is completely logical to assume that we should consider what that system would look like, whether rationing would take place and how rationing would be decided.  Dr. Emanuel’s scheme may be the type of system — among many others — that is considered on a national scale.

What makes many people uncomfortable — including myself — is the idea of the government being involved in these decisions.  Anybody who has gone to a crowded post office or faced an IRS audit or gone to a crowded DMV office in Miami (where the wait for a driver’s license is — I kid you not — eight hours) should be in a complete panic about government workers determining your fate.  The Wall Street Journal has imagined the Orwellian future of death panels, and it sounds horrifying.

And it is worth pointing out that the Washington Post has considered the current House bill and has found some truth to the claim that end-of-life counseling would overstep appropriate bounds by involving the government in such decisions.

But, to be fair, Dr. Emanuel is not proposing death panels, nor is President Obama.  But the Democrats, by including these issues in a national health care bill, are treading on areas where it is probably best for the government to be involved as little as possible.  I think people are not likely to get up in arms about an individual doctor, in an emergency decision, deciding to treat little Janey rather than the 90-year-old.  But people are extremely concerned about such a decision being made by faceless bureaucrats on a national scale.

I would like to address one other misunderstanding about rationing.  You will often hear the claim that we already have rationing based on the ability to pay.  Such a claim is nonsensical in a free-market system.  This is like saying that there is rationing of million-dollar houses because not everybody lives in one.

Yes, it is true that the rich can get better medical care than the poor.  It is also true that the rich usually drive better cars and get more trips to the Virgin Islands.  The rich usually have better medical care because they either A)have better health insurance plans through their employers or B)see better, more qualified doctors and pay for it themselves.   Have we really reached the point where we are so covetous that we will begrudge people to spend their own money the way that they want, claiming that unless everybody gets to see the best doctors we are suffering from “rationing?”

And given that there is a limited supply of the “best doctors,” how else are we going to determine who gets access to them?  Some of these doctors will obviously choose to donate their time to the needy, but a government that insists by fiat that it is “more fair” to control a doctor’s time based on some arcane formula of “need” is a government that is interfering in personal freedom in ways that I consider unsustainable.

Here is an inconvenient truth for those concerned with “fairness” in access to medical care:  many doctors (not all) choose to go to medical school for six, eight, 10 years because they expect to be well-paid.  They have very large medical school bills to pay off and very large malpractice insurance bills to face, thanks to trial lawyers.  The moment you begin telling doctors that they must spend their time seeing only poor clients is the moment a lot less people decide to go to medical school.  And then you have an even bigger scarcity problem:  not enough doctors.

So, it seems that, even in the medical field, it all comes back to supply and demand.  And, indeed, that is what rationing is all about:  supply not meeting demand.  Any solution to our health care problems must consider the issues of supply and demand or it will fail.  We should be talking a lot more about how to increase the supply of doctors, increase the supply of health insurance (through tax credits to individual who buy health insurance, for example), and increase medical innovation rather than measures that will inevitably involve more bureaucracy.  Then, we could get away from the admittedly overwrought talk about “death panels” and have more civil town hall discussions.

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About Geoff B.

Geoff B graduated from Stanford University (class of 1985) and worked in journalism for several years until about 1992, when he took up his second career in telecommunications sales. He has held many callings in the Church, but his favorite calling is father and husband. Geoff is active in martial arts and loves hiking and skiing. Geoff has five children and lives in Colorado.

38 thoughts on “The ethics of health care rationing

  1. I’d like to quickly bring up another subject, which you hear a lot about, which is that the normal parameters of the free market do not work in health care. In some cases that is certainly true, and health care tends to be a more inelastic good than some. For example, if you are in an accident, and are bleeding, you will pay an unlimited amount to a doctor to be saved.

    However, the free market continues to make its way into health care decisions in ways that might surprise you. Thinking of getting laser surgery on those eyes? That is an elective decision where in a large metropolitan area there might be literally dozens of possible providers. You will make your decision based on price and quality — just like with any other good or service. Infertility treatment? Some things are covered by insurance, others are not. IVF is not covered, for example, so many people try some fertility measures but not others, based entirely on cost and supply and demand.

    I think it is very important to realize that health care IS affected by the marketplace, and this is a very good thing. It provides hope that in the future, if we allow the market to work, we can bring a lot of health care costs down, by addressing the supply issues I bring up above.

  2. Geoff. A very thoughtful post. Thanks.

    One question. Is there anything in the president’s proposal that would forbid a person with means from getting all the health care he or she wants, even if governmentally regulated health plans do not cover them?

    Suppose, for example, that the regulated health insurance (or Medicare) no longer covered open heart surgery for those over age 100. Is there anything in the proposal that would forbid the 100 year old or his or her family from paying for the surgery?

  3. In answer to the question, “What do Latter-day Saints think of this prescription?”:

    It is disconcerting that almost “Every prominent participant in the current debate over how to ‘reform’ the medical and insurance industries — regardless of party — approaches the issue in collectivist terms” Health Care Collectivists.

  4. I think the argument could be made that rationing already exists, to some extent, with the health insurance companies and HMO’s. The system is broken and needs to be fixed, so now the question is do we overhaul the private system, provide a mix of government and private solutions, or do we turn exclusively to the government for management and delivery of health care.

    This is definitely a complex issue and I appreciate that there is finally a public dialogue and not just a rush to pass the first available health care reform package in Congress.

    Personally, I like the idea of co-ops, but I am open to any idea that provides affordable health care to those in need and reduces the overall cost of health care for all Americans. The days of $500 aspirin need to come to an end!!

  5. DavidH, I don’t know the answer to that question for sure, but imagine the following scenario. Government-sponsored (and subsidized) coops expand to the point where many companies decide it is not economical to continue to pay for private health insurance because the government coop is half the cost. Suddenly, companies start getting out of the insurance business, including companies that provide supplemental care for people on Medicare. So, yes, you might still be able to get such surgery, but the likelihood you could find a health insurance provider to help foot the bill would be decreased.

  6. I like an analogy I recently heard describing how health care might end up being somewhat similar to getting a college education. Right now there are people who attend public universities where states subsidize tuition rates and yet there continues to be a place for private colleges to “compete” with these government-funded institutions of higher learning despite tuition rates that are often two to three times higher. If this is the case I think Geoff’s point about the rich being able to choose better health care is not in jeopardy. The comparison breaks down a bit though when you consider that there is no effort required for universal health care and that nobody is forced to attend college.

    I’d like to see Mitt Romney get involved to the extent that he can on the national level since he has experience implementing a health care plan in Massachusetts. I think it would give him more credibility for another run in 2012.

  7. Jason T, the only problem with that analogy is that public financed higher education is beginning to break down in times of economic hardship. In California, example, the UC system is having a very hard time making ends meet amidst budget cuts. There really is no free lunch — somebody has to pay for everything the government provides. The same thing applies to government-run health care.

    Brian D, there is a big, big problem with the idea of coops. There is no reason a coop should necessarily be any less costly than a well-run company in a free market. Think about it: REI is a coop, and some of its items are less costly, some are a lot more costly. Sam’s Club beats the dickens out of REI for many products. The point is that a coop can only be hugely successful with massive government subsidies. Again, who pays for the subsidies? You do. I am not convinced that is the most efficient way to spend government money.

    Again, if we address the demand side — creating a huge group of new customers by giving people tax credits to buy health insurance — and we look at regulations on insurance companies, it is likely new companies will enter the marketplace and premiums will go down. A 30-year-old single guy who is uninsured may not be willing to pay $200/month for health insurance today — but if the cost goes down to $100 because of increased competition, he may be willing to do so. That is how you take care of the uninsured — by offering them more choices.

  8. Geoff B. (5),
    But why would that scenario be a bad thing? Economically, health insurance is a bad thing (or, at least, skews incentives significantly). Because it decreases the cost of medical care, we are likely to purchase more medical care (whether that means going to the doctor more often, having surgery that we don’t need, or going to a more-expensive doctor) than we would be willing to pay for out-of-pocket, because we are not paying for it–instead, we’re paying a $20 copay.

    We put up with the misaligned incentives as a society because we feel it important that people be healthy. But if we’re guaranteed some minimal (and, I will presume, competent) level of care, and we have to pay out-of-pocket for any additional care, we’re required to fully internalize that cost and evaluate whether we want it based on its full cost. For DavidH’s 100-year-old, that person would be forced to evaluate whether the benefits to him or her of the additional years of life presumably resulting from the open-heart surgery were worth more, or if he or she should spend the money instead on, for example, a cruise around the world.

    Note that I’m assuming a basic level of competent care. And I don’t know that I like a pure free-market situation. But taking away the externalities introduced by insurance would cause medical care to better reflect people’s preferences than the current system, with private insurance, does.

  9. Actually, Sam B, you may be surprised to learn that I agree with you. Health insurance, provided by your company with a small copay, causes all kinds of distortions to the marketplace. I knew a woman who went to the doctor — I kid you not — once a week. This was during the 1990s when companies did not have health insurance plans with large copays. She was always “sick.” She loved going to the doctor because it was “free.” Well of course it wasn’t “free” — the doctor charged the insurance company, and the insurance company raised rates for everybody else. Such a system is clearly one of the main reasons for our out-of-control costs today.

    That’s why the best solution is one in which people are given tax credits for buying their own insurance. So, in my case, I would buy as much coverage as possible, or, depending on the alternatives, I might just buy catastrophic care and then pay for everything else out of pocket. I would negotiate with my doctor regarding costs — is that x-ray really necessary? It would totally change the patient-doctor dynamic and lower costs.

    Given our realities, that is the only solution that could transition us from our current system to one that lowers costs. Single-pay will never be a reality in the U.S. (not should it).

  10. Geoff,
    I’m not at all surprised. And I should say, I like the civil and intelligent bent with which you’ve come at this (and many other) debates.

    I’m not entirely sure I agree that the best solution is to increase the supply of doctors, health insurance, and medical innovation, at least not alone. Although all of those things are laudable, I think we need to focus at least as strongly on the demand side of the equation, both by encouraging preventative medical care and by discouraging expensive procedures with limited utility.

  11. Sam B, I prefer a civil discussion — when I first started blogging I got caught up in some mean fights, and I still carry the mental scars. Not worth it.

    I really do think there’s room for a health reform bill that actually will improve things. I have no problem with including more preventative medical care and better, more efficient use of expensive procedures among the things that need to change.

  12. Why is there so little talk about how technology could change healthcare for the better in this country? We could reduce costs and improve health outcomes if statistical studies of large populations were used. We could determine the extent to which tests and procedures were being unnecessarily ordered. We could use aggregate patient health histories to create projections and models that take symptoms as inputs and output the most likely diagnoses and necessary procedures. We could reduce a lot of trial and error methods and guesswork that happens in doctor’s heads and hands by putting relevant epidemiological data into the hands of health professionals. We could use data mining to run computerized searches of aggregate patient health histories to discover patterns that have previously resisted detection. All of these computerized methods could reduce inefficiencies and unnecessary costs in our current health system and maximize healthy outcomes.

  13. Jason T :
    I’d like to see Mitt Romney get involved to the extent that he can on the national level since he has experience implementing a health care plan in Massachusetts. I think it would give him more credibility for another run in 2012.

    Maybe I’m remembering incorrectly, but I thought Romney disowned the plan he helped bring to Massachusetts to help get in with the Right?

  14. Jjohnsen, I have recently seen an interview with Mitt in which he touted his plan as a “free market plan” vs. Obamacare. It is worth pointing out that the Heritage Foundation helped him formulate his plan, so there are some free market elements to it. But like all government mandates, it has grown bigger and more expensive than originally planned. So, I think Mitt’s health care plan will turn out to be more of a liability in 2012 than a help.

  15. Geoff, I have to admit I cringed to see this post’s title on the ldsblogs feed. But I commend you for a refreshingly even-handed take on things. I disagree a bit with a few of your characterizations, etc, but overall, very nice.

    One thing that I will mention:

    But, to be fair, Dr. Emanuel is not proposing death panels, nor is President Obama. But the Democrats, by including these issues in a national health care bill, are treading on areas where it is probably best for the government to be involved as little as possible. …

    The end-of-life counseling clause was actually included by Republican Senator Johnny Isakson of Georgia. But, again, kudos for explicitly debunking the absurd “death panels” rumors.

    More on the substance of the post, I think DavidH hits the key issue. Currently, health insurance companies impose strict rationing in terms of what they choose to pay for. They say that some people cost more to treat than it’s worth, and real people actually die as a result, every day. And that’s people who are lucky enough to have insurance. Another form of rationing is whether people get on the insurance rolls in the first place.

    Your response to DavidH’s point conflates two separate issues a bit I think. There is public insurance and there is public health care. Canada and England have public heath care–the doctors are literally employees of the state, much like public school teachers are here. There is zero chance of this happening in America in the foreseeable future. (Even the public insurance option, never mind exclusively public insurance, seems iffy to make it through congress at this point.) But let’s say that public insurance option passes and, as you expressed in your response to DavidH, it crowds out private insurers, leaving only the public insurance. (Here’s where the conflating takes place–) That doesn’t equate to private health care providers being crowded out. Even in the doomsday version of your scenario–all private health insurance companies are wiped out totally–you still have private health care providers who would provide a service to anyone with the means to pay. So DavidH’s point stands–the rich an always do whatever they want. At least with some kind of universal system, even an eeeevvvillll rationing one, everybody has access to some minimum amount of care before they’re left to their own cash reserves.

    That’s why the best solution is one in which people are given tax credits for buying their own insurance. So, in my case, I would buy as much coverage as possible, or, depending on the alternatives, I might just buy catastrophic care and then pay for everything else out of pocket.

    I used to be in this boat. It has advantages, as you say, of perhaps helping slow cost growth. I also strongly favor de-coupling of health insurance with employment, and your idea of everyone buying their own plan does that. (My husband is unemployed right now, so the issue of being able to keep insurance outside of a job is personal.) But I think there are serious, fatal problems with such a scheme. Namely, people who don’t need a lot of health care will either not buy insurance, or go for the high-deductible. That creates a death-spiral of cost where the pool of insured are expensive, so costs increase, pushing more people into not buying insurance. Another problem is that with any kind of individual insurance, nobody is meaningfully insured, if that means being protected from misfortune—let’s say that you are diagnosed tomorrow with a chronic condition such as Parkinson’s. As soon as your current month or year contract of insurance is up, they will drop you. If banned by law from dropping you, they will raise your rates until you drop. It’s like buying homeowner’s insurance but they can drop you the second any thing in your house burns, pay you $10 for that one thing, and say well, sorry about the rest of the house, that burned down after our contract ended. Why even have homeowner’s insurance?

    The solution is guaranteed issue and community pricing and ban exclusions for pre-existing condition (health insurance companies have to write you a policy regardless of your health, and that they have to charge you the same price they charge everyone your age, and they have to cover all your diseases). BUT, with insurance companies regulated that much, they are now sitting ducks for being played by cheap consumers who only buy insurance after they get sick. The only solution to consumers trying to cheat the health insurance companies that way is requiring people to buy insurance even if they aren’t currently sick.

    And if you do that, you have the EXACT package of reforms that is currently working its way through congress…

    Not ideal, but I don’t know how you solve the problems I mentioned any other way.

  16. I’ve been spending some serious time looking at medical records and hospital billing summaries this summer (and getting paid for it). The last one I looked at was for a woman around 80 years old, living in a nursing home, who got rushed to the ER and spent three or four weeks in the hospital. She had multiple health problems, ended up having multiple surgeries, and then died. Total paid by Medicare? Over $800,000.
    Insurance companies and Medicare need to ration healthcare. I have no problem with that woman and her family paying all the money in the world to keep her alive–that’s their choice. But when others are paying for it, that’s just too expensive. That $800,000 could do a lot more good somewhere else.
    As far as a plan for Medicare, where the government is already involved, that graph makes a lot of sense.

  17. My comment is beside the point, but now that I have my own health care crisis; I am very worried and paying closer attention.

    Right now we are on COBRA. We are paying over 1,000 dollars a month for this privilege. In three years COBRA runs out. At that point two of the five kids will be on their own. One will get major medical at college and the other will be covered by the army. Four of us ( three minors and one adult) will scramble for health insurance as our COBRA insurance will probably deny us coverage. Three of us have pre-existing conditions. Even though I am willing to pay for insurance; we will probably be denied coverage by other insurance companies. We will then be left to pay for state-run health insurance. None of our doctors will continue caring for us. We will end up paying a lot for sub-par health care. It would be one thing if our health care was free, but for us we will be paying a lot.

    I don’t know what the answer is except I hope the preexisting condition clause is eliminated from insurance policies.

  18. Have you heard that the stimulus bill offers steep discounts on COBRA for individuals who lost their jobs within the last year or so? My mom is saving hundreds of dollars per month because of this little-known provision.

  19. JA, sorry to hear that!! I am in the same boat. Husband unemployed and the company itself is shutting down, so even though we’ve only been on COBRA for a few months, the COBRA ends when the company does. My husband is in the process of starting his own business, but with a chronic condition, we can’t get insurance for any price without working for a large company. It’s scary out there, and we’re stepping right into it.

    JA, you should check out if you if qualify for the COBRA subsidy congress passed in one of the stimulus bills. Govt will pay about 60% of your COBRA premium. Our bill went from $1200ish/month to $350ish. Good luck…

  20. Getting rid of exceptions for pre-existing conditions (also known as “community rating”) is a great thing for people that have them. The problem is that the insurance rates for ordinary people will more or less double if they do that.

    The expense of COBRA insurance is no great mystery. All it means is that one is directly paying for the full cost of one’s health insurance, instead of having the employer’s share of your health insurance cost “off the books” (and tax free!) as far as you are concerned. It still comes out of your total compensation though.

    Many people are shocked, shocked, shocked when they learn how much higher their total compensation is compared to how much the top line on their paycheck is. Good health insurance is expensive. So is workers compensation. To say nothing of a traditional defined benefit pension plan.

    So much so that workers in some industries receive nearly double total compensation than they receive in wages. Why do you think it costs $75 an hour for the Big Three to employee an assembly line worker? Even the foreign car manufacturers in America pay total compensation of $48 / hour. Similar deal with teachers, public employees, and so on. Not quite that expensive, but the general situation applies.

  21. Thanks Sterling and Cynthia. I will check into it, but I think Mike made too much to qualify.

    Mark D- I understand all that and I am willing to pay for insurance. Right now we are just above the poverty line and paying for insurance is a big sacrifice, but I am willing to pay. If nothing changes, in three years we will most likely be denied insurance even if I am a willing paying customer.

    What is needed is to limit the number of frivolous law suits. This would go a long way to reduce the cost of health care. Denying us health insurance, as willing and able customers, smacks of discrimination to me.

  22. @Cynthia L (sister blah 2)

    Eh um. Canada does not have Single Owner health care like the NHS. Canada has single PAYER health care.

    Doctors are independent with one insurance company to deal with, the provincial government. Each province sets it’s own medical policies.

  23. Getting rid of exceptions for pre-existing conditions (also known as “community rating”) is a great thing for people that have them. The problem is that the insurance rates for ordinary people will more or less double if they do that.

    Mark D, are you saying that “ordinary people” never become people with expensive conditions? I pay a lot more in homeowner’s insurance than I collect annually, because of all those people whose houses burn down, even though mine doesn’t. Unfair? No. That’s why it’s called insurance.

  24. @ Cynthia L:
    I completely agree with everything you’ve said.
    It’s really nice to see someone on an LDS blog talk about a Democratically-leaning issue on its merits — and avoid the identity demagoguery.

    @ Geoff B.:
    Thanks for encouraging a thoughtful discussion. I appreciate the soft-spoken style you try to curate here.
    Some of the points you make are a bit off-base, IMO. Most especially the 10-year-old BBC News link that says “the gov’t can’t afford everything everyone might want at any time”. Of course there is no system on earth that can sustain that. It’s a very strawman argument.
    The “public option” idea is a “best of both worlds” solution. If you are afraid that your insurer will not cover you in your hour of need, you can still raise the money from friends/charity (like we do now) and bypass any perceived “rationing” — because the health care PROVIDERS are still private.

    @ those who are skeptical about the left:
    Take a look at this Wikipedia article, and ask yourself if the political leaders you follow and the news channels you consume follow some of these tactics. If they do, are they worth listening to?

  25. Dmarsee, it is generally agreed that health care rationing takes place on a very large scale in the UK in ways that we would not accept in the U.S. This article in the WSJ today points out that rationing would have to be a part of the Obama plan:

    As for demagogy, the Book of Mormon warns us repeatedly about such a tactic. I’m wondering if you would consider it demagogy for the leaders of a political party to call people who disagree with them “un-American” (Nancy Pelosi) or “evil-mongers?” (Harry Reid) Even if you want to excuse these claims as only being aimed at the most extreme of the right-wing “demagogues,” you cannot in good conscience say that one side does it and the other side does not. I will admit to you that demogagy exists on both the right-wing and the left-wing. I encourage civil discussion that avoids demagogy, which is one of the reasons I wrote this post.

  26. are you saying that “ordinary people” never become people with expensive conditions? I pay a lot more in homeowner’s insurance than I collect annually, because of all those people whose houses burn down, even though mine doesn’t. Unfair? No. That’s why it’s called insurance.

    Of course not. Insurance works by spreading out the costs of unpredictable, costly events among a large customer base. Have you ever tried to sign up for an insurance policy that covers the cost of a house that has already burned down? That will be $200,000 please.

    From the insurance companies perspective, a pre-existing condition is like the house. When you sign up before you have a serious condition, the chances that your “house will burn down” is small. If you have a serious condition already, and have no prior insurance, your house has already burned down, and now you want them to pay for it. Same deal. $10,000 please.

    In my state, you can join the high risk pool, which is about twice the cost of ordinary insurance. That still won’t cover the cost of emergency services incurred before you sign up, of course, although it will cover ongoing care after that.

    So a community rating system like the one Massachusetts has is a way to force everyone into the same risk pool and force everyone to pay into the system all the time. That sounds good in principle, but in practice there are a number of reasons why everyone is not jumping at the change to extend the Massachusetts system to the rest of the country, let alone trojan horse a single payer plan. As usual, the devil is in the details.

  27. You will often hear the claim that we already have rationing based on the ability to pay. Such a claim is nonsensical in a free-market system.

    Geoff, I don’t think that is nonsensical at all. Think of it this way: In a free market, price regulates supply, right? Now just substitute the word ration for the word regulate. It works just the same, doesn’t it?

    In any market for anything where the demand exceeds supply, either the price will rise or rationing will be imposed. There just aren’t any other options. So it isn’t surprising to see rationing imposed on the health care markets in Canada, for instance. It is exactly what we would expect. The only question to ask is whether that is worse than price increases.

  28. Mark, I think you understand my larger point, which is, in the immortal words of Mick Jagger, “you can’t always get what you want.” Just because I want a Mercedes doesn’t mean I get one. Just because I want the best doctors in the world doesn’t mean I can afford them. The rich are going to get a different level of health care.

    Or maybe not. According to the below article, people are already leaving the health care field because of increasing government involvement. This doctor has to pay for simple antibiotics out of his own pocket because of government Medicaid bureaucracy. So, perhaps we are descending to a level of universal mediocrity, which may sound fine to some people but is not sustainable, because mediocrity breeds ever lower levels of mediocrity.

  29. Fortunately, there are *a lot* of things that can be done to reduce the cost of health care. No one can easily economize on the cost of future catastrophes, but individuals can easily economize on the cost of ongoing expenses if they are given a normal incentive to do so, i.e. like we do with everything else. Catastrophic insurance + HSAs for regular expenses are a good thing that can easily halve the cost of health care for most people.

    Another serious, and related problem is the market distortion (and unfairness) related to the fact that the employers share of health care is tax free, and nearly everyone else has to pay for the full amount with after tax money. It is like a government health care subsidy that ends when your job does, i.e. just when you need it the most.

    Requiring people to carry catastrophic coverage, with some sort of government subsidy for the high cost cases, is a good thing. Requiring people buy coverage that includes a laundry list of things they don’t want or need or can purchase more economically for themselves artificially makes coverage more expensive. That is one of the reasons why people should be able to purchase insurance across state lines. The current restriction against doing so is probably unconstitutional anyway.

    The number one problem with socialized health care is that it will make most of these problems worse, i.e. we could do a lot better by enacting reforms like these and then subsidizing coverage for those with really hard cases.

  30. If you have a serious condition already, and have no prior insurance, your house has already burned down, and now you want them to pay for it. Same deal. $10,000 please.

    Few things. First, in a lot of cases, you can’t buy a policy at ANY price if you have certain preexisting conditions. Depends on state law. Second, if your house is in a super-high-risk fire area, and has burned down, and you are having a hard time getting a new policy, in the worst case you could move to a nearby less fire-prone house. You can’t very well move into a new body.

    Third, your clause about “no prior insurance” understates the problem badly. You didn’t address at all my point that even people who have continuously had insurance their whole lives end up abandoned when they get a serious condition, at the end of the year’s contract. At least the home insurance pays for your condition (pay for an entire new house), but in the case of health care, conditions are not so instantaneous. So they’ll cover you a few months, then they dump you. That’s like only paying for the first room of the house that burns, and leaving you stranded on the rest. And now you are forevermore uninsurable.

    I do agree that covering routine stuff is mostly not a good idea. That’s one quibble I have with Obama’s plan. Keep the community pricing, keep the guaranteed issue, keep the mandate. But I think the mandatory insurance should be a catastrophic plan. Let people cover their own basic stuff. Maybe some subsidy for truly poor folks (who are already on medicaid anyway). That would do a lot to control costs. Though, really, not as much as we might hope. Most dollars don’t go to the routine stuff, so there’s only so much room for savings there.

  31. Mark D -I am not for socialized medicine, but for tort reform and anti discrimination for those who have an uninsurable “condition”. Never say never. You never know when a conditon/illness could strike you and/or a loved one, and then add loss of insurance and income to the mix.

  32. dmarsee – There are a few problems with the Common Craft slides submitted by Dan Roam.

    First, slide 12 suggests that government is only recently getting involved in health care. This is far from the truth. As Dr. Edward R. Annis, former president of the American Medical Association, explained in the History of Socialized Medicine in America, health care “reform” was first promoted by a small group of Fabian socialists under the auspices of the Intercollegiate Socialistic Society (later called The League for Industrial Democracy) in the early 20th-century. The Fabians sought to introduce socialism by degrees – called “incrementalism”.

    Second, starting with slide 20, Mr. Roam suggests that private insurers have been unable to keep costs down. The remaining slides are based on this premise with no mention of the fact that government oversight is a major cause of the health care market’s inefficiencies. For example, see Why Obamacare Can’t Work: The Calculation Argument.

    If there is in fact a fundamental misunderstanding of the proposal, it is the idea that government-planned economies simply don’t work (What Soviet Medicine Teaches Us).

  33. he first point that bears discussion is that health care rationing already exists.

    We need an honest national discussion based on facts, rather than trying to avoid them. Glad you are making an effort here.

    However, I would note that you do have countries that have government supplied base health care, and people can buy more if they want. Interesting to look at such systems.

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