This is not an easy article to write. Healthcare is a complex problem that defies simple or neat or rapid solutions. It requires that we ask hard questions and work out difficult options. At the root of it are two ‘simple’ questions: how much is being healthy worth to you? Once you answer that, the second question is this: who should determine what your healthcare coverage ‘looks’ like?
So, How do we fix healthcare? It’s a question everyone seems to be asking these days. But the first thing we need to ask is: is this the right question? Is healthcare really broken? The fact is that for more than 85% of our citizens we already have the best healthcare in the world. So, what are we trying to ‘fix?’ Unfortunately, in most cases what we are hearing from politicians is the answer they think some – but not all of their constituents want, not because it will necessarily provide the best quality healthcare, but because it provides the answer they want to hear.
Let’s start at the top: What do we want? There are any number of options and choosing any one necessarily comes with limits. Do we want the best possible healthcare for the most people? How do we define best? Is this irrespective of cost? Do we want Universal Healthcare, that is, comprehensive healthcare for every citizen? Do we want Low cost Universal Healthcare, that is, comprehensive and responsive health care for every citizen, at some price lower than the price someone believes is too high? Or do we want ‘nearly Universal’ healthcare, that is, a system that will get 98 or 99% of everyone in the country healthcare, because 100% may be too hard? Or do we simply want cheaper healthcare? Should the system cover illegal immigrants? Should the system allow for elective surgery? Who defines elective? In fact, who defines all of the variables?
These points are simple, but critical. Because what the wags insist that we all really want is comprehensive, responsive, low cost, government controlled health care. And there is no such thing. It is a truism that we all want to pay less – for everything. That is hardly cause for any action by anyone in government. And no government anywhere has ever been able to provide both comprehensive and responsive low cost healthcare, never mind at the same time providing an environment that promotes further advancements in treatments.
So, let’s start by trying to define healthcare. Seems easy enough. But does ‘healthcare’ cover all preventative care? Should healthcare cover lifestyle issues? Does healthcare cover elective surgeries? (Again, define ‘elective.’) Private health insurance plans ask if you are a tobacco user. If the government is overseeing health insurance should the government have the authority to raise your rates if you smoke? And where does that stop? If you drink? If you eat fast food? If you engage in certain types of behavior (ride a motorcycle, skydive, etc.?) If you have a family history of heart disease or certain types of cancer? And where does government get that authority? Does an implied authority to provide healthcare, because it is not explicit in the Constitution, override the explicit individual rights of the Bill of Rights and other amendments? Or would these constitute de facto bills of attainder?
Instead of trying to define what we mean by various types of healthcare, let’s just look at the most easily measured piece of this entire issue – cost.
There are a host of variables that contribute to the cost of healthcare. The major items include: the number of physicians; the number of nurses; the number of hospital beds; the proliferation of new (and expensive) diagnostic devices (CAT scans, MRIs, etc.); improvements in medical techniques that allow more extensive treatments of various diseases and injuries; the cost to develop new drugs and treatments; the increase in specialization in medicine; the increase in life expectancy (we are living longer); the increase in the average age of the population; the high costs of insurance – particularly malpractice insurance; the increase in the size of federal, state and local government organizations that distribute, oversee or monitor healthcare; a change in the collective expectation when we visit the doctor’s office (we want more out of the doctor).
Unfortunately, it is not sufficient to simply change any one of those items to change the cost of health care. For example, while the US has nearly 800,000 MDs, the increase in specialization, a result both of the growth of the science of medicine and an outcome of numerous lawsuits and higher malpractice insurance premiums (routinely over $100,000 per year for some specialists), has pushed doctors to refer their patients to specialists rather than make a diagnosis themselves. The patient then sees two doctors vice one, is run through several batteries of tests and costs continue to climb.
But, the end result is that the patient receives higher quality care. Which is, in fact, what the patient wants. While much has been made over the fact that the US spends 1/7th of its GNP on healthcare, I’ve never seen anyone ask the public if they would be willing to be ‘less well’ if it saved them a little money. In short, I suspect, though it is impossible to definitively prove, we spend as much as we do on health care because we can. We want to be in the best health we can be, and we are willing to pay for it. We would like to pay less, but that is truly a meaningless statement: we would all like to pay less for everything. (This also has implications in understanding the intentions of many (but not all) who have no health insurance: they choose to have no coverage because they perceive themselves to be young enough and healthy enough to defer such coverage.)
Of course, while life expectancy has continued to improve over the past 100 years, the major changes have been as a result of basic medicine: vaccines against certain diseases, the elimination of certain diseases, the nearly universal availability of certain types of care, improvements in diets and sanitary conditions (to include our food and water.) While we all want the best possible care, and while there certainly is a concern about catastrophic care, the fact is that giving everyone in the US comprehensive healthcare – however it is paid for – will not result in a substantial increase in life expectancy or quality of life. Certain technologies and discoveries might do that, but current technology won’t.
There is, in fact, no way to correlate your healthcare expenses and your life expectancy. You might spend $1 million dollars on healthcare over the course of 65 or 70 years, or $100,000. No one will ever know how much longer you would have lived or how much more ‘quality of life’ you would have had if you had spent 5% more or 10% more, or even 1000% more.
But, the question facing us now is whether you want to make that decision yourself or whether you want someone else to make that decision. If you simply ‘redistribute’ healthcare – which is what will eventually happen under a government controlled plan – than you will be forced to answer this question because you will get 5% less healthcare. Will it mean a shorter life? A lower quality of life in your later years? In the end, you won’t get to decide, a functionary who you will likely never meet will write a set of standards and you will be forced to live with them. This is a crucial point: the Congress will pass legislation setting very broad standards and mandating certain types of coverage, but there is simply no way that a bill in Congress can cover specific situations. That will be left to the Department of Health and Human Services (HHS, the Executive Department that now overseas programs such as Medicaid and Medicare). HHS rules, regulations and policies will be set by bureaucrats, not by doctors, and certainly not by doctors who know you. Those rules and regulations will determine what kind of healthcare you receive.
That being said, is there a way to reduce medical costs so that more people can afford more healthcare? Remember, there are in fact only a few paths we can pursue: we can increase the ‘supply’ of healthcare – that is, more doctors, nurses, beds, etc.; we can reduce the demand (ration healthcare either by direct government dictate, or by government controlled (rising) prices); we can create new medical technologies that dramatically lower the cost of individual care (which consists of hoping a miracle occurs); or, to be truly draconian and evil, we can eliminate sick people. There are no other ‘paths’ that will change the equation for healthcare for the average citizen.
Therefore, the simple answer to the question ‘is there a way to reduce healthcare costs’ is: not in the short term. In the long term the only real options are either: ration healthcare: the 85% of the people already with healthcare would all get a little less, so that the other 15% could have some; or increase the supply.
If the government is going to pay for it, the government must generate the money to pay for the healthcare and government does that through taxation. But increased taxation does not generate an increase in the total amount of healthcare. The fact is that the government plan is not about creating more healthcare; it is about controlling healthcare. So, the size of the ‘pie’ remains the same (in fact, the ‘pie’ would probably shrink a bit because of the added costs of government bureaucracy). But, instead of being used by 255 million Americans, the ‘pie’ will be used by 314 million Americans (303 million citizens and 11 million illegal immigrants). The 255 million people who now receive 100% of the healthcare (except emergency care), will now receive 81% of the healthcare.
(A word on actual costs: the US spends roughly $2 trillion per year on health care. If the Federal Government directs that either you buy into a private healthcare insurance program or a government one (four of the five bills in Congress provide a government insurance plan), the Federal Government needs to pay for that insurance. If 255 million people consume $2 trillion in healthcare per year, the 56 million more that would be covered under these new programs would cost another $400 to 500 million per year, not the $1 trillion over ten years that has been claimed by those in Washington.)
The other option, the one we should all be calling for, is: put in motion plans that would increase the amount of healthcare available, which is not what the federal government is talking about. Such a plan would require government incentives (at the federal and state level) for medical and nursing schools to produce more doctors and nurses – particularly more general practitioners (GPs); increasing the number of GPs and Nurse Practitioners would allow more medical practice to take place within a context of doctors and nurses who know their patients for many years and can provide more accurate and complex diagnoses earlier – thereby focusing effort, if not reducing costs; place some restrictions or limits on malpractice lawsuit settlements to help curtail the costs of malpractice insurance; provide tax incentives to drug and medical equipment developers to speed the development of new treatments and pharmaceuticals; provide funding (and tax incentives) to promote the development of new technologies that will allow for ever more distributed healthcare (allowing a patient to benefit from the expertise of an MD electronically, as is now done in such areas as interpreting an MRI); press state and local governments to provide further tax breaks that would allow the building of more hospitals (or the expansion of existing ones), thereby providing more hospital beds.
The fact is that currently the Federal government does not create healthcare and has no plan to do so. Forcing everyone who can afford to, to buy healthcare insurance does not begin to address the fundamental issue of increasing the supply of available healthcare. (And if the past is any indication at all, employers will pay penalties and let their workers default to government provided insurance to avoid all the complications. Providing federal government payment (insurance) for those who can’t or won’t buy insurance (to include 11 million plus illegal immigrant) will cost at least several hundred billion dollars more per year. Meanwhile, government regulation will prevent any changes in pricing and provide no incentive to increase the supply of healthcare.
Despite all the talk about healthcare costing too much, no one wants less healthcare. The only reasonable approach is to create more healthcare, something government can best do by providing basic incentives and then getting out of the way, and accepting that as the overall availability increases, and the technology continues to improve, the costs will eventually begin to flatten out.
So, How do we fix healthcare? It’s a question everyone seems to be asking these days. But the first thing we need to ask is: is this the right question? Is healthcare really broken? The fact is that for more than 85% of our citizens we already have the best healthcare in the world. So, what are we trying to ‘fix?’ Unfortunately, in most cases what we are hearing from politicians is the answer they think some – but not all of their constituents want, not because it will necessarily provide the best quality healthcare, but because it provides the answer they want to hear.
Let’s start at the top: What do we want? There are any number of options and choosing any one necessarily comes with limits. Do we want the best possible healthcare for the most people? How do we define best? Is this irrespective of cost? Do we want Universal Healthcare, that is, comprehensive healthcare for every citizen? Do we want Low cost Universal Healthcare, that is, comprehensive and responsive health care for every citizen, at some price lower than the price someone believes is too high? Or do we want ‘nearly Universal’ healthcare, that is, a system that will get 98 or 99% of everyone in the country healthcare, because 100% may be too hard? Or do we simply want cheaper healthcare? Should the system cover illegal immigrants? Should the system allow for elective surgery? Who defines elective? In fact, who defines all of the variables?
These points are simple, but critical. Because what the wags insist that we all really want is comprehensive, responsive, low cost, government controlled health care. And there is no such thing. It is a truism that we all want to pay less – for everything. That is hardly cause for any action by anyone in government. And no government anywhere has ever been able to provide both comprehensive and responsive low cost healthcare, never mind at the same time providing an environment that promotes further advancements in treatments.
So, let’s start by trying to define healthcare. Seems easy enough. But does ‘healthcare’ cover all preventative care? Should healthcare cover lifestyle issues? Does healthcare cover elective surgeries? (Again, define ‘elective.’) Private health insurance plans ask if you are a tobacco user. If the government is overseeing health insurance should the government have the authority to raise your rates if you smoke? And where does that stop? If you drink? If you eat fast food? If you engage in certain types of behavior (ride a motorcycle, skydive, etc.?) If you have a family history of heart disease or certain types of cancer? And where does government get that authority? Does an implied authority to provide healthcare, because it is not explicit in the Constitution, override the explicit individual rights of the Bill of Rights and other amendments? Or would these constitute de facto bills of attainder?
Instead of trying to define what we mean by various types of healthcare, let’s just look at the most easily measured piece of this entire issue – cost.
There are a host of variables that contribute to the cost of healthcare. The major items include: the number of physicians; the number of nurses; the number of hospital beds; the proliferation of new (and expensive) diagnostic devices (CAT scans, MRIs, etc.); improvements in medical techniques that allow more extensive treatments of various diseases and injuries; the cost to develop new drugs and treatments; the increase in specialization in medicine; the increase in life expectancy (we are living longer); the increase in the average age of the population; the high costs of insurance – particularly malpractice insurance; the increase in the size of federal, state and local government organizations that distribute, oversee or monitor healthcare; a change in the collective expectation when we visit the doctor’s office (we want more out of the doctor).
Unfortunately, it is not sufficient to simply change any one of those items to change the cost of health care. For example, while the US has nearly 800,000 MDs, the increase in specialization, a result both of the growth of the science of medicine and an outcome of numerous lawsuits and higher malpractice insurance premiums (routinely over $100,000 per year for some specialists), has pushed doctors to refer their patients to specialists rather than make a diagnosis themselves. The patient then sees two doctors vice one, is run through several batteries of tests and costs continue to climb.
But, the end result is that the patient receives higher quality care. Which is, in fact, what the patient wants. While much has been made over the fact that the US spends 1/7th of its GNP on healthcare, I’ve never seen anyone ask the public if they would be willing to be ‘less well’ if it saved them a little money. In short, I suspect, though it is impossible to definitively prove, we spend as much as we do on health care because we can. We want to be in the best health we can be, and we are willing to pay for it. We would like to pay less, but that is truly a meaningless statement: we would all like to pay less for everything. (This also has implications in understanding the intentions of many (but not all) who have no health insurance: they choose to have no coverage because they perceive themselves to be young enough and healthy enough to defer such coverage.)
Of course, while life expectancy has continued to improve over the past 100 years, the major changes have been as a result of basic medicine: vaccines against certain diseases, the elimination of certain diseases, the nearly universal availability of certain types of care, improvements in diets and sanitary conditions (to include our food and water.) While we all want the best possible care, and while there certainly is a concern about catastrophic care, the fact is that giving everyone in the US comprehensive healthcare – however it is paid for – will not result in a substantial increase in life expectancy or quality of life. Certain technologies and discoveries might do that, but current technology won’t.
There is, in fact, no way to correlate your healthcare expenses and your life expectancy. You might spend $1 million dollars on healthcare over the course of 65 or 70 years, or $100,000. No one will ever know how much longer you would have lived or how much more ‘quality of life’ you would have had if you had spent 5% more or 10% more, or even 1000% more.
But, the question facing us now is whether you want to make that decision yourself or whether you want someone else to make that decision. If you simply ‘redistribute’ healthcare – which is what will eventually happen under a government controlled plan – than you will be forced to answer this question because you will get 5% less healthcare. Will it mean a shorter life? A lower quality of life in your later years? In the end, you won’t get to decide, a functionary who you will likely never meet will write a set of standards and you will be forced to live with them. This is a crucial point: the Congress will pass legislation setting very broad standards and mandating certain types of coverage, but there is simply no way that a bill in Congress can cover specific situations. That will be left to the Department of Health and Human Services (HHS, the Executive Department that now overseas programs such as Medicaid and Medicare). HHS rules, regulations and policies will be set by bureaucrats, not by doctors, and certainly not by doctors who know you. Those rules and regulations will determine what kind of healthcare you receive.
That being said, is there a way to reduce medical costs so that more people can afford more healthcare? Remember, there are in fact only a few paths we can pursue: we can increase the ‘supply’ of healthcare – that is, more doctors, nurses, beds, etc.; we can reduce the demand (ration healthcare either by direct government dictate, or by government controlled (rising) prices); we can create new medical technologies that dramatically lower the cost of individual care (which consists of hoping a miracle occurs); or, to be truly draconian and evil, we can eliminate sick people. There are no other ‘paths’ that will change the equation for healthcare for the average citizen.
Therefore, the simple answer to the question ‘is there a way to reduce healthcare costs’ is: not in the short term. In the long term the only real options are either: ration healthcare: the 85% of the people already with healthcare would all get a little less, so that the other 15% could have some; or increase the supply.
If the government is going to pay for it, the government must generate the money to pay for the healthcare and government does that through taxation. But increased taxation does not generate an increase in the total amount of healthcare. The fact is that the government plan is not about creating more healthcare; it is about controlling healthcare. So, the size of the ‘pie’ remains the same (in fact, the ‘pie’ would probably shrink a bit because of the added costs of government bureaucracy). But, instead of being used by 255 million Americans, the ‘pie’ will be used by 314 million Americans (303 million citizens and 11 million illegal immigrants). The 255 million people who now receive 100% of the healthcare (except emergency care), will now receive 81% of the healthcare.
(A word on actual costs: the US spends roughly $2 trillion per year on health care. If the Federal Government directs that either you buy into a private healthcare insurance program or a government one (four of the five bills in Congress provide a government insurance plan), the Federal Government needs to pay for that insurance. If 255 million people consume $2 trillion in healthcare per year, the 56 million more that would be covered under these new programs would cost another $400 to 500 million per year, not the $1 trillion over ten years that has been claimed by those in Washington.)
The other option, the one we should all be calling for, is: put in motion plans that would increase the amount of healthcare available, which is not what the federal government is talking about. Such a plan would require government incentives (at the federal and state level) for medical and nursing schools to produce more doctors and nurses – particularly more general practitioners (GPs); increasing the number of GPs and Nurse Practitioners would allow more medical practice to take place within a context of doctors and nurses who know their patients for many years and can provide more accurate and complex diagnoses earlier – thereby focusing effort, if not reducing costs; place some restrictions or limits on malpractice lawsuit settlements to help curtail the costs of malpractice insurance; provide tax incentives to drug and medical equipment developers to speed the development of new treatments and pharmaceuticals; provide funding (and tax incentives) to promote the development of new technologies that will allow for ever more distributed healthcare (allowing a patient to benefit from the expertise of an MD electronically, as is now done in such areas as interpreting an MRI); press state and local governments to provide further tax breaks that would allow the building of more hospitals (or the expansion of existing ones), thereby providing more hospital beds.
The fact is that currently the Federal government does not create healthcare and has no plan to do so. Forcing everyone who can afford to, to buy healthcare insurance does not begin to address the fundamental issue of increasing the supply of available healthcare. (And if the past is any indication at all, employers will pay penalties and let their workers default to government provided insurance to avoid all the complications. Providing federal government payment (insurance) for those who can’t or won’t buy insurance (to include 11 million plus illegal immigrant) will cost at least several hundred billion dollars more per year. Meanwhile, government regulation will prevent any changes in pricing and provide no incentive to increase the supply of healthcare.
Despite all the talk about healthcare costing too much, no one wants less healthcare. The only reasonable approach is to create more healthcare, something government can best do by providing basic incentives and then getting out of the way, and accepting that as the overall availability increases, and the technology continues to improve, the costs will eventually begin to flatten out.
No comments:
Post a Comment