I Support Health Care Reform
My friend Todd and I had a discussion about healthcare reform today.
My understanding of Todd’s point of view was he believes that a) the only way to achieve both comprehensive coverage and cost control is to ration care, b) the government (any government) is not capable of rationing healthcare effectively because it is inherently a personal, not public, decision, and c) that the market is the best way to deliver healthcare because allows individuals to make their own healthcare choices.
1. Tragedy of the Commons
Fundamentally, the issue with healthcare is a Tragedy of the Commons issue. In other words, all the actors in the system know that it needs reform, but none of them individually have an incentive to actually reform it. Like all Tragedy of the Commons issues, a regulatory entity with the rule of law (i.e. the government) is the only entity with the power to cause reform to occur.
While on the one hand I’m not thrilled about government bureaucrats creating regulations that ration care, I am willing to make that choice because I believe that is actually the only scenario where change can occur.
Likewise, the market cannot solve this problem because in a market individuals have no incentive for change. In a market, individuals act in their own best interests which is how a Tragedy of the Commons occurs in the first place.
2. FUD: Fear, Uncertainty and Doubt
The core of the rationing argument is FUD–Fear, Uncertainty and Doubt. Arguments based on FUD fundamentally smell fishy to me, but this one particularly doesn’t make sense to me. “Do I want a government bureaucrat deciding if I get <insert medical care here>?” goes the argument.
No, I do not. However, a government bureaucrat doesn’t get to make that decision–I do. If my doctor and I think <insert medical care here> is necessary, then I can choose to go to the medical provider of my choice to have <insert medical care here>. As they say, it’s a free country.
The real issue is not whether I can get the care I want, but who will pay for it. Really, we’re not talking about health care–we’re talking about health insurance which is an important distinction to keep in mind.
3. Rationing and Capitalism
When we talk about government-run health care we’re really talking about government-run health insurance. In other words, the government is going to get into the business of issuing health insurance policies just like private companies do now. (In fact, the government is already in this business in a very big way: 46% of health care is currently paid for by government insurance policies known as Medicare and Medicaid.)
Let’s consider how this works: when you go to your doctor for medical services, he or she charges for that service. Someone has to pay, right?
Most people have a health insurance policy, just like auto, home or life insurance, that pays a benefit against claims allowed under the terms of the policy. Your car gets hit, the insurance company pays to get it fixed. Your leg gets broken, the insurance company pays to get it fixed. Same, same.
Of course, other people, the minority of people, simply pay for their medical services. They break their leg, and since they don’t have a policy, they just pay for it.
Notwithstanding the FUD, here’s what doesn’t make sense to me about the rationing argument: if the government policy doesn’t cover the medical services you want, then a) you are still free to pay cash, and b) given that we live in a capitalist society, there will be private companies that will sell policies you can buy instead if that’s what you prefer.
Actually, this isn’t really so different than how health care works today. Many private policies don’t provide certain benefits. For example, recently I needed a test that my policy didn’t cover. I still wanted the test, so I paid for it myself; it cost $99 + tax. In addition, with respect to the existing government run health insurance programs, many private companies sell policies that cover the benefits where Medicare and Medicaid do not.
In other words, the argument about rationing is a complete red herring. There is no government entity rationing services, nobody is will tell you what health care you can or cannot have. These decisions are completely, 100% up to you and your doctor. You will be able to get whatever health care you want to get. Period. Don’t let anybody tell you otherwise.
It’s simply a matter of who is going to pay for it–you, your private insurance plan or a government insurance plan.
4. Status Quo is Not Really an Option
My final thought is not in response to Todd, but a thought in general: the status quo is not really an option.
Yes, as a country, we could choose to continue down the current path, but that path is an illogical choice. Rising costs are a drag on our economy. Increasingly people cannot afford to pay for care or insurance which is a drag on our economy and morality. Per capita, we pay more and get less than any other industrialized nation. Our path is simply not sustainable.
The bottom line is that when you do the math, maintaining the current course is a certain disaster. Choosing to do nothing is a choice we are free to make, but it is an irresponsible decision, and as a society we cannot afford the consequences of that choice, both figuratively and literally.