A Health Care Debate

In case you missed it, there has been an ongoing debate over at Cowgirl’s Site that has been fairly good. Many people who normally do not comment on that site have joined the conversation and even though Cowgirl’s resident troll has tried to disrupt the conversation, there is a lot of good information being passed back and forth.

I do find it interesting how many people (from various political backgrounds) support a Single Payer system VS the Frankenstien system we practice here in the US. Do yourself a favor and check it out.

It should also be pointed out that much of the discussion was more directed to what we should be doing to solve the issues rather than a discussion about the ACA. The ACA was brought up and discussed by a few people, but that was not the primary focus of the debate.

I will also be using this post to “archive” the major comments I put up in this debate. I want to save that information because it is part of an ongoing project I have been working on for months. Those comments can be found under the fold for those that are interested.

Post 1 - 

Ok.. now that I have time to put some of this out there, I will begin.

Health care in the US is a very complicated problem. Cries for “just make it single payer” are simplistic (while well meaning). The sheer logistics for making our health care system “single payer” are enormous.

I find when discussing a complex problem, it is useful to follow a process I learned back in High School when I was debating. The process is pretty straight forward and I will describe it here.

Step one – define the issue under discussion. It certainly doesn’t have to be the “end all” definition, but it gives people a frame of reference of where you are starting from and where you are going.

Step two – lay out a plan to address the issue. Again, this seems pretty self explanatory. It does no good to define an issue and not at least suggest a possible solution. Complaining is easy. Solving problems is the real trick.

Step three – defend your issue statement and plan of action. Again, pretty self explanatory. If you are incapable of standing up for your beliefs, then there is quite likely some serious flaws with your beliefs.

While doing this, I am going to basically ignore the current flap over the ACA. We can all state our opinions of the legislation, but as it stands now, none of us really know what the status of that legislation is and won’t know until the Court releases their opinion. I choose, instead to focus on the problem as it exists and what I see as a viable solution to the issue.

I will warn you up front that I will be wordy. Besides the fact that it is my nature (you would not believe how much crap Rob gives me for it, but he is right), this issue is immensely complex and it will take a while to get it all laid out and for me to lay out a reasonable possible solution.

Post 2 - 

Step one – defining the issue.

The issue at hand (as I see it) is how to address the entirety of the American Health Care System. That is an immense issue and one that will likely take decades to address (if it gets addressed at all). The need to address it comes from many avenues.

First, there is a desire by the majority of American voters to do so. While I could post polls from here till the Supreme Court rules on the ACA, each one would be different – for the most part. There are some surprising constants though. The most constant statistic is that a super majority of people in the US see our health care system as undeniably broken. Their reasons for that assessment are varied but they all come down to the actual cost of Health Care in the US. Since 2001, employer-sponsored health coverage for family premiums have increased by 113%, placing increasing cost burdens on employers and workers. Worse, this whole system is based on a lie we have decided is truth.

The American Health Care system is a hodge podge of Private/Public insurance, General and Specialized Primary care, and elective health care. There is far more focus on specialized procedures and far less focus on General or preventive care. Even our Medical profession reflects this insanity. Only 30% of all practicing doctors are General Practitioners. 70% of our medical doctors are specialists. This is exactly reversed with the rest of the world.

There is also a long held and completely undefendable assumption that the US health care system is the best in the world. This could not be farther from the truth. By every accepted measure of individual health, The US lags behind most of the industrial world.

Further, The Medicaid and Medicare system will – at the rate it is going now – bankrupt the American Economy. Whether this happens in the short run (some economists have predicted it will happen before 2020) or the long run is acedemic. Unless something drastic is done to fix that system, it will eventually fail. If it isn’t addressed, it will sink us. It is as simple as that.

These are all broad statements so let’s look a little deeper into the various issues involved.

Simple fact – the actual cost of health care in the US has increased at an alarming rate and is unsustainable. According to the world health organization, the average actual cost of health care for the average American is 2.5 times the cost of health care in any country in the world. Again this is an easily verifiable fact. This cost cannot be sustained either by our public health care system (Medicaid/Medicare) or by the individual. The average American family of four is spending $19,393 a year for health care. This is over 1/4 of their yearly income. That number alone should give us pause. Health Care costs have risen 7.3% in just the last year alone. Now understand that Health Care costs includes the expenditure on insurance. In fact, it is this expenditure which is part of the reason for the unsustainable increase in health care costs. Let’s dispell that illusion. The US ranks 42nd in the world when it comes to life expectancy. Deal with that number for second. We also lag behind almost all the industrial world when it comes to infant mortality. We are one of the worst countries in the world when it comes to preventive medicine or care for our poor or elderly. In fact, the only place the US really SHINES is when it comes to elective procedures. In that area, we come close to leading the world. We also have more technology available than most of the rest of the industrial world.

Given those statistics, I have to wonder why we have the best technology in the world but one of the worst health care systems in the world. The answer is simple.. All the technology in the world is useless unless there is access to it – access being not only the availability but the ability to afford it’s use.

The simple fact is that our Health Care system is too expensive, and our “insurance” model is broken.

Post 3 - 

I just realised that I failed to site my sources for various parts of my post. I will post them now…

http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx

http://money.cnn.com/2011/05/11/news/economy/healthcare_costs_family/index.htm

http://en.wikipedia.org/wiki/Health_care_in_the_United_States

Post 4 - 

Step one – defining the problem (cont).

So what makes the insurance model broken? Fair question and one that is easily answered. In fact, I find the insurance model so inherently broken, I have no idea how we every accepted it.

The model goes like this. You (or the government in the case of programs like medicare/medicaid) pay an insurance agency (usually a private, profit driven corporation) to cover a portion of your medical expenses if you have to go to the doctor. This prevents (supposedly) you from having to come up with HUGE amounts of cash at once in the event of a major problem. Sadly, that model is idiotic on it’s face.

In effect, what the insurance model represents is gambling on an epic scale. The insurance company is the bookie and you are gambling on life. You “bet” the insurance company every month that you will get sick. The insurance company takes your money and invests it (generating more money) and if you get sick, they pay the bet. If you don’t get sick, then the house wins. Moreover, the game is rigged just like any casino. The bookie (the insurance company) rigs the game by charging your a fee for your bet that is designed on it’s face to cover the bet if they lose together with a tidy profit. Regardless if you get REALLY sick, the bookie always wins. If the fee for making the bet isn’t large enough over their customer base to actually cover the bet, they charge more for the fee. If they can’t charge more for the fee, they reduce the odds that they will have to pay out by removing covered services.

Another way that this model fails is that insurance only covers a portion of the expenses of health care if you get sick and that portion gets smaller and smaller each year. On top of the kingly wage you are giving the insurance company, if you get sick, there is still a substancial amount of money that has to come out of your pocket.

The insurance model also insulates the actual health care providers, drug manufacturers, medical equipment manufacturers and associated companies from real market forces that would limit the rate at which actual costs go up. This creates an ever increasing (and utterly unsustainable) market. Insurance companies have no means to limit the actual health care costs and no incentive to do so. They are bookies. Regardless of the cost of health care, they are going to make money.

There is no sanity to this model and no forethought. Yes, it is the American Way (make what the market will bare) but at this point, the market can’t bare it and since the market is 50% or more government subsidized, the economy of the American Government can no longer survive it. Something has to change.

Post 5 - 

Issue statement (cont)

I saved this issue for last because it is not something I can supply facts, figures or links for. It is – quite literally – a belief and as such, it either stands on it’s merits or fails.

I will not make a moral judgement on health care because, in my opinion, a moral judgement is faulty inherently. Moral and social mores are fluid and can change radically. This does not mean that I am not a moral person. I like to believe that I am. I simply won’t argue health care from a moral stance.

What I will do is argue it from constitutional stance. This is a discreet argument and one that I can support. I would argue that a person’s right to health care is a right, and that the government should ensure at least basic health care as a matter of National Security.

The Constitution of the United States guarentees us the right to “life, liberty and the pursuit of happiness”. This right has been used to justify many things – and even things relating to health care. The Roe VS Wade decision is just one of many that the law has reenforced the government’s role in health. It seems clear to me that each person should have access to comprehensive basic health care and the government should guarentee that access regardless of a person’s ability to pay. I am not advocating that this care should be “free” because it has to be paid for. I am advocating that it should be guarenteed. Note that I am NOT advocating for coverage for elective procedures. If you want to get your nose fixed to “make yourself more beautiful”, that should be done on your own dime and I also believe that this kind of health care can and should be handled by the free market model.

Further, the basic health of the American People is of such a concern as to be a matter of National Security. This argument, to me is self evident, and as such, I find it hard to justify. A healthy nation is, by matter of course, a stronger nation.

For these reasons, I think a significant and radical change has to occur with not only how look at health care, but how we address it.

Post 6 - 

Step two – a possible solution

As a preamble, I want to define a few things (as I see them). This makes it easier to discuss things that may mean different things to different people.

There are essencially three forms of Universal Health Care. I will explain the differences below –

“Single Payer” health insurance – as the name implies, this is an insurance model that uses a single payer to provide the insurance. That single payer may or may not be the government. There are some basic differences between a single payer system and a hybrid Universal system. First, as an insurance model, it still requires some costs (usually a co pay) to be fronted by the insured. This difference is Huge and should not be underrated. It also still – at least to some extent – insulates the health care provider when it comes to cost reduction. To my knowledge, no country currently uses this model. Some have tried to use it, but it is usually abandoned for either a hybrid universal care system or a full universal care system.

Hybrid Universal Health Care – This is the system currently used in Canada as well as few other countries in the world. In this system, the care providers are private enterprises, and the cost of that care is paid for publically. This system is funded by taxes. This system has the advantage of being able to control health care costs by mandate while still allowing free market competition for providing care. It also does not require government funded education for it’s providers.

There are significant advantages to this system over an insurance based system. First, there are NO out of pocket expenses for those receiving health care. Preventive care is easier to ensure because there is no financial fear involved with seeking health care. This is a highly effecient system that still allows for a free market force to drive both enhancement and technology. The advantages of this system are fairly straight forward – it is more effecient, the costs of the system is handled through taxation (something the government has complete control over), and there is never any out of pocket expense to the person recieving the care. The disadvantage to this system is that the health care recieved is subject to forces outside the control of the system such as doctor availability, drug and equipment costs, and free market forces in related industries.

The last system of Universal Health care is the completely Socialized model. In this system, every aspect of the system is government funded. Care providers are – in effect – government employees. This is a common model in Europe.

There are advantages and disadvantages of this system. I won’t spend a lot of time discussing them because, quite frankly, I simply don’t realistically see Americans stomaching a purely socialist system. The idea of free market is simply too entrenched in our society (and I don’t necessarily see that as a bad thing). The primary advantage to this system is that the costs for health care are ultimately controlled by the government and therefore far more stable than any other system. The primary downside is that the government will end up having to be responcible for training and educating the Health Care professionals. It should be pointed out that (at least during my stint in the Military) this is the model that provided health care for military members. As I undestand it, the model has since shifted to a more insurance centric model (similar to single payer) but there is plenty of precident for pure universal health care in the US.

In my future comments, when I refer to universal health care, I will be using the standardized terms for the kind of care I am discussing – Single payer, Hybrid or Pure.

Post 7 -

Proposal – part 2

It is my proposal that we – as a country – institute a Hybrid Universal Health Care system. I come to this conclusion by process of elimination.

A Single Payer system definitely has some advantages over our current Frankenstien system. By operating with a single payer insurance (be it governmental or private), it reduces the cost for providers by making the billing system far more effecient. It also allows for some cost control measures to be instituted inherent to the allowed payments for services. It still does not address the primary issue of an insurance based model, though. The cost carried by the customer (you and me) is still in addition to the cost of carrying the insurance (whether the premiums are made to an insurance company or to the government in taxes). This maintains the financial fear of seeking health care and reduces the chance of an effective preventative or basic health care system to work. Further, it encourages many elements of the current frankenstien system to continue. This seems logistically unworkable even though it is probably more conceptually appealing to free market Americans.

As I stated before, a Pure Universal Health Care system is unlikely – ever – in America strictly from a conceptual outlook. I highly doubt that the average American will ever accept a purely socialistic system to be enacted.

That leaves a hybrid system where the health care is supplied by private enterprise and the cost of that health care is paid by the government through taxation.

There are a number of logistical and conceptual hurdles to overcome with this model. The trick is to know which is which and how to overcome them in a way that Americans will accept.

The first main hurdle will be conceptual. Can Americans handle a government run health care system? Twenty years ago, I would have said “not a chance in hell”. Now I am not so sure. As has been pointed out by people from all over the political spectrum, we are the only developed country in the world that does not use some form of Universal Health Care. There is a reason for that. It is the ONLY effecient way to handle public health. Period.

This is borne out by our own experience with health care. A private enterprise insurance company has an overhead of 25% – 30%. This means that for every dollar you are paying into your health care, 25% – 30% isn’t paying for that health care – it is paying for insurance company expenses, payroll, and profit. Government run insurance has a 5% – 6% overhead (yes, I know that many believe the number is smaller but let’s just go with this for a sec). When you are talking about an industry that literally spans 100′s of billions of dollars a year, this is a monumental difference. Moreover, this does not include the financial burden of having to come up with even more money out of pocket when you actually seek health care. A hybrid universal health care system would eliminate this burden.

The obvious way to pay for a hybrid system is through taxation. I recognise that taxation is a dirty word but lets consider a few things. Aren’t you being “taxed” right now for health care? How much of your income do you shell out – usually before you even get your paycheck – for health care? As I have already stated, for the average family in America, this is in excess of 25% of their income. Moreover, you have no say in this “tax”. You do not have seat (or more accurately, you do not have a representative) at the table when the insurance company is discussing your rates. In a taxation situation, you most assuredly do. That is one of the primary jobs of your representatives in Congress. By shifting the pay system to a tax, you are assured a seat at the table. Further, you are no longer required to come up with money out of pocket. There will never again be a choice of getting health care or putting food on the table.

This tax can even be set up as a progressive tax so the burden on the elderly and poor can be significantly reduced. Of course, from a conceptual standing, the more affluent will scream and nash their teeth over that idea, but a progressive tax structure is standard operating procedure in the US, so it certainly would be nothing new.

Setting up a pay structure is only the first step. There are many more obvious logistic issues to deal with. My next post will explore some of those logistical issues.

Post 8 - 

A proposed solution – part 3

As I said, I will explore some of the other logistical hurdles for a hybrid Universal health care system.

The first obsticle is both a logistic and conceptual hurdle. Ask yourself these questions..

How many people in the US are employed by Health Insurance Companies. How many people are invested in Publicly traded Health Insurance Companies. How many people have money invested in Mutual Funds or Retirement Accounts that are – in some way – dependant on publicly traded insurance companies?

The simple answer is A LOT. I have tried to find a definitive number for the number of people employed in the Health insurance field and could only find vague approximations. Fox News (never the most reliable source) reported that there were in excess of 300,000 people employed in the field in 2009. The Insurance Bureau (a health insurance think tank) reports that there were in excess of 420,000 people employed in the field. Take your pick. Either way, it is a HUGE number. That does not even begin to answer the question about investments.

To design a system that will provide Universal Health Care (even a single payer system), you would have to take into account the effect of putting all these people literally out of work. As you can see, this is not only a conceptual problem. The logistics of a retraining program, the unemployement involved and the effect on our economy are potentially enormous. This is not a reason not to do it, but it is certainly a consideration that must be handled.

Now realistically, some of them could easily be retrained to work in a public system. This wouldn’t eliminate the problem, but it would certainly reduce it’s effect. I am not actually sure how to handle the investment aspect of the situation but I am tempted to say “let them handle it for themselves”. Our markets are designed with the idea that an industry could become obsolete and it would not be the first time this occured.

This logistical consideration is actually one of the strongest arguement to using a single payer system as a “go between” when moving from an insurance model to a Hybrid Universal care model. It prolongs the pain of the transition but it gives companies time to adapt to the new reality. I would actually support a slow transition using a single payer system as a stepping stone as long as it was clear that it was JUST a stepping stone. The benefits of a Hybrid system far outweigh the benefits of remaining in an insurance model.

The next logistical issue is one that would need to be address by any change in our health care system – even if we choose to stay with the current Frankenstein model. This is the issue of availability of services.

Currently, in the US, general practitioners are a mere fraction of the doctors in the US. Only about 30% of our doctors are working on a general practice. 70% of our doctors work in specialties or pure research. This distribution is currently a problem and it is unlikely to stop being a problem unless we specifically address it.

Unfortunately, there is no clear solution for this since it is driven by a number of factors. One such factor is the high cost of education to attain a medical licence. I do not know what the current figures are but in 2004, the average medical doctor was $156,000 in scholastic debt upon recieving his or her licence. That is more than my wife and I are paying for our house. Can you imagine that prior to your very first day at work, you are looking at a such a monumental debt? Fact is, specialties pay more. A general practisioner can expect to make 16% less money for the same level of training and experience than a specialist. Another issue is the cost of running a general practice – most importantly, collecting insurance money for a general practice visit. General Practisioners pay approximately 19% more to recieve insurance payments (in time, wages and effort) than specialists. General Practisioners are leaving that practice at an alarming rate. Unless something is done to provide incentive for general practisioners to continue to practice, we may very well see the end of general practices before 2020. Even the medical profession is concerned about this trend and sadly, they have drawn a blank on how to reverse the trend. This is another HUGE logistical issue that we will have to solve to make any health care system work.

There have been a few suggestions on how to deal with this issue, though. First, by instituting a single payer system or a Universal Care system, the issue with billing goes away completely. No longer will doctors have to fight to see if a procedure is covered or wait months (if not years) to receive payment from an insurance company. These things will all be laid out, in black and white, up front.

To address the high cost of education, the suggestion was made to use a military idea. In the military, they will pay for your education in exchange for an agreed upon term of service. There is no reason in the world that this model couldn’t be applied to health care, and in truth, it somewhat surprises me that it hasn’t been already.

___________________________________________________

I never got any farther than this (though I did respond to a great number of comments there) since we had to leave for Missoula. I intend to post updates to that conversation as I can. I learned a great deal from those conversations and I am running down new information as time allows.

I think a Universal system is easily adaptable to our Country if only the people involved would allow it. I do think there are logistical issues but I would also point out that many of those logistical issues have been resolved by other countries and all we would have to do is learn from their successes and their mistakes. We are a very capable country and we are only limited by our will to succeed.

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One Response to A Health Care Debate

  1. Cliff says:

    Well said…..and well thought out. Thank you for some ideas to think about.

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