I'm home, but still on vacation officially; doing a little business today, not much.
We're all talking about health care, and the legislation about it, here are my thoughts:
Why does health care cost so much?
1. It costs a lot because you get a lot. We not only get the best in health care in this country--better than anywhere else--we get the best anyone has ever gotten. It's so amazingly good and it's getting better at an amazing rate--and yet we've gotten so accustomed to that we forget what a wonder it is.
This part of the "problem"--is it really a problem? Every day it seems a new drug or procedure comes out that saves lives; medical advances that simply did not exist not too long ago. What's a "fair price" for something like that? How much did it cost to come up with it? If those who came up with it (and spent a lot on other avenues that didn't bear out--and thus netted little or no return on investment) don't recoup all their costs and then some, what will fund the next advance?
How much do we spend? In this article (biretta-tip to Instapundit) in Popular Mechanics--nothing against Popular Mechanics, but why isn't this sort of discussion happening elsewhere? All we seem to see on the networks is repeating talking points, either from the White House or the opposition. In that article, medical innovator Dean Kamen says we spend $260 billion a year on all pharmaceuticals: "That means all those vaccinations to prevent diseases, all those pills to treat diseases, all those pills to cure them so we don't have to treat them anymore. We spent in all branches of all our pharmaceutical suppliers, $260 billion."
By comparison, on tobacco? $88 billion; alcohol: $90 billion; soft drinks: $121 billion; professional sports: $409 billion.
So are we really spending "too much" on lifesaving technology? And the vast majority of Americans are getting the drugs and vaccinations and procedures they need.
2. It costs more than it should because of lawsuits.
Because of the threat of lawsuits, there is an uncertainty factor built into the cost of almost everything we buy and use. The more uncertain you are about possible, unforeseen liability, or even allegations of the same, the more you must pay in insurance to cover that. Medical malpractice insurance is very expensive. We have lawyers advertising nationwide, with 1-800 numbers, soliciting clients to sue over any and all medical conditions--and if you don't know you have a medical problem that can net you money, the lawyers are helpful enough to suggest them for you, in the ads. We have this advertising all over TV, and you're telling me there's no need to address the lawsuit lottery?
3. It costs more because someone else pays.
If you own a home, you get a bill every month for electricity. What do you do? You look at the bill and see if it's what you expect. If it goes up significantly, you try to find out: was there an increase in rates? Was your killowatt usage up significantly? Why? A heat wave? Too many gadgets and lights left on? If you want to cut your electricity bill, you find ways to do it, even turning your a/c a bit higher, and turning on fans.
Imagine, now, that you had "electricity insurance," and all the bills for your whole neighborhood went to the insurance provider; and then you and all your neighbors got a monthly bill for your "premium." Do you really think that would save you money? When the monthly "premium" began to mount, what would you do? You know that if you turned off your a/c entirely, and turned off the lights and sat in the dark, you'd save at best a little, likely too little to notice. Why? Because only if all your neighbors did the same, would it have a significant effect. Maybe if the government policed everyone's electricity usage--only that means hiring inspectors and administrators...
In fact, what happens now is even worse than this; imagine, instead, the bill for the premium wasn't even sent to you; it was sent to your employer. You never saw it, you only knew, generally, that it was going up. Gee, too bad for the employer--now back to the game.
This is how we do health insurance. And we have other constraints, built in, that are driven by desirable social outcomes, but which work against cost-control. Insurance companies can't price their rates based on whether you are male or female, even though they know one sex costs more to insure than the other. Imagine if automobile insurance were handled that way, but it's not.
My point is not to say we shouldn't have health insurance; or that health insurance shouldn't be handled differently from auto insurance; but that if we want to bring down costs, we might look at ways to have the user have a more personal stake in cost-control. Otherwise, it has to be down top-down, and that is not a terribly good way to do it and it inevitably leads to...
Rationing. As far as I can see, that is the only way this massive proposal President Obama, Congress, and the interest groups are all talking about, can meaningfully reduce costs. Because as far as I know, their proposal isn't addressing causes 2 and 3, above; therefore it can only reduce costs of care by giving less care.
I know, the President and his allies say they can wring out "waste, fraud and abuse." Hahaha. The government spends between $3-4 trillion a year; if that's all it takes, why can't the President and Congress come up with significant savings in the operation they, themselves, are responsible for? How is that working out?
Rationing means more people will suffer and it will mean more older people will die sooner. This is the sound basis for what the Administration's apologists in the media are deriding as "myth" and unfounded rumor. Is there any question that end-of-life care is extraordinarily expensive? And there's no question, many times they are doing too much. Why? Remember the lawyers? What the doctors and hospitals spend on extra care that has marginal value is cheaper than what they'll spend when the grieving relatives sue because they callously didn't do enough for grandma. That's what's at work with all those unnecessary tests President Obama lamented, rightly; he needs to talk to his trial-lawyer allies about that one.
But given the march toward euthanasia already, the extension of government micromanagement over the entire health care system is a recipe for a lot more of it, quietly and behind the scenes. How long before drugs that hasten death are deemed "treatment" because the patient chooses it? Of course, such choices can be..."encouraged"... That "choice" will certainly be cheaper, vastly so.
What about abortion?
This is the point that is now getting more mention; it's obvious the President's pro-abortion allies will insist on it, in the name of "choice." The pro-abortion faction isn't talking about it, and won't, until and unless there is a move to remove that from any eventual legislation. The prolife forces are talking about it, but it won't become a major thing until the legislation gets a little further along. It's coming, have no doubt of that.
So what's my answer?
As indicated, the lawsuit lottery and the problems inherent in billing a third-party have to be addressed; that would help. I suspect some legal reform would make a modest improvement, where the bigger savings would come from having actual users of health care pay more directly.
How? I'm sure others can think of better ideas, but it seems to me you continue to have users pay copays, you have users pay the more ordinary costs out of pocket, keeping "insurance" for the really big-ticket items. These things are happening now, but they aren't across-the-board. I've thought that health insurance might be better if it were more like life insurance: you build up equity over time. If it were portable, that might be worthwhile; that means changing the tax laws so tax benefits go to the individual, rather than his or her employer, as is the case now.
But as the article I linked above points out, paying more to get miracles is hardly a "crisis"; and in any case, the answer is an economy that is growing robustly and generating lots of good jobs. If real wealth goes up, we can afford more such miracles.
Our economy isn't growing, and the sorts of things President Obama has advocated have never been known to foster robust growth. Someone will accuse me of being partisan, but one can point to both Reagan (R) and Clinton (D) as periods of strong economic growth; that sort of growth would serve us well today. Unfortunately, Bush and (thus far) Obama have pursued policies that are weighing down the economy, and worse, creating uncertainty for investors.
What about the uninsured?
Well, my guess is that all those who are uninsured are uninsured for different reasons: many because of no work, or they work in jobs that don't provide health insurance. Again, a stronger economy, with more jobs, is key here; on the other hand, how can we provide folks insurance, at someone else's expense, in our present situation? Speaking most broadly, if you need to buy something you don't have, and can't presently afford, you need more wealth. That's where we are: we need the wealth of our entire society and economy to increase, and we'll be better able to afford more health insurance.
Supposedly, many who are uninsured are so by choice: they are young and healthy and figure it's worth the risk. I don't know if the facts bear that out, but it's likely to be true. I didn't care much about health insurance in my teens and 20s, and to the present, my health is great, so everyone else is getting his or her health care paid for by the premiums paid in my behalf.
I suppose one could enact a law, similar to what we do with automobile liability: if you drive, you must have proof of insurance or liability protection, so that in the event you cause harm, you can pay. But where I'd like to know more is real, carefully examined data on just how much such uninsured people actually "cost the system"--we're told this accounts for lots of built-in costs.
But is that actually true? Inquiring minds want to know. I have a suspicion it's less than is usually thought, because while individual stories are memorable, of someone with no insurance getting into an accident, or needing a life-saving operation, costing a fortune, I also suspect that simply doesn't happen frequently enough to represent that large a share of overall costs.
I'm sure there's more to say: now it's your turn.