September 28, 2009

Lake Wobegon health care


I'm an agnostic when it comes to heath care policy. As a closet libertarian, I inherently distrust big government solutions. Cartels and monopolies are bad ideas no matter who is running them. And bureaucrats don't have the spirit of God descend upon them when they enter government service.

All bureaucracies behave like bureaucracies. The bigger they are, the badder. That they're not "doing it for the money" is even scarier, because money can be tracked, taxed and audited. The serpentine corridors of power aren't so easily navigated (unless the Feds happen to be bugging your phone).

And doing it for the ideological idealism of it all turns government into a religion. With the police and IRS at its disposal.

But Christian Lander is exactly right that I'm one of those artsy-fartsy types who's going to rake in a ton more benefits from whatever socialized system we end up than I'll pay out. I may just be old enough to clean up on Social Security and Medicare before they go totally broke too.

The secret reason why all white people love socialized medicine is that they all love the idea of receiving health care without having a full-time job. This would allow them to work as a freelance [artist or writer] without having to worry about a benefits package.

I really am a freelance writer.

The best solution would be to tax benefits as income and provide a tax deduction at the median amount to balance that out, and then greatly expand high-deductible health savings accounts. Then at the low end of the income scale, salt the HSAs with EIC-type funds to cover the deductible.

Both health care providers and insurance companies should be required to publish a price list for all common medical procedures, and provide them to all comers. Oh, and an electronic medical record system is definitely a must (though I don't see why legislation is required to do that).

And then there's the most egregiously disingenuous part of the whole debate: that the government must provide a "public option" to spur competition when it was the government that curtailed competition in the first place by not allowing insurance companies to compete across state lines.

Auto, home and life insurance companies don't work under those restrictions. And not surprisingly, nobody is calling for an auto, home and life insurance "public option." Why can't that cute Australian gecko hawk health insurance in all fifty state too?

In any case, we could import the Swiss system (a network of private non-profits probably closest to the current U.S. system) pretty much whole. Why reinvent the wheel? The best "worst" solution would be to either expand Medicaid out or expand Medicare down. No need to start from scratch.

But here's the one thing I don't understand. Why are the big unions officially so in favor of single-payer, and so rabidly party-line and anti-private insurance? These unions have the best health insurance benefits on the planet. I thought only populist proles from Kansas lobbied against self-interest.

Well, the health care labor unions will certainly clean up. But when it comes to the rest, I'm a living example, having grown a beneficiary of what we actually referred to as "Generous Electric." My father was white-collar (R&D), but white-collar benefits were based on the union-negotiated package.

And as the unions spent about half their time striking for better benefits, that package was very nice. (Then Jack Welch showed up and bared his fangs and they struck themselves right out of a job.)

Even as bad as things have gotten in the auto industry of late, and with all the concessions, the GM auto worker benefits package remains better than anything I could have dreamed of back when I had a "real" job.

Active United Auto Workers members make no monthly contribution and pay no deductible for their health insurance coverage. They face no co-insurance costs for in-network physician services and an annual out-of-pocket maximum of just $500 per family for out-of-network doctors[.]

In short, there is no freaking way that a single-payer or nationalized health care system could deliver that level of benefits. The system will inevitably regress to the mean. Though maybe that wouldn't be a bad thing.

We've either got to admit that we really want to spend tons of money on health care, or grow the stones to piss off powerful interest groups--not just trial lawyers and PhRMA--try convincing the AMA to increase the supply of doctors and drive down physician incomes to European levels (i.e., cut them in half).

Or simply admit that we don't live in Lake Wobegon and everybody can't be above average when it comes to their health care benefits.

Oh, and my last "real job" insurer? IHC, which the president has called out specifically as an exemplary health care provider. It was okay. No complaints about the care provided (the paperwork was a nightmare). But it ain't Generous Electric. No standalone insurer--including the government--can afford to be.

On the other hand, if we simply can't decide what to do, there's always this idea.

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Comments:

# posted by Blogger Damien Sullivan
I don't know what the unions are thinking. Maybe they're more broad-minded now. Or maybe they've noticed that the excellent benefits are good for them but bad for their companies. But the unions started out advocating regional or national plans that business would pay into, and that would provide portable benefits[1]; it was the businesses who rejected that as "socialism" and offered choice benefits tied to the companies instead. Worked out for a while... but now GM bears costs that in other countries are spread around the population, and it's not competitive; Toyota plants may win because they're Toyota, but they're helped by opening more recently and not having pensioners to pay for.

[1] And that still applies. A union bigger than an individual company -- or a federation of unions -- might well see security and mobility as worth a possible decrease in benefits.

And, what levels of benefits are we actually comparing here? What is a big unioner getting that a Frenchman or Swede or German isn't?

Physician incomes here are higher, but some of that goes back out in malpractice premiums, med school payments, and above all hiring full-time staffers to deal with the insurance companies.

The usual reason I see for not allowing cross-state competition is preventing a race to the bottom. I'm not sure if competition is actually banned -- Blue Cross is in lots of places -- so much as state regulations regarding quality are allowed to be paramount, preventing cherry-picking from being even worse than it is. Doesn't apply to other types of insurance for the same reasons that heath care is not like other markets.

electronic medical record system is definitely a must (though I don't see why legislation is required to do that

I can't say why. But given that India has better EMR than most of the US, and the best system in the US is the VA's, are you at all inclined to re-evaluate your assumptions about potential government vs. market effectiveness? My path away from libertarianism started when I put observations over theory.

We've either got to admit that we really want to spend tons of money on health care

We're already spending a lot more than anyone else. And they live longer, and just about everyone gets fast life-saving service, if not fast everything else. (Which can be supplemented with private money. Nowhere developed does the gov't run or pay for 100% of health care.)
9/29/2009 12:04 AM
 

# posted by Anonymous Dan
Nothing like showing one's hand by writing careless statements like this: "and just about everyone gets fast life-saving service, if not fast everything else"

If this is the case why do I keep reading about Canadians who opt to get treatment in Minnesota or Wisconsin rather than wait in queue in their home country?

Policy making guided by generalities is determined to yield bad results. One reason successful businesses are so successful is because management cares about the details. They just don't assume they quantify.

Bureaucracies only care about making the core constituency happy and most times this constituency is the bureaucrats themselves.
9/29/2009 7:49 AM
 

# posted by Blogger Eugene
Private enterprise long ago settled on XML standards for B2B operations. So did the IRS (money talks). Legislation was in fact passed earlier this year to create a national EMR system. The problem is strong-arming all the doctors to get on board. I'll believe it when I see it.

I'd be happy enough if Congress took the heath care financing systems of Japan, Canada, Great Britain, France and Germany (all quite different from each other), made a big grid of the pros and cons and said, "Okay, pick one."

Improving the overall health of society is a different proposition than improving individual quality of life. Japan has the world's longest life expectancies, but if you need an organ transplant, you're probably SOL. The difference between dialysis and a kidney transplant is quality of life.

When it comes to the quality of our own lives, we are willing to spend an infinite amount of other people's money. When we get sick, we want Dr. House and his team of specialists to spend a whole week focused on getting us well. That's not going to happen in the real world.

In Europe and Japan, everybody started from zero in 1945. During that same period, the seeds of the current difficulties in the U.S. were being planted as companies increased benefits to wriggle around wage and price controls. This created a huge gap between expectations and reality.

Like I said, I'm an agnostic on the issue. If the president said, "You can all keep the insurance you have now. Oh, and forget about cost controls, the sky's the limit." Well, that'd be honest. And if he said, "We going to adopt the Canadian system, lock, stock and barrel," I'd react with a shrug. At least it's a system that actually exists.

But right now, we're in Huey Long "Every man a king" territory. All "soak the rich" carrot and no stick. Everybody gets to go to heaven and nobody has to die. I'm not buying it.
9/29/2009 10:07 AM
 

# posted by Blogger Joe
For smaller organizations, electronic medical records INCREASE the cost of medicine, not decrease it. Maintaining IT systems is very expensive. IHC gets away with their awesome system because they're huge (though even then, they send out a gazillion forms for every case--I strongly suspect this is government regulation at play.)

And please, no more EIC crap. That is one of the biggest pains in the ass to handle as a business owner. You are basically required to loan money on behalf of the government.

The tax code itself is a big part of the problem.

On the one hand, I would like to see portability in insurance and do think that those who are really hard up need BASIC insurance (yes, "death panels") from half-wit doctors, residents and interns. On the other hand, I can't figure out how to make it work without putting massive inefficiencies into the system and increasing the size of government.

All that aside, what irritates me most about this entire debate are the cavalier claims of savings and the accusations of waste, most of which are obviously just made up. For example, the notion that there is $500 billion in waste in Medicare is ludicrous. Just as silly is the notion that everyone without insurance, goes to the ER for doctor visits.

One thing sorely lacking in this entire debate is for the costs to actually be quantified. What is the real cost of litigation (not just directly, but indirectly.) How much do ERs really spend on basic health care? How much of what ERs do is force on them by government?

(IHC owns the vast majority of medical facilities in Utah. Yet I don't see IHC fundamentally changing how ERs work. Are they prohibited from doing so? Or are the accusations of waste in ERs a canard?)

My point is that beyond "Medical Care" what, specifically, is actually broken that needs fixing? (My guess: not enough to justify revamping and federalizing the whole system.)
9/29/2009 2:05 PM
 

# posted by Blogger Eugene
Hey, the EIC saved me from getting killed by Social Security taxes last year. But the goal (regardless of the funding source) would be to introduce cost-awareness into the equation, rather than fostering the notion that benefits for those below a certain income level are "free."

My idea of an EMR system is a browser-based interface that could access archived test data and X-rays and the like. When I broke my jaw, I ended up getting four sets of X-rays for the same thing. If the various doctors could simply have digitally accessed the full set initially taken at the ER (I'm thinking technology like Google Maps), it would have saved a lot of time and bother and money.
9/29/2009 3:49 PM
 

# posted by Blogger Joe
IHC has that system and I'm pretty sure it wasn't cheap. For one thing it requires pretty fat broadband. The problem is when you get out of the IHC system. (I'm under a Blue Cross plan now, so I go to an IHC doctor, but one of the few non-IHC hospitals: Timpanogas Regional also has its own computer system. The University of Utah health system also has it's own system.)
9/29/2009 5:54 PM
 

# posted by Anonymous Dan
EMR as a government mandate is bad medicine. On the implementation side it would be expensive and a regulatory nightmare. And it probably wouldn't yield the customer efficiency. On the policy side it is a privacy nightmare. The government should have no more right to see an individual's health records than one's neighbor. Special interests would be all over these records like bees to honey.

Of course Health Care reform is such a perfect bear trap. The do-gooders launch into it believing they have all the answers to fix the broken system. In their hubris and naivete they fail to appreciate how difficult it is to optimize complex systems. The free market can be messy but it does several things very well and one of these is to allow dependent systems to work naturally and with requisite capacity. Time and again it is regulated systems that fail to align market forces and result in shortages and inefficiency.

More than with any other social safety net I believe the needs and interests of public health care could best be met with a combination of personal income credits and personal health savings accounts. No system will be perfect but one that empowers individual choice will do better than one that mandates it.
9/29/2009 6:51 PM
 

# posted by Anonymous Dan
The WSJ answers all our questions:

http://online.wsj.com/article/SB10001424052748704471504574442772173150440.html

Union members not only like the tax-free, open-ended health -care benefits they're used to getting. More important and often overlooked, organized labor itself is increasingly made up of health-care workers who benefit from an incentive system that artificially force-feeds great gobs of GDP into the industry's maw.
9/29/2009 7:00 PM
 

# posted by Blogger Eugene
Added a quote from Washington Post column that perfectly illustrates the hypocrisy of union lobbying for a single-payer system that exempts themselves.
9/30/2009 3:01 PM