Since 1992, national health care has been a hot topic in Presidential elections. It basically has two flavors: the currently more favored universal coverage and the more inflammatory socialized medicine. Under universal coverage, everyone has an insurance policy, possibly provided by the government; in socialized medicine, all medical expenses are paid by the state, except perhaps for some token co-payments. These distinctions are cosmetic, since under both schemes people directly pay just enough to discourage excessive consumption of medical care; we therefore refer generically to both flavors as universal coverage.
Advocates claim that, by cutting insurance costs and providing more affordable preventive care, it is possible to reduce total health care costs without reducing quality of care. This, as you may already have guessed, is The Great Universal Coverage Scam. Improved access to preventive care probably will not reduce health care costs enough to compensate for the increased burden on the system, as emergency care costs for all patients are around 1% of total medical care costs. In fact, just as with any other large-scale government policy, universal coverage will create clear groups of winners and losers.
One frequently-repeated statistic is that the US has some 46 million uninsured people. As it happens, that is both true and misleading (see first link below). While those people don't have medical insurance, it is rarely due to a terrible miscarriage of social equity. First, something like 10 million are not citizens and would therefore not be eligible for coverage. Another 18 million have incomes of above $50K and most of them could presumably buy private insurance if they so wanted. Of the rest, many are not long-term uninsured; they are between insured jobs. So, the true number of long-term uninsured, constituting the so-called "national disgrace," is in the vicinity of 10 million.
This means two things. First, the problem is not nearly as widespread as reported, which frankly suggests that politicians who stand to gain from supporting universal coverage are perpetuating propaganda. And, sadly, that includes virtually all politicians. Democrats can pander to envious proles, promising cheap health care in exchange for votes and painting Republicans as callous; Republicans can use the inflated figures to overstate the true costs and terrify the population into opposing universal coverage. Second, the immediate costs of covering these people would be significant but not overwhelming - at $5-10K per person, that would total $50-100B a year.
To the extent that medical care continues to operate under the current insurance system (albeit with some subsidies), quality of care should not initially be terribly degraded. However, so long as the cost of cutting-edge care continues to increase faster than GDP grows, at least one of four limiting forces will assert itself: average quality of care may fall; research and development of new medical techniques will slow; taxes will rise (or borrowing will increase, which still implies a future tax obligation); or subsidies will decrease. Something will have to give.
But who wins and who loses under universal coverage? Medical personnel who work on a fee-for-service basis will have more patients. For sure, those who could not afford insurance will also benefit. Democrats might capture that new and vocal voter segment but the effect would probably be short-lived. Universal coverage is likely to be a consequence of Democrats' holding the Presidency and Congress. If it became policy, it would be very difficult to undo or even change significantly (much like Social Security, which at this point would be better to separate into privatized, individual retirement funds and a welfare program for the elderly and surviving dependents). So, if the Republicans accepted universal coverage as a fact, Democrats would stop getting votes based on supporting it.
More importantly, a massive bureaucracy would have to be created to manage universal coverage. This is where the Democrats would truly gain. Since universal coverage is only likely to be a consequence of Democratic domination, they would be able to staff the entire operation with loyal supporters. Normal changes of political parties' fortunes would not change this - the Republicans could change the top executives in the Department of Universal Coverage but not do much to replace the lower ranks. As the available pool of medical funds (and therefore services) becomes more strained, medical care priorities would be more vulnerable to bribery or just influence.
As far as losers, insurers and pharmaceutical providers fear new regulation, caps on their product prices, and if not reduced profitability (since R&D spending can and would be cut to boost profits in the short term) then certainly less growth potential. Depending on what action is taken to rein in government expenditures on universal coverage, some people who would have been covered under the current system no longer would be. One obvious example is geriatric care; 5-year cancer death rates are up to twice as high in European countries as in the US (see second link below). However, since reduced spending on elderly patients in favor of increased spending on the young will likely increase average life expectancies (and since voting may not be the main concern of old people near death), there will likely be little political fallout from this.
One group, however, who will certainly not lose is the politicians. Does anyone think Fidel Castro or the Prime Minister of Canada have to wait in the same lines for medical care as the masses? It will be the same here. The middle and lower classes will get the same level of medical care while the elites will be served first. Therefore, if universal coverage is ever implemented in the US, we absolutely must demand one thing: transparency in allocation of medical services. Let us see who gets what and how long they wait. Everyone, wait your turn; that includes you, Hillary and Barack.
References:
http://www.businessandmedia.org/articles/2007/20070829140826.aspx
http://www.cato.org/pub_display.php?pub_id=9272 (read the full article PDF)
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2 comments:
Interesting but error laden.
1) 10 million not being citizens and so not eligible for coverage. Permanent Residents (Green Card holders)would/should be eligible for coverage despite not being citizens as they fully legal and pay for everything as citizens do (ie., taxes). The statistic conspicuously doesn't distinguish between legal and non-legal immigrants. Moreover, why assume non-citizens would not be covered? Many States already offer Medicaid coverage to illegals. Afterall, that's one of the main complaints of the right wing anti-immigrant movement.
2)18 million earn over $50K and are thus "choosing" not to get health insurance. Really? Let's see: family of four makes $50K. 25% to taxes leaves $37,500. Car payments $350/mo., fuel $400/mo., food $500-1000/mo, mortgage/rent $1-2000/mo and health insurance at $1-2000/mo. Do the math. This ain't a choice.
All kinds of rubbish about how we can't afford universal health care is being spewed. The data shows we spend double per person health care compared to the second most expensive country (Switzerland). 18 cents out of every dollar in every American pocket goes to health care. If we adopt a universal scheme we can only save billions. Yes, taxes go up but that's more than compensated by the overall reduction in costs.
Quality will go up. The WHO reports that America's health care system in rated #37 in the world. All of the 36 systems ahead of us have some form of national care. We don't spend our money on medicine. We spend it on "administration". That's a word for corporate costs (shareholders, CEO's, insurance company bean counters, etc...). Medicare doesn't incur those costs. That's why Medicare's admin costs are 2% and private insurers are 25%.
The bottom line is if the right of someone to make a buck on every aspect of life is the most important value in America, then stick with the current system. But, then we have to accept inferior care at superior prices. The choice is clear.
Hi, thanks for stopping by. First, I am not rigidly opposed to some type of universal coverage. We already practically have it, after all, in Medicaid and Medicare. But the "great scam" is that we can add on up to 20% more patients and not have it cost more. Please. Anyway, let me briefly address your points:
1) I assumed non-citizens would not be covered because it's tough enough to convince Americans to share with each other. But, sure, maybe they'd be included. That would, however, about double the policy costs. Seems unlikely right now given the current state of the economy and government deficits.
2) Well, you're making some assumptions there yourself. $50K in NYC may not go too far but costs of living are much lower in, say, Des Moines, Iowa. And there are others with lower income who choose not to buy subsidized health insurance, so at least some of them figure they're in good health and don't need it. Taking a chance, sure, but I suppose they figure they can if necessary run up big medical bills and then declare bankruptcy. Or maybe they have wealthy relatives. I don't know where these people are from or their situations but then, neither do you. Or do you?
I think you underestimate the ability of people to live more or less within their means. [I also doubt your hypothetical family would pay 25% in taxes, especially if they have a mortgage - but I'll let that go because I don't feel like digging out last year's 1040A booklet.] I mean, if you say a family making $50K a year is basically at subsistence then surely a family making $40K must be starving in a cardboard box. Obviously, it isn't so. They live in cheaper housing, eat cheaper food, and maybe don't drive so much.
But having said that, your hypothetical family should get a high-deductible policy which would cost much less than $1 to 2K/month. Granted, that would mean they couldn't afford to go to the doctor too often or too casually. And, in fact, I have no problem with helping them out. One of my issues with the current system is that if people in the lower middle class buy health insurance, they're basically in the same boat as poor people with free insurance - not a strong incentive to increase your income.
3) How exactly am I spewing rubbish about health care costs? Medical care costs what it costs - if the government subsidizes it, it still comes out of taxes somewhere. So, $5-10K to provide each person with coverage is a reasonable range. Either people are forced to pay for it (which is in no meaningful way different from a tax) or the government provides it. And what's your source on that 18 cents per dollar? It sounds awfully high.
OK, we could reduce how much people spend on health care by rationing what's available. I mean, if you really want to reduce health care costs, just shut down all the hospitals. We do spend a lot on health care - unlike in other countries, we also spend most of that on repairing decades of self-inflicted damage. If we're going to put in universal coverage, we should also tax junk food and body fat just like we do alcohol and cigarettes.
4) It depends on how you define quality. For sure, a planned system with a goal to improve average life expectancy will look better on the WHO rankings. Europe has higher smoking rates and people with cancer are more likely to die sooner than in the US. Why? Because it's expensive to treat cancer and tends to occur late in life.
Now, in my view, we'd all live happier lives if we spent more money while we were young instead of hoarding money so we can spend our Alzheimer's years in a trendy nursing home. But still, there are winners and losers. Low-income with a medical condition that doesn't require immediate attention? You win! High-income with a condition that's expensive to treat and needs to be treated right away? You lose!
4) OK, if operating costs for insurance providers are higher than for Medicare, then the current universal coverage proposals will do nothing to change that. But if you try to cover everything, you remove pricing and it becomes very difficult to supply services in the amounts that people want (i.e., would be willing to pay for). And then the government will either have to constantly monitor the entire health care market, in great detail (not cheap) or else adopt a crash approach to fixing crises as they are noticed. [Initially, you wouldn't see much of a problem because demand doesn't change instantly - but over, say, a few decades, it certainly would.]
5) Nice closing slogan. And, here at SQLA, we welcome strong bias, as long as it's backed up by facts. But I don't think it's clear that the US gives inferior care at high prices. I'd say the US gives very high-quality care at high prices but not to everyone. That's an important distinction.
If you really want to lower the cost of medical care: 1) eliminate cash awards in malpractice suits - charge the doctor with criminal negligence and take away his license instead; 2) cut back on unnecessary testing - give all patients information on the known benefits of all treatment and let them make their choice; 3) instead of insuring people against minor medical problems, insure them only against catastrophic ones but give everyone a tax credit that they can use to pay for small problems or not; 4) tax people more for risky behaviors whenever possible - junk food, body fat, red meat, sugar, gun ownership, and so on; 5) subsidize healthier foods - fruits, vegetables, fish, organics.
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