Sunday, July 19, 2009

Health Care Reform In America

In the comment section of a recent post about Glenn Beck going off his nut on the air about health care reform my aptly screen-named brother-in-law one L bill made the observation that he wasn't sure how to handle this issue and I have to say that I pretty much agree with him on that tact. Although I've endorsed universal coverage for all Americans and stated my belief that basic health care is an issue of human rights rather than one of pure private industry I readily admit that I'm no expert on the subject (just as I've done on the issue of economics in the past) and that I'm also not sure how we should handle this complicated but obviously important topic (just as I'm not sure how we should handle our current economic woes). I wonder if the facts that I don't regularly visit the doctor and that I don't really have a lot of money contribute much to my ignorance in these respective areas but I suspect that it's more likely that I just find them both rather boring topics of conversation.

Most people probably know by now that the United States is the only industrialized western nation that does not provide universal health care for its citizens but what I find more persuading are the numbers when you compare us to these other nations:

Still, if you insist that the United States simply must be No.1, it is true that ours is by far the most expensive health care system on the globe. Go, USA! In 2004, spending averaged $6,280 for each man, woman, and child in America — more than double the average ($2,307 per capita) spent in all other industrial countries.

Over 16 percent of our economy ($1.9 trillion last year) goes into our corporatized system — 50 percent more than Switzerland’s universal system, which ranks second in spending per person. Not only does the United States drastically outspend everyone else, but it does so while leaving tens of millions of Americans outside the system. In contrast, Canada puts only 10 percent of its economy into health care, Australia 9 percent, and England 7 percent, and these countries manage to provide care for every one of their people.

While we Americans pay much more, we get far less. The World Health Organization’s latest survey ranks the quality of U.S. health care at — cue the trumpets — 37th in the world. Ta-da! Not only is our system’s performance beneath Canada, Japan and all of Europe, but it’s also beneath such powerhouses as Malta, Colombia, Morocco, Chile and Dominica. We’re only one notch above Slovenia, for godssake!
Now I hear people on the right like Beck constantly repeating the mantra that "we have the best health care system in the world!" yet I can't help wondering why the WHO has us ranked 37th overall but I think Beck hit on the answer in his hysterical rant when he mentioned that several world leaders from other countries come to the U.S. to get health care: We have the best health care system in the world if you can afford it. I'm sure that John Travolta had one of the best doctors taking care of his autistic son before he died; I'm sure that Michael Jackson had one of the best doctors prescribing him his various medications; I'm sure that Barack Obama as president of the United States has one of the best doctors giving him his annual physical. And the thing these people all have in common with those aforementioned world leaders coming here for treatment is that they're all a whole lot richer and better off than the vast majority of the American populace, and especially those 45 million Americans (again, living in the richest and most powerful country in the world) who lack even basic health care coverage.

Now of course I realize that the other nations that do have universal health care have their fair share of problems and that obviously no system is perfect but again I just can't look at the numbers above and not suspect that our own system needs to undergo some fundamental changes. And just as I'm aware that universal care is not quite the rosy scenario that Michael Moore portrays it in his latest documentary Sicko I also know that it wouldn't turn this country into a hellish dystopia where injured people wait years for treatment and the old and infirmed are euthanized because the state determined that they should be sacrificed for the common good as many conservatives would now have you believe. The truth obviously lies somewhere in between and a little less hysterical hyperbole from both sides would do much to advance the debate.

As near as I can tell (again, I'm obviously no expert) the problems here seem to lie with a powerful insurance industry that has the money and the means to successfully lobby congress to derail any substantive reforms that could possibly threaten their bottom line. When I hear right-wingers using the standard talking point about how under universal coverage there will now be a government bureaucrat standing between you and your doctor I always think, "What, like the insurance industry does now, only with much less incentive to deny coverage for expensive and supposedly pre-existing conditions?" And the ugly little secret that these same right-wingers won't talk about is that we already have a government run health care system in this country: It's called Medicare, Medicaid and the Veteran's Administration. Millions of Americans benefit from the coverage these government-run entities provide every day whilst not languishing in constant pain nor being shunted off to Carrousel.

But to bring the narrative back to the beginning, I have to confess that I have neither the expertise nor even the willingness to definitively decide what we should do as a nation in the face of this obviously looming crises. In the past I've asked readers of this blog living in other countries with universal health care to relate their own experiences within their respective systems and only one (quietmagpie, out of Australia) has been kind enough to oblige and I strongly urge you to read his heart-rending narrative on the subject. I know that it might not be indicative of every person's experiences under a government run system but it certainly makes a strong case for one substantially different from our own here in the States. As I've said, I don't have all the answers but I think that honestly asking these pertinent questions is a good place to start the discussion.


one L bill said...

Up until the last few years I didn't have much worry about healthcare. I never had health insurance as a kid but was rarely ever sick, either. It was only when my mom was diagnosed with Multiple Sclerosis, and her entire livelihood changed, that this issue began rising to the forefront.

So far, the system has worked OK for her. The MS medication companies have provided her with thousands of dollars worth of free medication and she's been blessed with a very good doctor. She currently receives a disability insurance check (for a couple more years) that isn't a king's ransom, but does allow her some flexibility.

However, we have already began to taste the sour side of the issue. Her COBRA insurance cost about 2/3 of her income and she couldn't be eligible for Medicare until her COBRA eligibility expired... basically forcing her into the large payment. Her hearing is starting to go as well and she recently decided it was worth $2800 to get a pair of hearing aids.

As she's been gearing up for the transition to Medicare (which is coming in the next few months), she's realized that her particular circumstances will place her in the Medicare Part D donut hole after only one month. Eventually, her disability policy will stop paying and she will be living on Social Security and savings alone. Since my dad cannot save $10 if his life depended on it, her savings is limited to what she was able to accrue after their divorce in 2000... which has lost about half its value in our current economic crisis.

We're all staring down the barrel of a gun right now. She will have (virtually) nothing that the government isn't giving her and - as much as we've been helping financially already - we'll have our own increased responsibilities. I'd be lying if I said I hadn't thought of moving ourselves and her up to Canada for her remaining years. I have no idea how her healthcare needs/costs are going to work out for her or us. It is sad that her illness will probably bankrupt her, in addition to trapping her in her house. It saddens me a great deal to know that she spends everyday struggling to get ready and make her own meals, only to watch TV all day because she isn't physically capable of more.

So again, I don't know what the answers are, but I know that there are big flaws in the system. I've been very focused on my own retirement savings since I started making "real" money after college graduation, but her circumstances have really driven that importance home for me. I will sacrifice as much as I can now to prevent being so stressed and penniless at her age. At this point, all we can really do is have faith that things will work out and God will provide.

If you can figure out a way for this system to benefit all of us, I will support you, JBW.

Tim said...

My first experience with "socialized" medicine was in the UK. As a student, I got strep throat and was told to go to a nearby doctor. I had the examination, and a prescription and expected to pay a small fortune as I had no coverage, as far as I knew. The whole bill was about 5 or 10 pounds, basically the amount of a small co-pay!

After moving there, and living with this system for 12 years, I had a few instances where I required medical attention and got nothing but great treatment and, all at the cost of whatever my NHS contributions were through taxes. It's a real relief to know that you do not have to sign up every year for your benefits through work, where you read the fine print and realize, year in and year out, that your payments are higher while your service decreases. That is one of the untold stories in this dialog.

My father-in-law just had two knee surgeries and is dealing with bladder cancer, all paid for on the National Health System. It works. Believe me, it works.

The Original David said...


this is a subject about which I am something of an expert. Yet, I can't tell you the answer either. Experts disagree and their disagreement is not purely or even largely ideological.

You may have noticed recently that economics is not a fully developed science in the sense of say physics or chemistry. In fact, it is quite likely that it simply cannot be by its nature.

In any case, the micro economic models of insurance markets are comparatively recent. They are also somewhat confounding. Under some fairly reasonable a assumptions, an unregulated competitive insurance market does not produce any equilibria, much less a unique equilibrium. Furthermore, we don't often observe competitive unregulated insurance markets in the world. The now infamous CDS market may have been close, though it wasn't truly an insurance market per se.

Most of the "discussion" of the issue targeted at the general public is primarily ideological and generally uniformed. I called the "Professor" out on this once. He responded as usual by calling me a name. It was "freak", IIRC.

Anyway, at one point I decided to find out what or who had spawned him. It was easy enough to get a copy of his dissertation (not crazy by the way) and to learn that Prof. Gordon at UCSB was at least partially responsible. Imagine my surprise to discover that Prof. Gordon is in no way an ideological nut case. In this case the nut fell very far from the tree. So to the following list of links to some interesting informed discussion, I've included a recent link by one of the "Professor's" academic parents.

First, to address the high level of spending you remark on in your post, a link suggesting that it may be that we just like to spend money on health care. It may be that we'd like to buy health, but as it's not for sale we try to substitute health care. Greg Mankiw has also written on this topic but I think that this link is nice.

As I mentioned above, our models of insurance markets don't always provide insights that are easy to apply to the messy and highly regulated markets that prevail in the world. At the same time, some economists doubt that some key elements of mechanism design in fact work the way that we normally model them.

Finally, on you question of the US vs. Europe, the very thoughtful and informed Prof. Gordon weighs in. Note, you'll have to click through to the discussion at Economist's View to see the meat of Prof. Gordon's comments. Oh, and either mute your sound before clicking through or be prepared to click the "no sound" control to the left of the page header.

Sorry, no easy answers.

TRUTH 101 said...

I am admittedly less informed and knowledgable on may issues that you JBW.

I'm asingle payer guy but who cares about that now. What needs to be done just needs to be done. Reform is stalled by the thugs who only want to protect the insurance industries profits. It's good to see Obama finally taking it to them.

JBW said...

I'm not expecting any easy answers on this issue. Thanks for commenting so extensively everyone.

eclecticradical said...

I have written on this topic quite a bit on my blog, and so has Ron Chusid (who is a doctor, where I am just a crazy anarcho-socialist) on his excellent Liberal Values blog. We don't completely agree on all issues, but he says very cogent things about health care reform of which everyone should be aware and explains (from the doctor's side of things) just why it really is necessary here.

I favor thoroughly socialized medicine for economic reasons, which stand up fairly solidly and work on many of the same theories as the shared cost theories behind insurance, with the profit factor eliminated. We buy insurance to share the cost of health care with others buying insurance. But in the individual cost-sharing pools are too small to completely cover the cost of health care and to allow the provider to make a profit, except at the very highest premium rates paid by those who can afford them and can afford to pay whatever 'flexible spending' comes up without assistance. As someone who's had to deal with the 'flexible spending' offered by insurance companies, I can tell you trying to get them to actually honor it is likely to make you sicker than whatever required you to use the flexible spending. ;)

On the flip-side, socialized medicine means one pool in which every medical consumer shares the costs. While this does NOT (despite the claims being raised by many reform advocates) lower the actual cost of medical care it does lower the individual consumer costs and the point-of-service costs because everyone is paying into the system through their taxes. For this reason, it also allows the system to support those unable to afford insurance under our current system.

This is not and should not be a matter of 'the rich' paying for 'the poor.' It is a matter of society cooperating so that all its members receive access to medical care at the lowest cost. The government is the means by which society does so, but the responsibility is that of the society rather than the government.

Obviously, I advocate socialism pretty strongly in this area. It is the most efficient and lowest cost method. However, the same results can be reached for higher costs if one does not trust the government. In France and Germany, health care is a right and the industry is maintained on a non-profit basis. Individuals pay what they can afford to pay on a sliding scale, with the government picking up the costs when necessary, but the government does not control the machinery of health care. In Sweden, a strong socialized system and a strong subsidy system support an equally robust for-profit system for those who wish to pay for it.

All of these options, the purely socialized option, the purely private non-profit option, and the hybrid system, fulfill the same goal. Ultimately, the socialized system is the cheapest and the most economically secure, requiring the smallest tax increases (it is a simple matter of a dedicated tax that would replace all insurance premiums.) The others require more significant income tax hikes.

The point, however, is to fix a system that only serves to make letting sick people get sicker more profitable.

For those interested, Ron Chusid's Liberal Values is conveniently linked on my own blog, which is easily accessed through my OpenID. :)

JBW said...

Very thorough eclecticradical, thanks. And for anyone who's interested Liberal Values is already on my blogroll to the right.

Anonymous said...

I'd like to know which foreign healthcare provider is better than the Mayo Clinic or Johns Hopkins? The quality of US healthcare is the best in the world period. The WHO ratings are a farce with subjective weightings given to statistical catagories with no real bearing on the quality of healthcare given. Seriously if you had cancer you would go to the nation ranked 36th over the US? Strange how people with means who advocate social medicine choose US healthcare over the 36 other nations "ahead" of us. You wouldn't ever see Nancy Pelosi take her 97 million to France for cancer treatment, she would be first in line to UT Texas or Mayo.

JBW said...

Anon, your empty declarative statements make me suspect that you know very little about the health care industry beyond saying "We're #1!" and trashing a ranking system you disagree with.

And by stating that people with means can get great health care here you're making the same point I brought up in my post. Yes, I'm quite sure that millionaires from every country have good health care because they have money.

There's a restaurant in my town that sells a $50 hamburger made with Kobe beef and foie gras. It's probably better than any burger I've ever had but most people will never get a chance to try it because they can't spend that kind of money on a burger. I'm sure Nancy Pelosi and foreign heads of state could afford two of them at one sitting.

We spend more than twice what any other country does on health care and while they cover everyone while we fall 45 million people short. On top of that, we're less healthy by most objective measurements (here's but one example).

Take your tired Republican talking points and do some actual research as to how the health care crisis in this country is destroying countless lives and then come back and talk to me.