Your Lying Eyes

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26 September 2007

Hillary's Lame Health Care Proposal

Alright, I admit it, I have not looked into her healthcare plan at all, and so only know what I've heard about it on NPR, which I think is enough. I don't like these "reforms" that merely make holding insurance mandatory with some subsidies to help make it more affordable - which subsidies would no doubt never be available to anyone we actually know - and tax credits that will be offset by other tax increases. These proposals don't really address the real "problems" with the current systems (the scare quotes are not meant to deny that there are problems, only that whether or not a particular problem exists is entirely based on one's own circumstances or ideological persuasion).

The problems with our current systems are as follows:
  • Inequities in coverage and delivery result in some people getting better care than others
  • Some people (usually marginally-employed young adults) prefer to take their chances without insurance, but no one expects them to do without medical care if they can't afford it
  • Privately purchased insurance can be hideously expensive for some people with poor health histories, or for people with low incomes
  • Health care of some sort will be provided in many cases no matter what, so the cost of the uninsured is spread out among the general population in some manner
  • Health insurers need to aggressively control their costs, which (besides incurring significant additional administrative costs in and of itself) results in refusals to cover many procedures that doctors and patients feel are necessary
  • The competetive nature of the insurance industry (combined with the uncertain causality behind most illnesses) provides little incentive for insurers to cover or encourage preventative treatments
  • Providing health insurance to their workers puts American businesses at a disadvantage when competing with companies from nations with public financing of health care (i.e., pretty much the world)
Similar problems to the above exist in other insurance businesses, but unlike life insurance or property and casualty, medical care is considered by most people to be a "right" - something that cannot fairly be denied.* Life insurers, for example, manage to aggressively weed out high risk clients - or charge them many times the rates charged to healthy insureds - without even a peep from a single Democrat. Health insurance is a different animal entirely. And so we are at the point where health insurance must be reformed.

But the situation we have now, for all its drawbacks, is the result of the continuous and unseen adjustments and refinements of the free market - the system of market pricing and profit motive that works everywhere else in the economy. True, there are a number of market distorters in the healthcare business - the god-like status of doctors, the lack of information available to consumers, rampant interference from government - that makes this system sub-optimal. But within these restraints, we can expect that the system - as it is set up - is functioning the best that can be hoped.

Which means it's a bad idea to tinker with it, to try to "tune it" so to speak. It can't be done - the government cannot "tinker" and hope to make things work smoother. Basic regulation - pollution controls on smokestacks, for example - can be enacted because it simply lays down an exogenous constraint that the market can work around. But if the government decided that factories needed to run more efficiently and proceeded to prescribe certain work procedures - that would be disastrous (though granted, given the decimation of our manufacturing sector of late, it could hardly have been much more disastrous).

So if reform is inevitable - and I believe it is - what's needed is to tear the whole system apart. Not the part about medical school and licensing - though maybe some changes can happen there - but the whole concept of a private health market. We need to basically establish Medicare for all, and do away with private insurance and private funding of insurance. Many - perhaps most - will suffer some degradation in their medical services - but that's inevitable anyway given the unsustainable increases in health costs. If we are to insist that everyone has access to quality health care, what's the point of having multiple health insurers to administer it, with their armies of clerks to monitor primary-physician referrals and deny preventive care treatment? Even assuming much lower government-employee productivity, the administration costs will be less under the single-payer system.

I'm cautiously optimistic that government run health coverage will not be disastrous primarily for one reason: you never really hear Europeans or Canadians complain about their systems, and people love to complain about their government. Oh, sure, you read some horror stories in conservative journals, but I've talked to a number of actual real-life middle class Europeans, and they have nothing bad to say about the health-care system they live with. And of course foreign corporations don't have to pay for their workers' health care, giving them an advantage over U.S. businesses. Tinkering with our current systems won't help that.

Of course the U.S. is neither Europe nor Canada, and we have demographic issues that could challenge such a system, namely large self-identified dependent classes which will exacerbate resentments between those who view themselves as supporting the system and those who view themselves as entitled to it. But is it much better now with Medicaid and the use of emergency rooms for routine care?

So that's why I oppose Hillary-style reform, and would prefer either to keep it as it is (with perhapse some tax credits to encourage voluntary purchase of insurance) or a single-payer systems - i.e., Medicare for all. The only thing that bothers me about supporting a single-payer system is that it means I agree with Paul Krugman.

* Although with P&C it sometimes treads into this territory, as with the controversial denial of coverage to Katrina flood victims - controversial despite the clear wording of the signed contracts. Auto insurance can be a hot topic, as well, and is usually mandatory, but the cost is much lower and the American car, as mythologized as it is in our culture, is not considered a "right" by the left, who consider it more of a vice.

Related:
Steve Sailer's review of Michael Moore's Sicko.
Krugman's NYRB article, where he strangely blames all the problems on "adverse selection," a problem in insurance generally.
Economist Robin Hanson's proposal that we cut medical spending (and care) in half.

3 Comments:

Anonymous Trilby said...

I found Krugman's article pretty informative, since I didn't know much about how the American medical system works.

With an ageing population, greater obesity and an influx of low-grade immigrants, things aren't looking too rosy.

September 27, 2007 8:20 AM  
Anonymous Anonymous said...

Hey dad, when are you going to put Perez hilton as one of your links.
p.s. i don't think he will appreciate you're opinions however! haha

September 27, 2007 3:35 PM  
Anonymous Robert Blandford said...

Some might be interested in my approach to healthcare. It could appeal to both Republicans and Democrats and could be suitable for any country.

Government vouchers are put into individual health savings accounts from birth to age 21. There are mandatory deposits from wages into this account. These funds can be spent direct on health care and on insurance premiums.

Detail at www.plan.bipartisanhealthplan.com

September 29, 2007 12:51 PM  

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