I was recently discussing the health care issue with a friend who offered me his own already written thoughts on the subject but does not wish to be credited. At any rate, what he wrote (forget that "Ivy") is the most comprehensive and thoughtful set of insights I have seen on this subject to date. So, from my BFF, here it is:
"I think it’s really one of the most important things we need to be concerned with, since it’s literally a matter of life and death for a lot of people, and is one of the most fundamental issues that faces every single person. I’ve spent a lot of time learning as much as I can about it, and have some recent and direct experience with some of the things that don’t work very well right now. If I’m missing something (which is quite conceivable) , it ain’t for lack of looking or thinking about it! Sorry to go on and on, but I’d be interested to hear your thoughts on a lot of these issues. Too much of this has been political talking points and rhetoric from both sides, too little on the actual substance. So, that said, here are some of my thoughts on the issue – this should help with that pesky insomnia!! (there will be a quiz after to see if you’ve read the whole thing!)
I’m a little surprised that you haven’t been able to find some of the info – my problem is that there’s so much (alleged) data out there that’s it hard to know what’s actually true. I look at tons of stuff from a wide range of sources, but am generally skeptical about data provided and interpreted by advocacy groups on either side of the issue. I try to find non-biased analysis (as much as possible) based on “official” data from the appropriate groups (either government and/or the insurance industry), because I think the credibility of the source is key. (It’s easy to find people who will confirm any particular pre-conceived notion, but all that does is make us feel good.)
I’ve attached a relatively short PDF document that I think does a pretty good job of reporting and analyzing the data for Medicare and private insurance, including a description of what their numbers mean and how they arrived at them. I’ve highlighted what I think are some key points. This study was actually done by the CAHI, which is an association of insurance carriers, so I think that if there is any bias, it would more likely be toward the private side. According to their web site, here’s who they are:
“The Council for Affordable Health Insurance (CAHI) is a research and advocacy association of insurance carriers active in the individual, small group, HSA and senior markets. CAHI's membership includes insurance companies, small businesses, providers, nonprofit associations, actuaries, insurance brokers and individuals. Since 1992, CAHI has been an active advocate for market-oriented solutions to the problems in America's health care system.”
They describe how they arrive at their numbers, and where the raw data come from, so it’s a pretty good background. Their conclusions are that the administrative costs are lower for Medicare than for private insurance. Medicare’s admin costs were 5.2% in 2003, projected to decrease to 3.3% in 2010 (the study was done in 2006). Private insurance admin costs remain pretty constant, and can be looked at in one of two ways. If you exclude taxes, commissions, profit, etc, the costs are 9%. If you include these costs, then admin accounts for 17%.
The latter point is something that’s often used when someone’s trying to argue that the comparisons are unfair. “well, Medicare doesn’t have to pay taxes, make a profit, spend money on marketing, etc…”. The numbers in this study compare costs both with and without these costs – in both cases they find that Medicare still has lower admin costs. Secondly, it’s not about whether these costs are fair or whether these costs are justified (let’s stipulate that it’s perfectly fair and reasonable for a private company – I’m a capitalist, too)– it’s about how much actual health care (i.e. claims paid) is provided for each dollar that goes into the system.
A few other general tidbits (in no particular order) that I think are important when considering the state of health care, what we should do about it, and to what extent the government should be involved.
1. We hear lots of people say “we have the best health care system in the world”, but seldom do you hear anyone support that assertion with facts. While I agree that the US has the best technology, many of the best doctors, and the potential for the greatest health care for individual procedures, that’s not the same as having the best health care system. As a whole, there are some relevant facts that paint a different picture. These kinds of statistics are widely available. This is from Wikipedia, which includes the supporting references for these points:
• At least 15% of the population is completely uninsured, and a substantial additional portion of the population (21%) is "underinsured", or not able to cover the costs of their medical needs.
• More money per person is spent on health care in the United States than in any other nation in the world
• a greater percentage of total income in the nation is spent on health care in the U.S. than in any United Nations member state except for East Timor.
• Despite the fact that not all citizens are covered, the United States has the third highest public healthcare expenditure per capita.
• A 2001 study in five states found that medical debt contributed to 62% of all personal bankruptcies. Since then, health costs and the numbers of uninsured and underinsured have increased.
• The US pays twice as much yet lags behind other wealthy nations in such measures as infant mortality and life expectancy
• the U.S. has a higher infant mortality rate than most of the world's industrialized nations.
• The USA's life expectancy lags 42nd in the world, after most rich nations, lagging last of the G5 (Japan, France, Germany, UK, USA) and just after Chile (35th) and Cuba (37th).
• The World Health Organization (WHO), in 2000, ranked the U.S. health care system as the highest in cost, first in responsiveness, 37th in overall performance, and 72nd by overall level of health (among 191 member nations included in the study).
• A 2008 report by the Commonwealth Fund ranked the United States last in the quality of health care among the 19 compared countries.
• According to the Institute of Medicine of the United States National Academies, the United States is the "only wealthy, industrialized nation that does not ensure that all citizens have coverage" (i.e. some kind of insurance). The same Institute of Medicine report notes that "Lack of health insurance causes roughly 18,000 unnecessary deaths every year in the United States." while a 2009 Harvard study published in the American Journal of Public Health found a much higher figure of more than 44,800 excess deaths annually in the United States due to Americans lacking health insurance. More broadly, the total number of people in the United States, whether insured or uninsured, who die because of lack of medical care was estimated in a 1997 analysis to be nearly 100,000 per year.
2. Public option/single payer – this gets a lot of people saying there is a “government takeover of healthcare”. First of all, only very few of the most liberal Dems were seriously pushing for a single-payer system, which could maybe be called a “government takeover”. This was never seriously considered even by the Democrats, was not included in any bill, and is not part of the final bill. A public option, on the other hand, was included in the House bill but didn’t make it into the final legislation. The public option as discussed would have allowed people a choice of buying into a government-managed, non-profit health insurance system (ala Medicare), but would not have required anyone to change from their private insurance if they don’t want to. This has been mischaracterized all over the place. I want to see a public option, even if it is simply to allow people to buy in to Medicare at cost, and with the same conditions as Medicare has today. No exclusions for pre-existing conditions, no dropping people when they get sick, etc. This would give people an option (hence the term) to stick with what they like or go to the public plan, which will put pressure on the health insurers to provide better, more cost-effective service. It would cost the taxpayer nothing (taxpayer subsidies for people who can’t afford it are a different issue), and would not require people to change anything if they didn’t want to.
3. Some people can’t get health care at any cost, or it is prohibitively expensive (particularly for individual plans), or they get bumped when insured. I know this personally, for a fact, and anyone who says differently doesn’t know what he’s talking about. The health care bill tries to make sure that everyone can get health insurance (all via the private sector, since there is no public option), and the regulations necessary to keep the insurance companies in line are extremely complicated. This will be an enforcement nightmare. I believe that a public option would allow people to “vote with their feet” if they don’t like the service they are getting from their private insurers, and the need to impose so many regulations could be drastically reduced. Ironically, despite the fact that this would involve the government, I think this is much more in keeping with a free market philosophy than trying to regulate a private industry.
4. Obviously you know this much better than I do, but my understanding is that Medicare payments to providers are much less than from private insurers, and is not equally applied in different areas. I think this is a very valid concern (see, I actually do respect your point of view! ) and it should be addressed. From my perspective, this is about the only valid objection to having a public option, but I don’t think it’s a sufficient reason to deny people the option of coverage (sorry!). Question – if there were more people with insurance who could afford to come to you, and you got paid the same amount, wouldn’t that be a good thing?
5. Death panels – this was a completely ridiculous diversion that anyone with half a brain should know is not true. For decades, every administration of both parties has encouraged people to consider and make their end-of-life wishes made. The only thing the reform bill said (I’m pretty sure it’s actually been taken out, which is a real shame) was that insurance should pay doctors for their time in consulting with patients – that’s it. I would think everyone (particularly health care providers, maybe not insurers) would support this big time. This has never been the least bit controversial until Sarah Palin and a bunch of Republican leaders and people in the conservative media started talking this way. Regardless of anyone’s thoughts on the health care bill, this was a completely cynical way to scare people away from supporting reform, without any basis whatsoever in fact. Even Chuck Grassley, who was the lead Republican on the senate committee negotiating the bill, was out there talking about “pulling the plug on Grandma”, which he knew was completely false. Honest disagreements are one thing, but this was shameful.
6. Individual mandate – this is the basis for a lot of threatened law suits by state (Republican) AGs . I understand why this was included in the bill (get everyone into insurance so the risk can be spread to a larger pool), but I disagree with the approach. To my knowledge, this is the first time the government has required citizens to buy a product from private industry. (By the way, lots of people who support this approach use the “Oh, it’s just like car insurance. The government says you have to buy that from private companies.”. This is a terrible analogy. You only have to buy car insurance IF YOU WANT TO DRIVE A CAR. I guess you only have to buy health insurance if you want to breathe.) In my view, if the government requires you to pay for something, the government should be required to provide the service (or at least an alternative), and the payment is called a tax. Nobody likes taxes, but that’s how government is supposed to work. This is another argument for the public option. You shouldn’t require anyone to pay for insurance if the only option is the private sector and there are no limits placed on what they can charge or how they treat you. I actually agree with a lot of Republicans that this seems unconstitutional. The irony is that this idea was originally formulated, proposed, and promoted by conservative Republicans back in the early 90’s (including the Heritage Foundation, Chuck Grassley, and many others who currently oppose it) as a rebuttal to “Hillary Care”. It was apparently a good idea then, now it’s unconstitutional and a threat to our freedoms.
7. “You’re going to jail if you don’t buy insurance”, “the IRS is going to hire another 16,000 agents to enforce the individual mandate.” Same as #5 above. This is complete baloney that has been echoing around all over the place. Neither of these thing is true (never have been), and in fact the bill explicitly precludes any meaningful enforcement against people who don’t comply with the individual mandate. No jail, no additional IRS agents, nothing.
8. “If we have government-provided health care, it will put private insurers out of business”. Nonsense. Another fallacy about the public/private sector debate is that a public healthcare option would run the private insurers out of business. I haven’t heard any actual factual support for this assertion. One obvious rebuttal is FedEx and UPS vs the Post Office, which is fair enough. The government provides a critical service, the private sector provides an alternative and can make some money, too. Good deal for everybody. I think an even better example is our university system, which is almost indisputably the best in the world. There are state schools and private schools. State universities cost maybe $10,000/yr, some private schools well over $50,000. The government provides a certain level of service for a good price, private schools provide a different level of service for more money, available as an option for people who want to pay. This system has worked incredibly well for 200 years, and I don’t think the Ivey League, or MIT, or Stanford, are worried about going out of business because of UMass, Penn State, or UCLA.
Summary (yeah!)
I think when we as a society talk about this issue, it really comes down to a few major philosophical areas of disagreement and/or discussion, and a few other issues of implementation.
Maybe first and foremost, should health care be considered a right or a privilege? I have real problems with the argument that it is a privilege, based on someone’s ability to pay. We accept as a given that we have certain rights as US citizens – right to free speech, right to bear arms, right to privacy, etc. That’s great, and as it should be. The Declaration of Independence says “all men … are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” First among these rights is Life. At the most fundamental level, I simply don’t understand how, from either a moral, ethical, religious, or legal/constitutional standpoint, we can make the case that citizens of this country should be allowed to suffer or die simply because of their financial circumstances. We accept the fact that the government provides all manner of protections, including military, police, fire, legal representation, etc, for the general good of society and for the right of the individual. This is what makes this country unique. Even a homeless person (even a homeless non-citizen!) is entitled to police protection, or to a lawyer if charged with a crime – there is absolutely no requirement that they be able to pay as a condition for this protection. I content that access to health care is more important than any of these. It affects every single person at some point, and can literally determine whether they live or die.
Role of government and the private sector. This is an important issue, and well-intentioned people can certainly disagree. These days, there is a real anti-government sentiment, much of which is well-deserved, although cries of tyranny are ridiculous and hysterical (Obama is president as the result of an undisputed, democratic election as required by the constitution. “Patriots” of all stripes should not only accept this but support it and demand it be respected and upheld. The fact that one don’t like the results of an election doesn’t make it a dictatorship or a threat to liberty and freedom.) Nevertheless, any government has a role to play, and to simply rail against it as evil in every case is unreasonable and counterproductive (and in many cases, completely hypocritical or at least uninformed). “Keep the government out of my Medicare” is a pretty good example that I’ve seen pretty often. Again, the government plays an important role in police, fire, military, homeland security, transportation, food safety, infrastructure, etc, and few would argue that. In some cases it’s because it’s always been that way and we can’t imaging giving it up, in other cases it’s because something important has to be done and the government is in the best position to do it (air traffic control system, immigration enforcement, etc). There are places where the profit motive is desirable and appropriate, and places where it’s not. I don’t believe the government should be determining how cars are built, and I don’t believe the private sector should be determining if and how parents can care for their kids, whether people can vote, or whether we go to war or not. Despite the chants of socialism and analogies to Hitler (I’m pretty sure he won’t be reviled for all of history because of his health care policies), people from virtually every other advanced country in the world are flabbergasted by the fact that we question the right of our citizens to have healthcare. Not every other country is a bunch of commies. I separate the issues of profits for insurance companies from the profits of actual health care providers (i.e. – you and other doctors!). In my view, we need doctors and they should be compensated appropriately based on the market, but if everyone were to have a right to health care, health insurance would be restricted to those who want extra services and are willing to pay for them. Although people can buy private security protection if they wish, the rest of us don’t need to go through for-profit “police insurance” companies for our basic protection.
If I Were King of the World (or the US at least): My Idea for Health Care
1) assumption: for the good of society and the individual citizen, and for moral, ethical, and pragmatic reasons, everyone has access to health care as a fundamental right. The US pays dramatically more for health care than anyone else, covering fewer people and with less positive results, and the rise in costs will bankrupt the country if we don’t make fundamental changes. The current system is having a devastating effect on both the insured and uninsured, and on the overall economy.
2) government cannot mandate that people buy services from public companies
3) government provides a non-profit Medicare-like system that anyone can choose instead of (or in addition to) private insurance if they so desire. This plan will contain a basic level of service, as well as catastrophic coverage. Anyone who prefers private insurance can continue with their current coverage with no interference by the government. The plan will be based on private providers as today (not single-payer, government employed doctors)
4) private insurance companies can deny coverage if they choose, but cannot refuse coverage (no rescission) for a paying customer who is already in an insurance plan
5) the government plan (for every citizen) will be paid for by general taxes (ala Medicare and Social Security now). However, to enable people to maintain their existing private coverage if they choose (and to avoid having to pay for something they don’t use), deductions and/or tax credits will be provided to those who show proof of other insurance.
6) payments to medical service providers for the government-run plan must be evaluated to ensure efficiency, fairness, and incentive. No provider is forced to accept the government plan.
7) subsidies are unnecessary, as general tax revenue ensures basic coverage for everyone.
8) if you disagree with #5, then at least people can buy in at cost, and some subsidy is provided for people who can’t afford it.
FINI!"
Let it not be said that there are not at least a few who are informed and thoughtful. Makes me feel as if there might yet be hope.
