Liberal Lion and Healthcare

I have been thinking about Ted Kennedy from this morning when my son commented about our meetings with him. These were brief "photo op" meetings but left an impact on all my sons. What made him memorable was that he was authentically personable and he spoke eloquently but with an economy of words. In some ways he epitomized the "great generation" that made America the envy of the world. I lament his passing to our generation that seems to have lost the qualities of (1) holding steadfast to beliefs yet be able to debate them and not call others who don't accept your beliefs pejoratives like "LOSER", (2) humility so we acknowledge flaws in ourselves (unlike Mitt Romney's planned book: No Apologies), (3) humanity to recognize that profit is not the only measure of happiness.

As the healthcare debate, if you can call the name-calling slugfest playing out at town hall meetings and airwaves a debate, gathers steam, the passing of Ted Kennedy is a serious setback for Obama. The primary reason for healthcare reform is not to cover the uninsured but to reduce the cost of healthcare to those who are insured. No one in this country is denied access to healthcare if they are uninsured--hospital emergency rooms are filled with uninsured patients every day. The cost of providing healthcare to the uninsured is paid by taxpayers and consumers since hospitals pass on their costs to Medicare and insurance companies. The spending spree on US healthcare infrastructure mirrors Japan's absurd spending on highways and trains, at some point the merry-go-round has to stop. The passing of General Motors and soon the Liberal Democratic Party in Japan is more than symbolic of these excesses.

So how did the most capitalist of nations end up spending twice per capita on healthcare than most developed nations with worse per capita health (as measured by obesity, longevity, etc). The market is not supposed to allow this and will certainly correct itself, right? On the contrary, we have set up the market so consumers believe that unrationed healthcare is a right and like all markets, producers (doctors and hospitals) are incentivized to sell consumers whatever they want. The key part of this equation is that the consumers not only believe that unrationed healthcare is a right, they also have no idea how much it costs. It is left to the insurers, including Medicare, to "negotiate" these costs with the producers. They don't need to negotiate hard as they can pass on these costs to consumers via insurance premiums and taxes.

The solution is simple, consumers have to directly feel the pain of the costs of healthcare that they are getting so they will self-ration care. The problem is that the only market mechanism to directly feel the pain is to pay for services rendered. Of course one could buy insurance just like one buys life or disability insurance. The problem is that many people, young and poor, will not buy insurance and will not be denied access to ERs. Therefore let us mandate "basic" insurance for all that includes disincentives for unhealthy lifestyle choices: obesity, driving too fast, riding a bike without a helmet (not completely tongue-in-cheek). The question is what does basic insurance deny you that premium insurance doesn't, eg would basic insurance allow "elective" surgery such as a kidney transplant? What if you were paying for basic insurance for years and then switched to premium just before an elective surgery, would that be allowed (a bit like signing up for AAA when your car is broken down so you get a free tow).

Anyways I am probably covering ground that many healthcare policy analysts have. The point is that that healthcare reform is complex and will need thoughtful debate on how it is implemented. The thought leader in this debate was Ted Kennedy and with his passing I dread the outcome. I especially worry that the purveyors of America is the Best are going to ignore Canada and Switzerland and even India in getting ideas of what works and what doesn't. America is best when it attracts the best brains and ideas from around the world and provides products/services to it venturesome consumers.

Comments

[term papers]

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[Jerry Kita]

Vinit ... lots of interesting thoughts and probably too many for me to comment on all. I will focus on the notion of mandating basic insurance. I agree with your premise that consumers need to "directly feel the pain" of the costs of healthcare. (That principal applies to a lot of things. I think of those folks who build homes in hurricane prone areas who know that FEMA will bail them out. Taxpayers end up sharing in the cost of rebuilding their homes). The natural reaction would be to mandate some basic insurance but I always struggle with whether that would be supported by the Constitution. On one hand I can favor the notion of having people deal with the consequences of their decision (choosing not to be covered) but there's also an argument to be made that the price of such a potentially poor decision is too high for the individual and probably society. Right now, I'm still not sure where I stand on it. Hope to see more of your thoughts on the health care topic.

[Dissertation Literature Review]

Blogs are so informative where we get lots of information on any topic. Nice job keep it up!!