Saturday, March 18, 2006

A right, not a privilege, cont.

Michael Kinsley suggests, wisely, a more moderate approach to health care reform than what these guys suggest. (I linked to the latter article in the comments to this post earlier in the week.)

If you're not as hopeful as Krugman and Wells about being able to avoid rationing, you face the question: Should people be allowed to opt out of rationing if they can afford it? That is, if the system (private or single-payer) won't pay for the $100,000 pill, should you be able to pay for it yourself? Fear that this would not be allowed helped to kill the Clinton health-care reform 13 years ago. But explicitly granting some people life and health while denying these things to others is hard, even though this disparity has existed throughout history and is probably unavoidable. In fact, a serious defect of single-payer is that it makes all sorts of unbearable trade-offs explicit government policy, rather than obscuring them in complexities.

There are the makings of a deal here. Better-off or better-insured people could be told, individually or as a group: Give up your health-care subsidy, and you may opt out of any rationing-type restrictions that the system imposes. And if a few smaller reforms like that don't work, maybe, it will be time for single-payer.

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Blogger Sean McDaniel said...

Interestingly, the Trib recently ran an article about the Swiss health care system ( Yes, everyone is required to be insured, or pay heavy penalties otherwise. According to the article the costs are

"for a family of four about $8,167 a year. An American family with employer-provided health insurance pays an average of $2,713 a year in premiums, according to a survey by the Kaiser Family Foundation."

Hey, lucky me. I'm self-employed now and pay more than $10,000 out of my own pocket. So, I'd get to save about $2,000 a year under that sort of plan. But, still, I can afford it — either way. But can a family of four making $32,000 a year in Pittsburgh really pay that price? And what about a family of four near San Francisco making $40,000?

Overall the article cites the Kaiser survey as reporting that U.S. employers kick in an additional $8,167, for a grand total of $10,880. Again, that's pretty close to what I pay on my own.

So the big question is this, what the hell does it matter to me, or any other self-employed person, if everyone in America has health care insurance?

Maybe that question sounds a bit selfish and callous. But it's honest. Because as long as medical advances occur (and doctors continue to be among the most affluent people in our midst), will any plan make a difference in reducing skyrocketing medical costs?

As for those tradeoffs in care under a single payer approach, I'm glad I don't have to play God and decide which poor sucker might not get the treatment he (or his kid) needs. Who says it doesn't pay to be rich (or at least semi-affluent)?

Oh well, I have to go flip my Billy Bragg Workers Playtime LP to side B...or I'll forever be waiting for the great leap forward.

4:16 PM

Blogger Jonathan Potts said...

If we had a Swiss-style system, without employer-provided health insurance, the government would most likely have to step in initially to help many people pay for their health care. In the long run, however, I suspect salaries would creep up, at least in many industries, since health insurance is part of employees' compensation package. This certainly would not happen overnight, nor would it happen across the board. Some companies that are being bankrupted by health care costs would need the money just to stay afloat.

The advantage to requiring everyone to have insurance is that it guarantees that young and healthy workers would be paying premiums to support those who are older and sick. That, in turn, would drag down the costs of medical care. The whole purpose of insurance, after all, is to pool risk.

As Kinsley suggests, we could certainly allow the affluent to purchase coverage or services above and beyond the national health care plan. The thing to remember is that people already are sacrificing medical care, even without any kind of rationing. Those without insurance, or insurance with high deductibles, are skimping on the kinds of low-cost, preventative measures that could spare costly procedures down the road.

8:29 PM

Blogger Sean McDaniel said...

Okay, I've heard the trickle down theory before. When employers don't have to pay burdensome taxes or enjoy increased revenues and profits, they pass along the profits to employees in the shape of better wages or by creating more jobs. Honestly, I can't see many employers saying to their charges, oh sure, I'll gladly give you an $8,000 right now! Actually, I can imagine many businesses professing to plow those former expenses into "growing" the company, and no one seeing any pay boost anywhere close to what the employer paid in health care costs. Sure, I'm cynical. With good reason. Wal-Mart makes a ton of money,doesn't offer much in the way of health care and pays employees little more than minimum wage. And that dump isn't alone. (By the way, I don't like Wal-Mart for aesthetic reasons —the interiors are too crowded and confusing and ugly and don't even get me started on the people, in general, who shop there).

I full well understand that health care costs can bankrupt a company, especially a smaller one. I'm a one-man show in my business, and can't even begin to think of hiring others, let alone offering some sort of health care.

As for everyone having insurance, I guess it hedges the bets and brings down the premiums, but as I said, I'm paying on my own what the average Swiss guy does. Well, we're at it, are we going to force motorcyclists to wear helmets? After all, studies show that serious injuries (and deaths) greatly increase in states where helmet laws are kaput. And do we ban all forms of tobacco use, because of that cancer thing? And do we nix coverage for people who are rock climbers, bungee jumpers, skydivers? The point is that we can really drive down costs if we legislate against dangerous behaviors...or refuse treatment if illness or injury was caused because the individual in need engaged in risky activities.

Now as for the un- and underinsured not getting necessary care, most studies show that income and education play as big as role in people not taking advantage of health services as other factors. Poorer, less educated people are far less likely to seek medical help, even when it's free and convenient. And that's not even taking race into account. Doctors, hospitals and medical procedures and terms can be daunting to even the most learned and affluent. For the those living on the other side of the tracks, the health care world is fraught with anxiety.

Still, even though, I got blasted elsewhere for this line of might be a start if someone tried something.

11:50 PM

Blogger fester said...

Jonathan --- one problem with Kinsey's piece --- pretty much every single payer health system in the world with the exception of Canada allows for over the top coverage. The French system is the most notable from my very limited real world exposure to single payer systems, but the basic set-up was to guarantee a basic level of care and competence and then if an individual wanted to buy out or buy-up they can. The Canadian system is an anomaly here in program design when compared to other OECD single payer systems.

Now onto Mr. MacDaniel's argument that this is primarily a cost shifting and cross subsidization argument. I disagree, for there are significant public externalities that are currently negative [under usage of preventative care, overreliance on acute and emergency care, 16-20% of all healthcare dollars being used on extra admin and cost shifting, lower workforce and labor mobility due to healthcare tied to employment, lower risk taking again due to healthcare tied to employment at an established company etc.] You are not paying on your own what the average Swiss family pays, you are paying roughly 25% more than the average Swiss family. A good chunk of that gap could be ironed out if those externalities are internalized and made positive.

3:18 PM


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