The Token Conservative health care approach

I have had people ask me what I would propose regarding health care. I suppose that it is easy to be critical of things but more difficult to provide alternatives. Ultimately, people get tired of mere carping and nay-saying.

My first instinct is to say, “Nothing. Things are imperfect, as with all human endeavors. But they’re tolerably well, and as good as, or better than, any demonstrated alternative.” But maybe there is some room for improvement, in the details, though not the foundation. The problem is that I am not a health care expert, so my criticisms and proposals are based on things I have read, my own life experiences, and a basic ideological orientation that asserts that, in the absence of strong countervailing community interests (including fundamental moral positions), decisions that affect oneself are best left to one’s own choice. I believe that on both ethical and utilitarian grounds. I say”ethical,” in that, as autonomous, equal, rational, and rights-bearing creatures, we are, in the first instance, entitled to make decisions without control by others in matters that affect us. The more those matters affect us and the less they affect others in degree and numbers, the greater our claim to autonomy. Unless someone is a child, an incompetent adult, or a person who has opted to transgress against fundamental moral norms of the community embodied in certain criminal laws, I as an individual, or we as a community, have no inherently greater claim to the right to decide matters of personal autonomy than the individual himself. None of us is more of an autonomous, rational, and rights-bearing individual than others. Thus, decisions made by individuals are more likely to be “just” in promoting a life of fulfillment for each of us and in achieving a harmonious balance among members of the community by emphasizing voluntary agreement, not coercion.

I say “utilitarian,” in that decisions made by individuals are more likely to reflect the greatest good for the greatest number, as well as the best weighing of offsetting “pains” and “pleasures” by and for each individual. As has been shown in theory and practice, on matters of such individuation involving great numbers of persons and situations, the information necessary and the precision of communication required to have an outside planner make these decisions far outstrips our ability to gather and evaluate. Again, there may be issues where the effect on others is so widespread and so direct and palpable that outsiders are as able (and perhaps better able) to gather and evaluate that information than any particular individual with his or her closer horizon of experience. But health care is not such an issue.

On to the details. I’d like to see more of a return to consumer purchases of medical services and competition for consumer dollars. The elephants in the doctor’s waiting room are the insurance companies.

There is certainly a case to be made, though not overwhelming, of excessive insurance company power. Talk of some quasi-oligopolistic market structure and resultant social damage is overdone, however. Most people surveyed by far are happy with their own insurance coverage, with a significant plurality describing themselves as very happy. Their concerns about the delivery of health care are rooted in the scare tactics employed by self-serving politicians, power-seeking bureaucrats, ideological Leftists, and sensationalistic media outlets regarding the fates suffered by often carefully-culled and manipulated “victims.” Moreover, American medicine produces far more innovation in technology and pharmaceuticals than the rest of the world combined. That world, by the way, typically “free rides” significantly on American skill and ingenuity, thereby lowering their own medical care cost. American medical services avoid the indirect economic and social costs from which socialized systems inevitably suffer, economic costs imposed by scarcity in the form of long lines and lost wages, and social costs from the pain and disability that results from delayed treatment. I have previously posted about personal experience my family and I have had in such matters. Efficient delivery of service, happy clients, and product innovation are not the things economists associate with monopolistic or even highly oligopolistic market structures. If one wants to see the evils of monopoly in action, one is better served to go to government enterprises, such as the government school systems, for example, or Medicare.

But let’s assume that there is a problem of insurance companies inappropriately interfering in medical decisions between doctors and patients, a problem my family and I have never experienced, and one that I believe is far less significant than with the ’90s-era HMOs that were the least great answer to rising health care costs (and the worst characteristics of which would be undertaken under Obamacare, but in the hands of government bureaucrats). First, break down state interference with insurance company competition. I have read in several places that there are many hundreds, perhaps a couple of thousand, insurance plans available. If interstate competition were opened up, it is likely that more would be formed. Congress could do that with legislation.

Second, get rid of the preferential tax treatment of employer insurance plans. That was a development of World War II when government (here we go again) distorted the labor compensation market by imposing wage controls. Employers could compete with each other for skilled labor not through wage rates, but through benefits. Labor unions liked this, as did insurance companies. So (here we go again), big business and big labor approached big government for help. And, of course, got it.

That change in tax treatment itself might induce competition. But, if tax policy is to be employed, I would have large health savings accounts (without the ridiculous forfeitures imposed under current law). People could buy whatever insurance plans they want. If that is too much individual freedom for liberals, the government could limit such tax-advantaged plans to high-deductible catastrophic medical plans. Also, limit medical insurance to just that, medical treatments, to reduce the cost of coverage, just as car insurance covers catastrophic events, not ordinary oil changes and battery purchases. No acupuncture, massage, herbal treatments, homeopathy, chiropractic, psychotherapy and counseling, medicine men, midwives, new age healers, etc., many of which now must be covered by insurance carriers as different interest groups lobby for their piece of the pie. If someone wants those treatments, they are free to get them, perhaps through their health savings accounts. Otherwise through their regular funds.

Third, and related to what was described in the preceding paragraph, eliminate government mandates on insurance plans that increase the cost by requiring coverage for exotic services. Moreover, many of the mandates include coverage that younger, healthier people will not use but that they have to pay for, thus subsidizing the older subscribers. Allowing more insurance plan discrimination, that is, individual choice and tailoring of the policy to one’s needs, will reallocate costs of coverage to the true beneficiaries. Those market-distorting mandates also cause more younger people to forgo insurance altogether to avoid paying these subsidies.

Fourth, tort reform. Limit pain and suffering and other damage awards for medical malpractice that are not directly tied to hard economic evidence. Same for product liability actions against drug makers. Limit or eliminate punitive damage claims in such suits. Limit lawyer recovery in such suits, especially if brought on a contingency basis. While student loans are high for law school graduates, there is no need for lawyers to recover large percentages of dubious multi-million or even billion dollar judgments. Institute a “loser pays” system, with liability under more circumstances than today for lawyers who bring frivolous suits. Perhaps have arbitration of such lawyer liability before panels of doctors and lawyers?

Fifth, for those who cannot afford such plans, various options are available. The most obvious are vouchers. Medicare and Medicaid programs are in trouble, and without effective subsidies from a private sector released from regulatory shackles, would be even more so. I don’t know what the answer is. Perhaps it is higher reimbursement rates and a structure based not on fee-for-service. Obviously, that runs the risk of higher costs. Perhaps some rationing is the answer, where the types of services covered are more restricted, especially under Medicare. For those who can afford it, private supplemental insurance works. Medicare/Medicaid already is a socialized system with a shortage of doctors, hidden costs like waiting times, fraud, and bureaucratization. One can try to make it somewhat more efficient, but those efforts are constrained by the structural limitations of such a system. That certainly does not justify efforts to expand it to embrace everyone equally within its misery. Not that equality really exists in any socialized system. There are always those who cut to the front of the line, and graft is assured. Poverty, as a relative concept, will always be with us, and its existence for some is no reason to threaten us all.

I actually agree with those who say that health care is a right, but likely not in the way the supporters of Obamacare see it. Health care is a right in the sense that you have the right to decide your health care to preserve your life and well-being as you deem appropriate. Therefore, any interference by government with your autonomy and choices (such as the de jure or de facto imposition of single-payer health insurance) is an interference with that right and a threat to your life, health, and liberty. But you have no “right” against your fellow citizens for subsidies (indirectly by favorable tax treatment or directly by a “public option”). Of course, your fellow citizen may (and should) help you if you cannot afford essential health care, by providing free services or making charitable contributions that make services financially possible. But, as I said, if we want to continue Medicare/Medicaid, I have no fundamental objection, except to their expansion. However, limitation of their scope is urgently needed.

Health care costs are going higher, inevitably, as the population ages. It is that fact, not greedy doctors or drug or insurance companies that is the cause for the projections in the growth of health care costs. An additional factor is, ironically, technological and pharmacological innovation that causes everyone to want the most advanced treatment, before it has become more routine and less expensive.

As an aside, if we are really interested mainly in cost containment, focusing on more preventive care, ironically, seems not to be the solution to lower the cost of health care. I have read about studies that show that, on a macro level, population-wide preventive care is more expensive than actually treating an ailment once it appears in the relative few it will affect. Moreover, the increased rate of death for those for whom the ailment is not caught will decrease, however slightly, the cost of providing health care for the aged. On the other hand, at an individual level, those additional deaths may well be a collection of personal tragedies that impose an indirect cost we are unwilling to bear, yet.

There are probably many other private choice-oriented changes that can be made to improve competition and efficiency, while promoting the ability of the patient and the doctor to choose the most appropriate treatment. But the answer is not to replace the relatively well-functioning current system with a universal version of the one part of the current structure that indubitably is failing, Medicare.

Some foolishly argue that we spend a higher percentage of our GDP on health care than does, say Canada, yet we have an average life expectancy that is a few months less. Let’s leave aside the fact that Canada is much more racially homogeneous and has a far smaller population than the U.S. Let’s leave aside the ubiquity of Canadian license plates on vehicles in the parking lots of U.S. hospitals. Let’s leave aside the Canadian Supreme Court’s decision that the interminable waiting times for procedures under the Canadian system made the effective ban on private insurance for treatment in Canada unconstitutional. Let’s leave aside the by-now commonplace stories of a lack of facilities in Canadian hospitals that requires patients to be flown to the U.S. for treatment. Let’s leave aside the indirect costs on the economy from productive hours lost sitting in waiting rooms. Let’s leave aside the shortage of doctors, especially specialists. Doubtless, such costs contribute to the traditionally higher structural unemployment and lower standard of living in Canada (and Europe).

Let’s simply ask such doubters of the private health care system what they make of the fact that the American system of government schools spends more per pupil than any other Western country but one, yet gets far worse educational results. Or that private schools in the U.S. spend far less per pupil than government schools, yet get far better educational results. Would such an aficionado of government control agree that, therefore the American system with its powerful teachers’ unions is irretrievably broken? Or would he come up with a myriad of excuses?

What about the fact that we spend more on our military than does Canada? Are we safer than they, who hide behind our military shield that subsidizes their security in much the same way the availability of the vibrant American health care system hides the failures of the Canadian? If not, should we spend as little as they do?

Then there are those who rant against the fact that insurance companies, drug companies, and doctors (remember Obama’s press conference where he talked about the doctors running around doing unnecessary tonsillectomies, presumably seizing unsuspecting unfortunates off the street?) make a profit, and who want to provide everyone with equal care as a matter of “right.” They praise the government plan because it would have lower costs in that there wouldn’t be those nasty profits. Let’s leave aside how those folks feel about cutting their “excess” wages, which are, after all, profits from their labor, at least after an allowance for basic food, clothing, shelter, and medical care. Let’s leave aside the inevitable costs of government programs through bureaucratic inefficiencies, graft, and expansion of coverage. I would say that food and shelter are even more basic “rights” of the sort those liberals mean by the term than is health care. Do they propose that we eliminate the private, profit-driven production and distribution of food? Or of shelter? I believe that was tried in a massive social experiment. It was called the Soviet Union. There are still smaller versions of that experiment. They are called North Korea and Cuba (though the latter is making noises of privatizing aspects of food production for greater efficiency and productivity). If such an approach is laughable in the providing of food and shelter, why would it work any better in the providing of health care? Or anything else?