Our healthcare system has a few problems.
It’s not in crisis, but there are some areas we could improve.
There are a number of people without health insurance, perhaps as many as 47 million, or 16% of the US population. It’s not clear whether that can be reduced to zero, or even if it should. Like the unemployment rate, the mobility of American workers will inevitably result in a bit of “friction” in the system.
There is some percentage of the US population which makes a conscious choice NOT to purchase healthcare. That number might be as high as 5%.
However, one of the most obnoxious elements of the healthcare bill now pending in congress has been the proposal to stigmatize, penalize, and forcibly enroll individuals who choose not to buy health insurance.
There’s been a charge that parts of the system are characterized by greed. There are for-profit healthcare providers, and for-profit health insurance companies, and they do seek to make a profit. This is not evil. The proper check on greed is competition, not government regulation.
In fact, it is impossible to eliminate greed by regulation. You can only temper, harness, channel, and control greed by creating a market in which there are incentives for efficiency. In short, the game must be structured so that greed impels competitors to seek to lower costs so they can increase their market share.
President Obama and the Democrats have set out to do just the opposite. They are about to replace a competitive market with a government-monopoly bureaucratic system.
The problems with the health care system are the result of too little competition, too much government regulation, and a structure that lets health care consumers spend other people’s money.
The solution proposed by the President will reduce competition, add government regulation, and allow health care consumers to tap and spend the resources of the federal government rather than their own.
It will make things worse, far worse, if it is adopted.
And the American people are beginning to realize it. Let us hope that Congress figures it out as well before they enact a system that would be a huge mistake that would likely wreck both our economy and the federal budget.
None of what you write supports the case that Obama’s proposal will make things worse.
Nobody has suggested that regulation eliminates greed; at best it is viewed as a necessary evil which helps to “temper, harness, channel, and control greed”.
Perhaps some of your confusion stems from the assumption that insurance companies care primarily about “market share”. Businesses care about profits, not market share. In the US, insurance companies make money by only insuring healthy people—people who pay premiums but don’t make claims. There is no incentive to insure people with pre-existing conditions, and there is a strong incentive to cancel the policy of anyone who becomes ill. The original notion behind insurance is to spread the risk of medical expenses widely, but because insurance companies can pick and choose who they insure and when this doesn’t work.
You also seem to misunderstand the plan that has been proposed. It is *not* a single-payer system like the one in the UK (with which, I should point out, the Brits are very satisfied). The idea is to introduce a low-end insurance plan comparable to, and in competition with, the low-end plans offered by private insurers. This has been proposed as a way of avoiding the need for heavy-handed regulation of the insurance industry. By providing a basic plan, Americans actually have a choice of providers, and they know that at least one provider won’t cancel their coverage (no matter what). It’s hard to see how this can be seen as “reducing competition”.
The government is also offering low-income people a subsidy to help them buy insurance, but this subsidy can be used to buy any plan—either a private plan or the government’s low-end plan.
Frankly, I find the argument that Americans shouldn’t be entitled to basic health care, whether they have money or not, completely archaic. The majority of Americans live in constant danger of losing their health coverage because in the US if you lose your job you lose your insurance. It’s painful to hear, but the US is one of the *worst* countries in the world in terms of health care structure.
A thoughtful substantive comment, for which I thank you.
But I disagree.
a) Nothing will eliminate greed. But much of the rhetoric in support of health care reform has been predicated on denouncing the “greed” of the insurance companies.
b) Market share is a means to profits. In a competitive marketplace, you market share can drop to zero if your prices are undercut by a competitor who is more efficient. You make no profits if you go out of business. Markets and competition keep businesses seeking ways to be more efficient and to lower costs. if they can lower costs and lower prices, they will gain market share and increase their profits. Free Market Economics 101.
b) If the problem is “greedy insurance companies” dropping patients that make claims, then change that regulation. You can already buy policies which are “guaranteed” and which cannot be cancelled, so long as you pay the premiums through age 65.
c) The advocates of healthcare reform, from Obama on down have made no secret of the fact that their eventual goal is a “single-payer” system. The currently proposed plan is a large step in that direction. Obama himself said he saw it as a part of a lengthy “transition” to a single-payer system (a la Canada or the UK)
d) “the Brits are very satisfied” umm… I don’t think so.
e) Americans have an incredible array of choices for health insurance now. Just go on the web and fill out an interest form. You’ll be besieged with agents wanting to present their plan to you and sign you up. The idea that we need a “government option” so that there will be competition is laughable. In fact, the government option is a Trojan Horse.
f) “entitled to basic health care” sounds noble, but in fact is a recipe for tyranny. If you’re “entitled” to healthcare, then that presupposes that you have the right to force others to take care of you. We may all have a moral obligation to be generous and charitable – that does NOT translate into a right by the government to confiscate our goods.
a) The rhetoric has focused on the greed of insurance companies because Americans are only now realizing that insurance companies are *not* looking out for their best interests. In fact, they are knowingly killing people and if nothing is done it will continue.
b) You can’t seem to decide whether you’re for regulation or competition. Regulation is slow, inefficient, and politically fraught. Competition in the form of a public option eliminates some of the need for regulation in a market-oriented way. I would have thought conservative/libertarian ideals would favor the latter, not the former.
c) Saying that any health reform leads to single-payer is like saying that any right to bear arms leads to personal nuclear weapons—it’s disingenuous nonsense. If you don’t support the current proposal be honest enough to argue about that, not about some imagined policy that you’ll have sufficient opportunity to object to when and if it were ever introduced.
And please don’t invent quotes from Obama. He certainly has *not* said that he intends to transition the US to a single-payer system. That’s Republican propoganda.
d) I suggest you actually learn about the health care systems in other countries before declaring them disasters. In survey after survey the British public is much much more satisfied with their system than the American public is with theirs. The same goes for the Canadians, the Dutch, the Germans, the Swiss, and many many others. Americans don’t seem to realize just how much worse they have it than others around the world.
e) The options available vary hugely by locality, and in many markets the vast majority of the population is covered by just one company. More to the point, buying your own insurance is far more expensive than getting it through your employer, mainly because the government has distorted the market with tax breaks that go to employers and not to individuals.
f) “Entitled to basic health care” presupposes an agreement among the citizens of the country that we will all bear some fixed cost to ensure that whoever is unlucky enough to need health care will get it. And I hate to tell you, but it’s already happening: everybody who turns up in the ER has a right to be treated. And then a right to declare bankruptcy as a result of the costs. Which means everybody else has to pay for that person’s health care. Care that would have been orders of magnitude cheaper if it had been addressed by real insurance before it became an emergency. We are already living in the worst possible version of your scenario.
The pure libertarian ideal seems to miss the point that contracts involving all members of a community are entirely legitimate. If the citizens of the country decide that the price of living in the US is paying an income tax, then that is their right, and those who disagree with that decision are free to leave. Of course, there are many checks and balances to ensure that the majority does not exploit the minority, and that certain fundamental aspects of the contract will never be violated: this is called constitutional and governmental design.
The functioning of a modern society is, I’m afraid, an inherently complicated thing.
a)I don’t dispute that health insurance companies need to be regulated. In fact, that’s why all 50 states do so. I am NOT persuaded that federal regulation is an improvement over state regulation.
b) Adding the government option is not what I would call competition – it is faux competition. It’s like saying you’re going to allow your 30 chickens to compete for seed & grain, and then adding a fox to the farmyard.
c) I’m not inventing quotes from Obama. I’m QUOTING Obama. Here’s the OFA / barackobama official website position from January of 2008. He’s ALWAYS been in favor of a single-payer system: http://www.barackobama.com/factcheck/2008/01/05/fact_check_obama_consistent_in.php
d) Americans are NOT dissatisified with their healthcare system. UT/Zogby Poll: 84% of Americans are satisfied with their healthcare. See here: http://www.americanhealthsolution.org/assets/Uploads/Blog/High-Satisfaction-with-Quality-and-Current-Coverage.pdf
Your sources for British satisfaction with their healthcare system?
Germany has private health-insurance. The government does not provide the coverage. My first son was born in a German hospital, paid for by German private health insurance.
e) You need to do more research on market shares by health insurance company. Your source for the assertion that in many markets the vast majority is covered by one company?
f) Collectively deciding we are going to share the costs of health care is quite a different thing from asserting that everyone is entitled to it.
Dostoevsky’s Grand Inquisitor asserted that men will trade their freedom for bread. I hope not.
a) The lack of a unified regulatory framework creates massive inefficiencies as well as unnecessary market segmentation, both of which are anathema to free market principles. This is in addition to eliminating any real possibility for portable health insurance, which is needed for a population as mobile as the US.
b) If the government can do health insurance well enough that people actually prefer it and choose it—despite the fact that the same subsidies are available to private insurers—then private insurance deserves to go out of business. Economists don’t think this is going to happen.
c) I suggest you actually read the things you link to. On every occasion Obama has been very clear that he does *not* think imposing a single-payer system on the US would be a good idea. And he said this to crowds of single-payer supporters.
d) Citing Fox News polls quoted in insurance-industry press releases only undermines your arguments. I find it unlikely that a greater percentage of people rate their insurance as good or excellent than the percentage of people who actually have insurance. If you’re looking for a Fox News story, how about this: http://www.foxnews.com/story/0,2933,136990,00.html The WHO and other international bodies regularly compare health care and satisfaction; the US consistently comes out among the bottom of the OECD countries.
You may be surprised to learn that less than 10% of the German population has private health insurance. The other 90% are covered by a government social insurance scheme. And, of course, insurance is federally mandated and strictly regulated—far more so than Obama’s proposal.
Again, I suggest you actually learn something about how health care is managed around the world before assuming that *anyone* else follows the US model.
e) The monopoly-level control of markets by the largest insurers is well-known, heavily-documented, and difficult to refute; I suggest you do some research instead of making assumptions to support your worldview. The AMA’s report, for example (http://www.ama-assn.org/ama1/pub/upload/mm/368/compstudy_52006.pdf) shows that in 98 percent of markets at least one insurer controls 30 percent or more of the market. In 64 percent of markets one insurer controls 50 percent or more. in 37 percent or markets one controls 70 percent or more. And in 16 percent of all markets—that’s one in eleven markets in the US—a single insurer controls 90—90!—percent of the market. If you think there’s real competition in the insurance industry you’re willfully ignoring the facts.
f) Entitlement to social services is *always* a social agreement.
Dostojevski was making a point: people value their lives more than any abstract notion of rights, because a dead man has no rights. When you see a loved one die because an insurance company found a way to deny them coverage, you may wonder whether an abstract fear that any reform may take us an inch closer to socialism was really worth the price.
(16 percent is one in six, not one in eleven. Sorry about that.)
a) and yet somehow, the private health insurance market in the US seems to deal with the regulations. Personally I would MUCH rather have regulation in TN done by bureaucrats in TN rather than by bureaucrats in Washington.
b) The public option is a Trojan Horse. The private sector will be systematically regulated, undermined, & strangled in order to drive over time the US population into a single payer system. This is not a paranoid fantasy. It is the stated goal of those who have designed this transitional system. Might take 15 years. That’s the goal.
c) I would suggest you read the things I link to as well. The link went to the official Obama site. He states that he has always been in favor of a single-payer system, and were we starting from scratch, a single-payer system is what he would build. Because we have a history of employer-provided health insurance we cannot simply move to it in one fell swoop. Here’s the quote: If Obama Were Starting From Scratch, He Would Support A Single Payer System. Obama said, “Here’s the bottom line. If I were designing a system from scratch I would probably set up a single-payer system…But we’re not designing a system from scratch…And when we had a healthcare forum before I set up my healthcare plan here in Iowa there was a lot of resistance to a single-payer system. So what I believe is we should set up a series of choices….Over time it may be that we end up transitioning to such a system.”
d) The poll cited was commissioned by Fox and conducted by Zogby. It’s one of several cited in the fact sheet. But of course, if you don’t like the message, feel free to attack the messenger. When your argument is weak, switch to ad hominem.
I’m aware of the German system. Lived there for two years. Wouldn’t want their healthcare system for the US, no matter how much the Germans might like it. They pay a supplemental 15% payroll tax on all wages to fund it.
The AMA study is fascinating – and worth studying in detail. I am not quite as alarmed as you are by the stats, but there are a few markets (AL is unusual!) that look bizarre. I note that BCBS in Nashville has a 42% share. I’ve worked for a number of years securing health insurance quotes from competing firms for groups of employees. The regs & details are byzantine, but we were always able to get competitive quotes from at least 3 firms. Among other things, this AMA study documents the national complexity of the health insurance market. I am EXTREMELY skeptical of the ability of any federal program to regulated/control the details of this system. The changes proposed are sweeping. And the federal government’s track record on these large projects is not reassuring. The 20th century is a catalog of the failure of large government programs.
f) Social agreement would be one thing. Imposition over the objections of the citizenry would be another. In fact, I would argue that private health insurance represents the voluntary pooling of risks. A government-mandated system forces even the unwilling to join the agreement at the point of a gun.
Distressing that you are so comfortable taking the choice offered by the Grand Inquisitor.