Tuesday, October 13, 2009

When Empathy and Money Aren't Enough; or, More than You Ever Wanted to Know About Health Care and Were Afraid to Ask

Over the past several weeks, I have gotten into a handful of discussions on health care. A number of which have been relative hard-liners and believe one thing implicitly: in a country as rich as ours, it is a moral imperative that all persons have health coverage. Along with this is often the belief that health care should not operate for profit. The thrust of this post is to challenge those assumptions, explore an alternate viewpoint and deal with how the issue of health care has consequences for our souls as well as bodies. There is a lot of ground to cover on this issue and my goals are probably more than I can handle. First, I want to establish certain economic principles and policies that will hopefully make what is happening on the evening news more clear. Second, I wish to discuss the circumstances surrounding health care as Americans know it. Finally, I want to contextualize health care in such a way that will help us answer a far deeper question: What is the relationship between medicine and the Good? The first two sections will be information I have collected that is available to anyone with a television set and a broadband connection; I am providing my summation for those who feel they have not fully grasped the situation. These sections can be skipped at one's discretion. The final section will be the only thing I have of originality to the conversation.

Basic Principles in Economics

I have a passionate layman's understanding of economic theory and humbly submit anything on the subject to the scrutiny of those with more formal educations on the subject. I do believe, however, that much in the health care debate is lost when parties lack a foundation in the subject. I don't believe it's exaggeration to say that one can't understand a newspaper if they do not understand statistics. Statistics came late for me for the same reason it has not reach many of my friends – the math is intimidating. For those brave souls out there, let me calm your heart by telling you that the math in statistics is easier than calculus and not as scary as you imagine. While I cannot help anyone understand statistics, most economic principles can be apprehended with conceptualization.

Economists, according to Timothy Taylor, ask 3 questions:

  1. What should be produced?
  2. How should it be produced?
  3. Who gets to consume what is produced?

Answers to these questions fall within a spectrum, with complete individual autonomy at one end and complete government oversight on the other. Most of us are somewhere in between.

Lately I've become convinced that if there is there is a God, modern economic theory is his greatest providential gift. By providential I mean something quite specific, that is, a system that functions by human virtue and practical human reason. Like the great physicists, I cannot help but be amazed at how the order of our economy arises out of the chaos of markets; it is as awe-inspiring as how our bodies. I say all this because I want to dispel a notion that runs throughout our society and has gotten quite an ear with our current recession greed is a problem, but not the problem. Some people (e.g., Bill Maher, Michael Moore) blame our unregulated banking for the economic downturn. Unfortunately, I'm not comfortable enough in my opinion to say regulation and government intervention are the culpable ones. The principle I want to urge upon you is that for democratic republics, we are prosperous because individuals pursue their own self-interest. What is the difference between self-interest and greed? Not a whole lot. We are all greedy and we are grasping at the wind if we hope to build a government on the holiness of its citizens. As long as we live in a world with finite resources, we will have to contend with desire.

The good news is that smart people have anticipated these concerns. This all goes back to all that supply and demand talk we had in school. The cost of something is not magic – price is simply a market signal that tells us how much people will pay for something. Even things that aren't "things" (i.e., commodities) tend to come with costs. Water is free, but pipes and reservoirs must be built to get water to our homes; books and computer programs have worth from their specific organization of words and electrons. Services, such as house cleaning, a theatrical performance, and parts of medicine are paid for without a physical object to be claimed for exchange. The people mentioned in the beginning often want to make a clear distinction between a 1. Service and a commodity, and 2. A "necessary" service (that is, a service without which, a person may die, such as health care) and a luxury service, like hotel room service.

Here is the beginning of what I will call the "liberal/conservative divide." Part of the debate on this subject hinges on how health care is perceived. If health care is considered a specialized service, it can be subjected to normal market forces (this is my view). On the other hand, if health care is something special, something to be orchestrated by forces other than the market, I believe the onus of proof as to why this should be is upon those in favor of universal health care.

Before leaving the issue of greed, I want to also iterate that there are other forces that curb the nastiness of greed. The most common and powerful is competition. Competition turns the destructive desire for inordinate accumulation against itself and like a fission reaction creates an energy and wealth that we all profit from. One caveat comes when a single entity becomes so large that competition is ipso facto removed. This can happen for various reasons and in different ways. Cartels are a type of monopoly that forms when all the businesses in an industry agree to fix prices and effectively not compete with each other. It may also come about when a company simply does business so well it outpaces its competition, as in the case of Alcoa. To guard against these things we have antitrust laws.

The power of competition can extend beyond a typical market. Examples include the 1998 home run chase, the 1974 November Revolution in physics, and probably countless others. My belief in the power of competition plays into my preferences in other policies, such as education. What I want to impart to my readers is the idea that there are other forces in our economy besides abundance and need. Good management of these things can increase the former and decrease the latter. Bad news: it takes time and effort to understand them. Good news: most of us can, with less time and effort than might be imagined.

Unknotting the Gordian knot of Health Coverage

But I contend that if we're providing total medical coverage for every man, woman, and child in Iraq, shouldn't we at least be doing the same thing for every man, woman, and child in the United States? ~Tony Campolo

To switch gears a bit, a person will begin to butt up against the conservative/liberal divide. Unfortunately, there is no one right way to organize a system of medicine. Preliminarily speaking, however, a basic understanding will be laid out. Most confusingly, the word health care and health insurance are used synonymously, which is utterly precarious. It behooves everyone to be clear in the difference between the two. Insurance, traditionally speaking, is when coverage for catastrophic events (e.g., car wrecks, house fire, natural disasters) is paid by the person covered on a regular basis; in return, a large payout would be returned on the unlikely chance something major would befall the insured.

Health care, by contrast, is by its nature much like the opposite of insurance. Health care, ideally, could be acquired regularly; and, in theory it could be budgeted like any expected cost, such as food and housing. Marrying insurance and health care is the start of our problems. Instead of going into details, I'll let you go here.

There is a strange fetish I have seen with people who want government to step in and handle health care. With a sympathetic heart, I want to tell these people that government bureaucrats are not special: they are not endowed with any special knowledge or ability (sometimes I fear it's because a person lacks these qualities that they work for the government, but I digress.) There are only three ways I can see to pay for most anything. A third-party can pay, such as an employer (how most of us get our health care now); a government can tax and redistribute the money or service; or, an individual can pay.

Returning to the Gordian knot of health coverage, this is likely where people can get twisted up, and in order to consider a system where individuals pay for their own regular check-ups and basic health care, most people have to imagine a completely different state of affairs. Because a third-party pays for coverage, it skews market costs. Most people haven't a clue what it costs to go to the doctor. In most people's minds, there is only one question: Am I covered? It is the golden ticket that grants access.

If we could imagine a world where health care is just another service, we might begin to see why things are so opaque and why that ought not be. First, if health care why like any other service, why not have a list of services when you walk into a hospital or clinic with prices? Provide transparency. This transparency would have one powerful effect: it would create competition. Second, it would not matter where (or if) a person worked. If people simply paid out of pocket, switching jobs and "losing coverage" in between would be a moot problem.

This is all fraught with complications, however, because there is a group of people who think the government is better at solving problems with other people's money. By and large, this is why, at a fundamental level, Democrats and Republicans are encountering friction with each other. The liberal view, in many ways, "just wants everyone covered." It is "A brief, simplistic, response…" Don't weigh people down with the complexities of all this political wonkiness. The real danger of government control is that government is a type of monopoly, the most powerful monopoly on our country. It has no limit to its influence, which is why it should be feared, because power corrupts.

My heart is devoted to self-governance, which leads into the next section. But, before we make the argument all about "making sure everyone is covered," let me provide a handful of solutions that I think many of us can get behind. The best part about them is that they would all be relatively low cost and they aren't a huge economic gamble like what's being tossed about in Washington.

  1. In some fashion, separate health insurance and health care.
  2. Separate health coverage from employers. Have people invest in HSA (Health Savings Accounts).
  3. Make health care utterly transparent, including prices on surgeries, doctor's visits, etc.
  4. Allow insurance companies to cross state lines.

Policies to consider:

  • Contestable but set returns on physician malfeasance and malpractice. The intention of this would be to lower court fees and, ideally, lower their incidence.
  • Give every person a medical voucher (of, say, $1500 per annum) that they can put towards their coverage. This would provide a level of health coverage for everyone and they could use this money however they saw fit. This could be rolled over into the next year and anything saved at death could be passed on as inheritance. This should provide a minimum level of care for most and no one should have to go without basic health care, though some still would due to poor choices. I consider this a much more sensible solution than the dreaded "public option."

Everyone Should Be Covered – Finding the Good Life in Good Medicine

Most people would agree that everyone having medical coverage is the goal. My goals are not as lofty, but I think by tweaking the system, we can get pretty close to the majority opinion. A fair question is, Why not? Why not cover everyone? My rationale on the issue is a bit abstract, but at core, I think there is something vital in our lives with being able to fail, because only with the option of failing can we succeed.

Let me give an example to illustrate my vision. In Africa, there is an area where people pay out of pocket for their children's education. The average daily salary is $1 to $2. The monthly cost for an education is $1. So, in this part of the world, an African has to work one day out of the month to educate their child. Already they are talking about getting the government involved in financing children's educations. Again, remember the government has no special powers. They can tax and reallocate. Even more, though, I want people to think about what is being lost when government is involved. In this African community, a parent can take pride that one day out of the month they work to give their children a better life. The same thing happened with the immigrants at the turn of the 20th century coming here to America. Over and over the story is that of a family that worked hard for their children, and their grandchildren ended up doctors and lawyers.

There is a motherly instinct that might say, who cares? Children are hungry, they need to learn, and they need to be taken care of when they get sick. Who cares where this support comes from? Ought we to get tied up over things like individual pride and sense of having sacrificed for a noble cause? I would respond that there are few areas in life left where we can find those virtues. Jobs have more and more lost a sense of craftsmanship; we are now laborers and not tradesmen. A parent's educative opportunities are diminished with the rise of single parent households and a large portion of women in the workforce. One thing we may be able to hold onto, or get back, is a sense that we provide for our own. And we provide for our own because we love them. Not because a government takes from our paychecks without request or will come with guns if we do not pay our taxes. We provide for our own because it's the noblest thing we can do with our vocations.

Charles Murray is critical of this, one symptom of which he chronicles in Thank God America Isn't Like Europe -- yet. These are two different visions. The European vision is that all will be taken care of. But there is an American vision and we have become myopic to it. It's a vision that says government will try and clear the land and make the pursuit of happiness as good an opportunity as possible. Murray makes much of the idea that there is such a thing as "a life well lived." In the American vision it is quite possible to fail – not just financially, but in a deeper, moral sense. Murray's book In Pursuit of Happiness and Good Government, says happiness is "lasting and justified satisfaction with one's life as a whole." For as laudable a goal as universal healthcare is, lasting and justified satisfaction in one's life is a far better thing to have. Let that be our goal, in life, in work, in politics, and health care will only be a means to that end.


Here are some resources that I drew from to educate myself on the subjects addressed in this post.







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