Tuesday, January 3, 2006

The Sick Elephant in the Room

Terry McKenna is back again with a post that affords us a comprehensive view of the social and economic payoffs to be discovered if the politicians will only wake up to the necessity of a single-payor health insurance solution, such as many other more civilized nations than ours have done.

Others writers—most notably, Paul Krugman of the New York Times—have pointed out the clear disadvantages—the corruption, inequity, and economic waste of the system we have. (Note: to read Krugman's work, you'll have to take a trial "Times Select" subscription. It's well worth the $50 a year to have access to Krugman, Rich, Dowd, Kristof, and Herbert; but if you can't afford it you can do the two week trial and remember to cancel it before they tap your credit card). As Krugman has repeatedly observed, the existing system is so loaded down with administrative costs (that is, buck-passing exclusions, along with investigative and administrative overhead) that its effect is to put all the burden onto the middle classes and their employers.

So Terry offers us a view of what we all can get out of a public health insurance solution. In his words, it's all a matter of killing two birds with one stone. Perhaps, but the only birds I see worthy of death by stoning are Republicans and Democrats. Onstage, then, Mr. McKenna:

Conservative (Republican) think tanks have generated lots of answers to public policy questions, but by and large, their solutions sham solutions. To every public ill, they propose yet another asset accumulation vehicle that benefits the wealthy.

The Democrats, on the other hand, avoid serious solutions. They are capable of identifying social ills, but only to generate campaign noise. They say nothing about solving problems because they know that once they do, the Republicans will remind us that solutions cost money, and that means raising taxes. And raising taxes is political death right now.

So it is up to us in the Blogosphere to take up the slack. This essay addresses the health insurance crisis. If solved, we will kill two birds—maybe three—with one stone.

The stone would be the creation of a single payor health insurance system. The birds (problems) are:

1. the uninsured
2. the urban hospitals, which disproportionately serve the uninsured
3. American manufacturers, which must compete against foreign manufacturers who pay low wages and provide little else.

It would work much like employer paid health insurance. We have had 60 years of experience with group health insurance. We know how to deliver high-end expensive coverage and how to cut costs via managed care techniques. We also have the experience with Medicare and Medicaid. Managed care can work. The problem with employer provided coverage is that after a while, litigation and state legislation defeats cost controls. But if the system were run by the federal government—and therefore immune to lawsuits—the cost controls could not be defeated. With thought and care, we could devise something like mid-range coverage for everyone. Some might get less coverage than they have now, but these would be offset by the much larger group who would fare better. Thus the large numbers of low paid service sector workers, who now have nothing, would have real health insurance.

Most employers and employees are already paying a lot for health insurance. If we converted these costs into taxes, and shared them nationally, we would be on our way to paying for a new program – so the costs would not change for large segments of the population. Furthermore, since costs for the uninsured are already being absorbed by the paying customers, hospital prices could lowered as the hospitals begin to be reimbursed for what is now charity care. And health care for the formerly uninsured would move from the ER (or clinics) to a family doctor’s office – where crises could be prevented.

We have shown the benefit to the uninsured. How about the rest of us? The advantage here would be with regard to employment decisions. Employees would be freer to move to a new job because health insurance would be truly portable. On the other hand, low cost employers (like Wal-Mart) would lose some of their unfair cost advantages, as they start paying for employee health care through the new national program.

Another benefit would go to industries (like manufacturing or the airlines) that are in decline. Declining employers are often saddled with retiree health care costs that can no longer be paid for by worker productivity. If these costs are redistributed to all of society, these businesses can have a chance to regroup. An example of the benefit to all of us would be that business like Bethlehem Steel or Delta Airlines might not have to declare bankruptcy.

And the benefits grow larger. Medicaid is a tremendous drain on state and county budgets across the nation. Some states are solving this by drastically cutting eligibility. But doing this just downloads the costs of indigent care back to local hospitals – or to more generous states as some of the poor flee to better benefits.

But no one is talking about real health care solutions. As stated above, the Democrats are afraid to do more than make noise. Here is a bit from their website:

Affordable Health Care
"In the wealthiest, most powerful nation on earth, no one should have to choose between taking their child to a doctor or paying the rent. Democrats are committed to making sure every single American has access to affordable, effective health care coverage.
We can make sure every American has that access while preserving the high quality of our health care and keeping the choices that we enjoy. We can leave decisions about health care to patients and doctors, keeping the government and insurance companies out.
Democrats will not stop fighting this battle until every single American has access to affordable health care."

What we need now is the political equivalent to George Bailey. Remember him (Jimmy Stewart), in the movie It’s a Wonderful Life? He got up before a mob of panicked depositors (customers of his savings and loan) and reminded them that if they stick together, they will get through this panic (a run on the bank). George Bailey raised his voice in favor of shared responsibility. But when it comes to healthcare, all we get from both sides of the political ideology cockpit is bullshit and spin.

—T. McKenna

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