obamacare and socialism and the end of the world and stuff
22 Mar 2010Okay obviously my title is facetious in nature. I know everyone’s tired of hearing about this, and we’re all busy furiously unfollowing and defriending people who are either talking about this too much or too little, or in the wrong way. This is me, doing my part to alienate a few more people. I will make this short.
Essentially, I think that the passing of this legislation is good, despite the fact that it’s bolstering a system that is horribly broken. That is: we have a system right now that is horribly ass-backwards (I’ll get to that). Nonetheless, it still manages to provide healthcare for a certain number of people. The subset of people that are not included tend to be in poor health, which is bad for them, but it’s also bad for the economy from a production standpoint, and from a cost standpoint, as well (since we inevitably do have to pay for their health – just usually not until it’s too late.) That is, these people spend their entire lives in poor health, and thus contribute poorly to the economy as a whole, and then society absorbs the cost of trying to keep them alive once it has become Very Expensive. Thus, I agree with the general consensus that subsidizing our (current, broken) system to include these people is still a good idea, for now, because by any objective measure it probably means that it will pay for itself. That may be a rosy scenario, but I’m okay with that. I’d rather run up our deficit by providing healthcare for poor people than by starting wars and stuff. Yes, I’m in the dreaded “something is better than nothing” camp.
As for why it’s broken? It seems simple, to me – and it aggravates me that no one seems to be talking about it: health “care” is different than health “insurance”. Even in casual debate, it’s rare that you hear anyone even bothering to distinguish between the two things. The word “insurance” is used nearly interchangeably with “care” regarding health. Right now our entire system: the “market” (or lack thereof) and the subsidization are built entirely around an insurance model. Insurance models differ significantly from a commodity market in that you pay regularly for something you may never get. You’re hedging against the risk of something catastrophic that you would not be able to afford, should it happen. Insurance markets work great for this sort of thing: car insurance, flood insurance, etc. In the health world, this sort of model has its place as well for catastrophic health care – e.g. getting hit by a bus, falling off a ladder and breaking your leg, and so on.
A commodity market is different, and much simpler. I pay you X dollars for Y product. You’re paying money for a tangible product that you need regularly. Much of modern healthcare falls into this category – it’s a raw, predictable commodity, and yet, we’re applying an insurance model to it. This distorts the market horribly in many ways – namely that we’re (over)paying money regularly for a commodity in terms of insurance rates. And worse, insurance companies (until now) have had the ability to deny certain elements of commoditized care based on arbitrary insurance-market justifications – e.g. pre-existing conditions. This is why I think it’s good that our new legislation bars insurance companies from denying care based on pre-existing conditions, but it just further compounds the surreality of the fact that what these companies are providing is not insurance.
Worst of all, the fact that health care is “insured” means that it removes any incentive for the consumer (the insured) from doing any price-shopping. Because health care is an “insured” thing, the mentality is that you either have it or you don’t. There’s nearly zero incentive for your average consumer to price-shop the cost of drugs, medical procedures, et al. Even purchasing a generic vs. brand drugs is a factor that doesn’t matter at all to the consumer, except occasionally in the form of marginally higher co-pays. Thus you get the silliness of insurance companies spending money to advertise to their own customers to educate them that they should choose generic when possible. The result has far-reaching consequences: consumers (patients) with little to no involvement in their own health matters – preventative or otherwise. Consumers that do little to price-compare for anything, with the expected corresponding result: super-high healthcare costs nationwide.
The conservative/liberal split on this debate fascinates and confounds me. To some extent, I don’t really understand the conservative backlash against this legislation – all it does is subsidize the current broken system. I am not really following how it affects our liberty, or how it’s unconstitutional. As is usually the case when I debate these things with my republican pals, I assume we’d end up after days of debate by arguing about the meaning of the 9th amendment, so let’s just go ahead and jump to that point and agree to disagree. But what is striking to me is that we’re all talking about what the government should and shouldn’t be doing, and not what really needs to change: the market model we’re using to provide healthcare. We need to be treating health care as a commodity and paying the providers directly for it. As for who does it – the government in a “single-payer” model via socialized medicine in some form, or “the market” in a libertarian free-market utopia – I don’t care. It’ll work better either way. Once we start treating certain elements of healthcare as the commodities they really are, market efficiencies will explode, one way or another.
It will mean, though, that some difficult and interesting questions will have to be answered as to what constitutes a commodity. There are some facets of healthcare that are no-brainers: regular checkups, immunizations, the occasional bouts with colds/flu – these are all things that are expected and commonplace. There’s no insurance model needed here. But take cancer, for example. Cancer, by and large, is tragic, no doubt, and I don’t mean to belittle the horrible process of watching someone you love die – usually slowly and painfully. But a curious phenomenon has emerged: as technology and safety have improved, life expectancy has gone up. We no longer die of typhus, or being mangled in a thresher. The leading causes of death for Americans are, in order: heart disease and cancer. That’s how most Americans die. Cancer is tragic, and painful, yes – but if we’re being real with ourselves, it’s not a surprise. It’s essentially one of the mechanisms by which we currently die. In this manner, is it really something that fits or requires an insurance model, as well? We know it’s going to happen, so how is it not a commodity to be purchased (or subsidized by whomever) like anything else?
Food for thought.. the ethical/moral quandaries raised by this sort of stuff are a bit beyond the scope of my point here (consider that any market for healthcare to some extent involves also the negotiation of price, value and the return on investment for average lifespan), but the point is: a lot of healthcare doesn’t need to be insured. It just needs to be paid for. See? Like I said, I’ll keep this short. Ahem. Brevity is the soul of wit. Verbosity is the soul of awesome.
I can only really speak for my case, but I would price shop now (currently I have an HSA + “approved” insurance plan) whereas I did not before (business-supplied health insurance).