March 4, 2010

Healthcare: A Little Common Sense

In my myriad of researching, opinion-creating, and philosophy-searching, one thing is clear:

I still remain confused as to how to solve our healthcare dilemma.

But the question remains: how does the US outspend everyone else on healthcare but still rank behind literally every other developed country on life expectancy and survival rates from pretty much everything other than cancer, something that the Conservatives like to spout off about like it's some sort of one-stop refutation.

Read: Great Britain and most other European nations have GREATER survival rates for most other chronic diseases other than some cancers. And in some, like France, the wait times are actually competitive with ones in the US for procedures. Wait times are not nightmarish in every socialized healthcare country like they may be in Canada.

My general guiding philosophy is that socialized healthcare obviously and without dispute results in much more positively valued macro-scale health indicators for the population of a nation as a whole. Also, I know from economics that healthcare is a sui generis good, and profit incentives in healthcare are directly in line with denying as much of the product as possible, unlike most tangible goods.

This is troubling because healthcare is a good that determines life or death at a fundamental level. Most socialized countries pay between 2 and 5 cents per dollar per capita on administrative overhead and bureaucracy, a word Republicans love to use. We spend 29 cents per dollar on our private bureaucracy, out of a per capita amount that's twice as high as the next highest nation. Talk about stupidity and inefficiency.

Also, from the perspective of insurance, it is Econ 101 that insurance, in any form, is most efficient when the risk is diluted as much as possible per a population. This is the entire point of the idea. Insurance, private or public, cannot be efficient or effective when you are not required to pay into the system or to have it. You are required to have car insurance for the same reason; if car insurance were optional for car owners, the whole system would break down.

Healthcare is the same, except as a good it applies to everyone universally, since everyone has a mortal body subject to harm. Therefore it only makes sense that everyone has it, without the option to opt out. This is especially important with health because the current optional system conflicts directly with societal morals; if you willfully choose to not have insurance and get into a a bad accident, you still must be treated according to the law and according to morality and decency. So we either change morality to be logically consistent, i.e.- don't treat those who have chosen not to get insurance no matter what unless they wish to pay out of pocket up front, or we change the universality of insurance. And one is much easier and more morally palatable to do than the other.

However, I also know that even though it is a sui generis good, it is still a good that is subject to scarcity, and I am swayed that socialized healthcare, at least in the classical sense, does fail at the margins and does fail to effect innovation. Yes, it is true that 5 out of the 10 largest pharmaceuticals are based in socialized-healthcare countries, but these companies rely on the profits from the US market in order to innovate. This is a fact.

Having said all this, my position is that I'm all right with private healthcare, as long as everyone is required to have it under penalty of law, it can be sold across state lines, and it is price regulated to a small extent. However, I'm also all right with completely socializing the system, for the greater good and in the name of efficiency.

I also desire tort reform and believe it is an essential step as well.

But I'm not convinced that the healthcare bill does any of the above. Bill Mahrer has joked that it is essentially a [naughty word] to the insurance industry, and I think he's right as far as I know. However, I also feel that even if it is a severely flawed bill, it is our only shot at actually changing anything. Heaven knows a Republican won't do it.

So I'm torn. I don't know what's going to happen to healthcare reform, but I just want to believe that the current proposal will be the start in making some changes, despite its huge flaws. I don't know if I can though.... I wish they would just rewrite the whole thing, Democrats would let tort reform and interstate competition happen, and we mandate universal coverage under penalty of law. Heck, I'd even be in favor of getting rid of Medicare and Medicaid completely...

To get efficiency we need to focus on ONE approach, whether it be public-insurance for all, Medicare for all, or private insurance for all. I don't care. The key is to make it universal.

Then the system would be fixed. Period.

©2010 Drew Willsey.

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