It’s a good thing the public option may be dying
Thank God for fiscal irresponsibility. (Wow, I never thought I’d be saying that.) Thank God for freedom. And thank God for stupidity. These three things are the key factors killing the public option a couple of days ago in Congress.
If you have been paying attention to any news station at all in the past week or two, you will have heard something about the public option. You may not, however, have heard what it is, so I will briefly say that the public option will be a government insurance company that undercuts the private insurers to provide health care for the $47 million or so people who do not have health insurance. This seems kind of counterintuitive when you add it to a plan that involves price fixing for previously expensive premiums and mandatory coverage despite pre-existing conditions.
The government is essentially trying to bring a little humanity to its health care, but what is actually happening is something completely different. Their intention is to make sure that everyone has coverage, no matter the quality, but what they are actually doing is reducing the quality of health care for everyone and placing people into fixed categories that they cannot escape from.
Most Americans are covered by some form of health insurance, whether it be through a co-op or through their employers. The government has already given companies heavy incentive to do so, through tools like deductions and deductibles. But the 47 million people currently without health insurance are a collection of special cases. They are comprised of people with pre-existing conditions who have been denied by their insurance companies because coverage would be too expensive. President Obama, Senator Baucus and Speaker Pelosi would have you believe that lack of decent health care is a crisis, and a complete and total overhaul is necessary.
But if you look at the numbers, you’ll see that an overhaul doesn’t make that much sense. When 85 percent of your population is insured, that’s a very good thing. Democrats point to the declining health of the American people as a sign that the health care system has failed and needs to be changed. But in reality, the heart disease, obesity and diabetes spikes are results of poor health choices by American people, not the American health care companies. An 85 percent insurance rate says that the system, however flawed, works as a whole. Spending billions upon billions of dollars to rework it so that 15 percent of the population is covered seems, well, stupid.
To impress upon you the stupidity of this choice, imagine that you have just baked a cake for your friend’s birthday, and you are passing out cake. After you have passed out the cake, you realize that out of the 50 people who are there, 6 of them do not have cake. Do you take everyone’s cake back, bake a new cake, and then distribute out again? Of course not. You find other desserts, like ice cream or candy — alternatives like private charity (which many people seem to distrust even though it is less clogged up by the bureaucrats and has existed longer than government welfare), or at least a government subsidy so that they can get themselves some cake.
Believe it or not, revenue distribution and freedom have a lot to do with health care. Revenue redistribution is the way Democrats propose to cover everyone: by cutting off funding to specialists that spend a lot of money — like cardiologists and oncologists — and giving it to general practitioners. In fact, one of the components of the health care program involves a 5 percent tax on specialists if they are in the top 10 percent spenders for health care. That means that if they prescribe expensive tests, medications or life-saving techniques, they would get hit with a fine and see a shrinkage in resources available to them. If you were a patient, how would you feel if a doctor withheld care from you because that doctor was afraid of getting hit with fines and fees?
The problem with this logic goes beyond basic care — it places the physician’s self-interest above his patient’s interest. Under the current system, or even a completely free-market system, it is in the best interest for practitioners to heal patients because they will get paid as a result. If they heal the patient from a particularly dangerous disease, their reputation will improve, and they will acquire more patients as a result. Under the system proposed by Congress, doctors will become more concerned with their spending habits than they do with actually healing the patient, and they will cut as many corners as they can. A doctor may not order an MRI for a patient who needs one to avoid fines. Simply put, this revenue redistribution puts patients’ lives in danger.
In all fairness to the other side, I should highlight that health care costs have been skyrocketing. Atul Gawande discussed these costs in an interesting article in The New Yorker. Gawande’s main assertion is that unnecessary tests and malpractice are what is driving up health care costs. I’ll acquiesce and say that malpractice costs are very high, simply because of the American Bar Association. To elaborate a bit, recent polls have said that 83% of Americans say that Congress needs to change the medical malpractice system. But the American Bar has way too much interest to change it because 54 cents of every insurance dollar goes towards administrative expenses like lawyer fees, according to the New England Journal of Medicine. That’s quite a hefty sum, but it has nothing to do with health care, and there is nothing in the Baucus bill to rectify this situation. So Baucus is forcing doctors to risk their careers without any protection whatsoever, which does not seem wise.
Gawande also makes the assertion that unhealthy lifestyles do not contribute to the rising health care costs. Yet obesity rates are up, cardiovascular disease is on the rise, and our lifestyles are becoming increasingly sedentary, especially as children. In 2004, 18 percent of children ages 6-11 were overweight, and 17 percent of children ages 12-19 were overweight. To compare this to previous data, only five percent of children ages 12-19 in 1980. Healthier people tend to exercise regularly, eat right and make better lifestyle choices. This group of people is decreasing, and premiums rise because there are less healthy people per insurance pool.
But how does freedom come into the picture? Well, this also has to do with revenue redistribution. Doctors have less freedom to do their job because they have spending limits they must stay under. Patients therefore have less freedom because, no matter how much insurance they have, whether or not they get better comes down to how much the doctor can spend.
All in all, the public option losing solid ground was the best thing that could have happened in the health care debate. It showed that the American people choose freedom above the false promise of a better life. Even though Baucus’ health care bill was passed by the Senate Finance Committee, the lack of a public option still gives the insurance industry a modicum of a market, and that’s better than the quasi-socialism that would have taken place.
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How to deal with swine flu when you don't have health insurance. Or you can return home.
The New England Journal of Medicine cited did NOT say 54% of insurance dollars went to medical fees, it says that 54% of compensation to the plaintiffs of malpractice suits (i.e. the ones the court find were victims of malpractice) went to the victims administrative fees! This inaccuracy should be immediately corrected. Some may even read this to be the even more bombastic claim that 54% of MEDICAL insurance cost ends up going to malpractice lawyers (and this isn’t even true of malpractice insurance).
This illustrates a severe problem in how expensive our legal system is and how much of the rewards that lawyers end up eating.
Additionally, Atul Gawande, the author of the New Yorker article, never asserted that malpractice was together with unnecessary testing were the main factors driving up health care costs. In fact, only raises the issue of malpractice twice. Once to refute the claims of doctors who claim malpractice drives up costs in McAllen county. Gawande points out instead that in Texas, which caps malpractice insurance at 250k, there are hardly any malpractice lawsuits. The other time Gawande points out that malpractice insurance costs could be shifted from doctors to that of collaborative organization doctors could join (pooling but not reducing the costs).
The main thrust of the New Yorker was that the government needs to reform how we do healthcare towards the quality-based model seen in the collaborative clinics because the way the incentives are structured in our relatively free market fee-for-service system doctors are encouraged to perform more expensive procedures and more of them, yet you ignore this claim in asserting your opinion that in a free market system doctors are result and quality oriented but put word’s the author never used into his mouth.
As a person with health insurance, I have personally gotten sick on multiple occasions and often find the insurance company reluctant or unwilling to pay for treatment and very unfriendly. I have friends and family members who can’t get insurance because they have pre-existing conditions (the lucky one was simply rated and had her condition excluded) and my grandfather was simply refused coverage by his insurance company on all claims we made for him (they eventually dropped making excuses and simply invited us to sue). Others have been dropped when they have got sick. While you may think 85% coverage is solid and that pre-existing conditions are too expensive, It does not seem ok, or keeping with the purpose of health insurance, if so many of the claims are denied (over 1/5 of the claims in some areas) and many of the people who have insurance are dropped when they get sick. It does not seem ok that health insurance companies have made health insurance so easy to lose (for people who lose their jobs, or fail to realize the stupidity of allowing a gap in their coverage, or by trying to find any and every excuse to drop patients after they get sick). I have had it happen, my family have had it happen, and my friends have had it happen. My personal belief is that the health care system is badly in need of reform away from the private insurance model, but I am personally outraged that this author has manipulated sources that say otherwise into trying to support his position that the current free market fee-for-service private insurance dominated system is well-functioning and ignored what the sources actually say.
Jon
October 22, 2009 at 1:44 am
When I pointed out that the study the New England Journal of Medicine cited did not say 54% of insurance dollars went to medical fees, it says that 54% of compensation to the victims of malpratice’s legal and other court-related fees, I meant to explain the difference more clearly.
This illustrates a severe problem in how expensive and wasteful our legal system is and how much of the rewards that lawyers end up eating from the malpractice victim’s pocket, but this does does little to establish the author’s point about how much money from malpractice or medical insurance premiums goes to lawyers pockets.
I know of one little girl my mother knew through her friends who became both crippled and severely retarded after malpractice but whose compensation of nearly $3 million dollars (itself not enough to get her through life) dwindled after taxes and legal fees to less than a million. The family, used most of the remaining money to pay her extremely high medical bills and the rest to build her a pool and harness so she could kick around and sort of swim in (the only way she could be mobile and experience any recreation). The family was left with having to pay for the rest of their little girl’s care out of pocket but they realize they will not have enough money to have the girl taken care of at her current level for the rest of her life and are worried about the type of institution she may end up with.
The NEJM article does a lot to show how legal fees hurt victims like this one but does little to establish the claim that the author of this opinion piece makes, that malpractice is a primary driver of medical costs (for which we would have to break out the percent of medical insurance costs that end up going to malpractice victims like this little girl). The main point of this article was to establish that frivolous lawsuits (which is the usual justification and target of legislation) is not a substantial factor and that most claims were meritorious but that the legal fees are exorbitant and that “streamlining the processing of claims that do belong” (actually making it easier and cheaper to bring a meritorious suit) is the way to fix malpractice. The evidence here is badly misrepresented and this faked evidence is used to serve a very different purpose
Jon
October 22, 2009 at 2:50 am
Upon further reflection I think this article is deeply flawed in other ways and that a more prominent retraction is necessary. The inaccuracies that abound are so prevalent as to make me wonder about whether this opinion piece was in any way vetted.
The article contains other factual inaccuracies. There are relatively “minor” ones such as claiming that the 47 million people are not all people with pre-existing conditions. However the worst abuse is the claim that the “democrats” want to pay for covering everyone through a a 5% “tax” on physicians who are in the top 10 percent of spenders of health care. This latter mischaracterization is also an extraordinary abuse of Tudor’s source (a WSJ opinion piece) which states that Baucus bill has a provision to reduce medicare reimbursements to doctors by 5% to those whose cost to medicare falls on the 90th percentile and above. This is neither properly a tax nor is it applied to the top 10 percent of health care spenders, only the top 10 percent of health care spenders qua medicare, it only applies to the doctors in so far as they choose to participate in medicare (many HMO’s operate similarly but perhaps more aggressively). Yet Tudor implies this will effect everyone, and doesn’t even mention medicare.
The article even seems to undermine itself. After saying that spending billions on billions to cover the remaining 15% of the population is a “bad idea.” Tuber brings up a “birthday cake” analogy and suggests (if we don’t like his preferred option which is private charity) that we subsidize people to buy insurance, but not only is this a contradiction, but subsidizing people to buy health insurance on the private market is exactly the purpose of the Baucus bill!
There are other factual inaccuracies as well as non-sequiturs and it is unclear at times which bill or proposal that this article discusses. I plead with you to change your editorial policies so that this sort of thing doesn’t happen again. I have attended North Western in the past and have grown up in the area and so I personally do not like to see this school fail to live up to its reputation in its student publication.
Jon
October 22, 2009 at 4:24 am
We’re asking the wrong questions in the health care reform debate. If you want to have health care for everyone and save money too, abolish all health insurance and create a non-profit to run all of our health care services. Put all the doctors and other health workers on a salary. Eliminate all billing. Elimination of all the billing overhead and insurance companies would save at least 20 to 30 percent of all our health care expenditures. That would leave more money so everyone could get health care services with money left over for improving services.
Fund all this with a tax. But everyone would come out ahead because they’d no longer have to pay insurance premiums and out-of-pocket charges and co-pays. Businesses would save money, too, since they’d no longer have to pay for employee insurance. Their taxes might go up, but again this would be more than offset by no insurance costs.
Bob
October 22, 2009 at 6:06 am
I was going to respond, but I think Jon pretty much hit the nail on the head.
Ginger Brew
October 22, 2009 at 2:37 pm
I agree with Jon. And I’ll say what he didn’t… You’re an idiot.
s
October 22, 2009 at 6:49 pm
oh my god, this is the worst column ever.
favorite tidbits:
“$47 million or so people” [sic]
“When 85 percent of your population is insured, that’s a very good thing.” (That’s the lowest rate in the developed world.)
“It showed that the American people choose freedom above the false promise of a better life.” Except the majority of Americans now support a public option. 56 percent. In reality, it showed that Congressional Democrats are in the pocket of the insurance industry and don’t actually care about keeping costs down while expanding coverage.
Aren’t people already misinformed enough about health care? NBN: just because someone writes 900 words doesn’t oblige you to publish it.
omg
October 22, 2009 at 7:25 pm
Thank you for writing an article like this. I may not agree with everything that you say, but it takes guts to put something like this up on such a liberal campus where people will tear down anything you say that they don’t agree with. There are many, many problems with the proposed health care bill, and I appreciate that you explored one.
Another article on the employer mandate soon to come? I sure hope so.
Amanda
October 22, 2009 at 7:25 pm
A well written article taking a position that isn’t very much heard in the Northwestern community concerning the healthcare debate. Both sides have valid points and strong arguments to make.
However, I will never understand why some people feel the need to call others idiots just because they have a different political/ideological persuasion, or why some people would want to silence viewpoints that oppose their own.
amused
October 22, 2009 at 7:48 pm
“But the 47 million people currently without health insurance are a collection of special cases. They are comprised of people with pre-existing conditions who have been denied by their insurance companies because coverage would be too expensive.”
haha…this makes no sense. If you said 47 people, then yeah, this comment would’ve been ok, but you do realize that their is a million behind that number? and calling them all a special collection of cases just shows your lack of knowledge about what is really going on.
I applaud your efforts, but not the final product.
...uh
October 22, 2009 at 8:04 pm
Seeing a few comments praising the bravery of this position, I would point out that I put my comments in strong language of illegitimacy and request a retraction not because I dislike the opinion but that this article is riddled with severe inaccuracies. There is no “5% tax” on doctors who spend too much and that is not what the Wall Street Journal article cited claims. Similarly the New England Journal of Medicine article does not say that “54 cents of the insurance dollar goes to administrative expenses like lawyers fees” it says something completely different. The New Yorker article never claimed that malpractice was driving up the cost of health care (in fact the article indicated that costs could skyrocket even in the near absence of malpractice costs). These articles are cited for evidence of these claims within the piece above, you can go on the links and read the articles and see clearly that these claims not supported.
I ask this article be retracted because reputable sources are being besmirched by being used as evidence to support fantasies.
Jon
October 25, 2009 at 5:51 am