Blog & Reviews

Response to Lavarr Webb

May 9, 2017 | Blog | 0 comments

My friend, Lavarr Webb, published a comment about health system reform on his website “Utah Policy” this morning (May 9, 2017).  It takes courage to speak up about health care, given that emotions are running high.  I admire his willingness to further the public discussion about this issue, which I believe is the most important domestic policy problem the US faces.  But I believe he has incorrectly characterized or misunderstood what the problem really is.  Here is what he said paragraph by paragraph, followed (in parentheses) by my responses:

. . . the national furor over health reform all across the country, demonstrates how emotional and difficult this issue has become. It’s nearly impossible to stake out a sensible position that attracts widespread support, that responsibly deals with the healthcare crisis, while not requiring massive tax increases or running up the national debt. (Naturally healthcare is an emotional issue.  Few public policies hit closer to home than how or whether patients receive needed care for illness and injury.  There is a position on healthcare that numerous polls over many years have shown has widespread support: single payer.  And no, single payer health reform is not irresponsible.  It will not require massive tax increases or a ballooning national debt.  Supporting the status quo, business as usual in American health care, however, is irresponsible.  It has always led to massive tax increases and is solely responsible for the growing federal deficit.  Both democrats and republicans are and continue to be responsible for the disaster that is American health care, largely because elected officials from both parties have refused to even consider, much less debate and legislate, single payer health system reform.)In the massive uprising against the healthcare plan just passed by the U.S. House, it’s easy to forget that Obamacare, in many ways, was a disaster. It was so unpopular that it contributed significantly to big Democratic losses in Congress and Republicans winning control over Congress and the presidency. (There is surprisingly little difference between the American Health Care Act (which I will call Trumpcare) and the Affordable Care Act (which most call Obamacare).  House Republicans actually did not repeal most of Obamacare-6 of 10 titles in the Affordable Care Act were not even touched by the recently passed AHCA legislation.  The uproar over Trumpcare is largely symbolic, partisan bickering.  Both are bad policy, because both prop up business as usual in American healthcare, especially the private, for-profit health insurance business model.  Yes, Obamacare was failing, because health insurance is a failed business model that only ever survived because of massive government subsidies coupled with most favored business treatment in laws and regulations.  For the same reasons, Trumpcare is doomed to failure.  Ds who are defending Obamacare and Rs who are promoting Trumpcare are both doing a disservice to American patients (meaning all of us at some point in our lives).  Bickering between the two parties over health care is partisanship at its worst.  There is no meaningful difference between the two parties on health care.  In order to achieve real change in our health system the voters will need to throw members of Congress from both parties out of office.)

But Obamacare did bring a lot more people into the system of government benefits. And despite its many flaws, the Obamacare mandate that everyone buy health insurance, and everyone is covered in some fashion, created and strengthened the notion that healthcare access is an absolute right that everyone should enjoy, at a price they can afford, no matter their situation in life. (Obamacare mostly brought people into ‘coverage’ or ‘healthcare access’ through Medicaid, not the mandate to buy insurance.  Tens of millions were still left out in the cold, without coverage, after implementation of Obamacare.  Those who managed to get coverage quickly realized that the ‘coverage’ offered was a useless financial gimmick which did not protect them from financial disaster in the event of injury or illness and cost them more than they could afford anyway.  It has become common among advocates to describe ‘healthcare access’ as a right, but of course that is not literally true.  First of all, no one needs ‘healthcare access’ or health insurance, but everyone needs health care.  The rights of Americans are listed in the Constitution, and health care is not among them.  However, there is no right to asphalt in the Constitution either.  None-the-less, I can drive from my house to the White House without interruption because we Americans have long since figured out that roads, highways, and freeways are infrastructure needed for the 21st century.  Likewise, we have generously funded health care for decades because it is infrastructure needed to make pursuit of life, liberty, and happiness possible.)

Once a government benefit has been extended, it’s nearly impossible to withdraw it. Thus, as other commentators have stated, we’ve crossed a critical tipping point in this country. Everyone must have access to full medical benefits. And society (that’s you and me) must pay for it. (No better illustration of this point about the impossibility of withdrawing a government benefit exists than the failure of Congress to withdraw the massive employer tax credits supporting the purchase of health benefits for employees after WWII.  Offering tax free health insurance was a way for employers to recruit women to work in the factories producing needed war materiel during the war without raising wages and causing inflation. That tax credit is now worth $500 billion each year and is the principle reason why health insurance became the featured health financing business model in the US.  When its costs are combined with those of tax funded programs like Medicare, Medicaid, CHIP, public employee health benefits, VA health care, etc, etc, etc, it is easy to see how Americans have come to be taxed at higher levels for health care than any other citizenry.  $2 trillion in taxes are spent annually on health care in the US, out of total health care spending each year of $3 trillion.  We don’t need more tax money to fund American health care, we need to spend the already available public funds more efficiently.  But efficiency is not possible with the for-profit health insurance business model, where overhead is routinely more than 25%.  In contrast, Medicare overhead is more like 2% to 3%.  Single payer health reform is administratively efficient and thus fiscally conservative.)

The trouble is, the only truly effective way to ensure that everyone has full access to healthcare is through a single-payer system. Essentially, put everyone on Medicare. That’s what the Democrats really want. And that may be where we’re headed. (That’s not what the democrats really want.  Twice in my lifetime there has been a democrat in the White House and democrats leading both houses of Congress, both times with serious mandates from the electorate to do something about health system reform.  Neither Pres. Clinton nor Pres. Obama even mentioned single payer.  Single payer advocates were arrested by democrat members of the US Senate when they showed up at Senate Finance Hearings in 2009.  Democrats as much as Republicans have acted to prop up the health insurance business model, repeatedly, down to their present defense of Obamacare.  But single payer is what the American people want, according to polling from several different sources.  And it is the only truly effective way to ensure that everyone has healthcare, and not just access to ‘coverage’.)

Republicans want a market-based system. But we’ll never have a true free enterprise system in healthcare as long as employers provide health insurance and as long as insurance pays for most healthcare needs. If insurance provided only catastrophic coverage, and we paid for most procedures out of our own pockets, then free-market incentives would be injected into the system. We’d shop around and pay attention to what various health services cost. (Both democrats and republicans want a ‘market-based health care system’ because the biggest source of political donations is the medical industrial complex.  Politicians of both parties are paid to have the opinion that market forces will solve our health system problems.  Trouble is, health care is not a commodity efficiently distributed through a free market.  None of the prerequisites required for market efficiency are true of health care.  Patients are not shoppers, or buyers who can beware.  Doctors are not (or should not be) sellers who are self-interested.  The transaction between ‘buyer’ and ‘seller’ in healthcare affects everyone (an economic principle called positive externality) and not just when the patient has tuberculosis or some other communicable disease which could infect others.  The vast majority of health care dollars are spent in ‘catastrophic’ situations (trauma, heart attacks, strokes, etc) and most procedures, even common ones like appendectomies, are priced way out of the buying power of middle class Americans.  Thus, the idea that catastrophic, individually owned health insurance (no employer benefit) will create a market situation is simply bogus.  Further, care of chronic conditions, like diabetes, determines the frequency of catastrophic events, like heart attacks and stroke.  So leaving every patient to fend for herself in ‘shopping’ and paying for care is foolishly increasing the rate we will need to use our pooled resources to care for emergencies.  Finally, what healthcare actually costs is not at all related to what prices are set by the sellers.  Because, unlike a real market commodity, there is no inverse relationship between demand for health care and its price.  Nobody buys an appendectomy because it is on sale.  And no price is too high for an appendectomy when in fact you have appendicitis.  Also unlike a market, high quality care costs less than poor quality care.  We have mediocre care in the US: too many clinically inappropriate services, too many patient injuries, and too few hospitals and clinics that consistently deliver care based upon current clinical science.  And therefore we have highest costs in the world.  Real health system reform begins with acknowledging that health care is not a market commodity and then improves health care quality and makes health care financing efficient.)

Healthcare has not been a free market system for many decades, and probably will never be. We’re not smart healthcare consumers. (Healthcare delivery has never been a free market system and never can be.  Beginning with the massive tax credits which propped up the growth of the private for-profit health insurance business model from its very beginning, and on through the Hill-Burton Act which financed hospital construction across the nation, and continuing through the myriad of state, local, and federal health programs of today, everything about our health system that works at all is attributable to public funding.  The private sector in health care has profiteered (in windfall style) from healthcare delivery in the US.  Warren Buffet calls our medical industrial complex a worm eating away at the inside of the American economy.  Indeed, American business is made less internationally competitive by our stupid insistence on employment health benefits.  The problem is not that Americans are poor healthcare consumers. People in need of healthcare are patients, not consumers, shoppers, or buyers.  Even with the internet, there is no way for a patient to arm him/herself with the clinical judgment necessary to make even simple decisions about their own care.  Doctors are trained for a decade in order to prepare to make those decisions for their patients.)

Perhaps the U.S. Senate can cobble together some miracle system that gets everyone covered, despite pre-existing conditions, and does it without busting the budget or massively raising taxes. But I doubt it. (Correct.  There will be no miracle from the US Senate.  As long as the premise remains that health policy must be market-based, must prop up health insurance, and must be federal, there can be no good legislative outcome.  The budget is already busted with the health care status quo.  All of the federal debt on into the future is driven by the growing corporate welfare given to the medical industrial complex by politicians from both parties. )

It may take a few years, but we’re probably headed to a single-payer system. And if everyone has coverage for everything, there will be little incentive to be wise healthcare consumers. To make up for this defect, the system will impose its own controls. Healthcare will have to be rationed. Panels of doctors (the infamous death panels) will determine what levels of care are appropriate in what situations – and what prices will be. (This is the dystopian nonsense that has kept anyone from seriously discussing single payer.  Look at every country that already has single payer health care.  They spend far less than we do, they have better outcomes, and they routinely rate their health care experiences higher than do Americans.  None of their citizens are going bankrupt because of illness or injury.  They don’t fund needed health services with bake sales or gofundme accounts.  Single payer allows for setting prices that are truly related to what health goods and services actually cost.  As opposed to American health care business as usual, where prices for a drug can rise 1000% overnight.  Death panels have always been a scare tactic  by the naysayers.  What is really scary is that business as usual in American health care leads to the unnecessary death of more than 100,000 patients each year who die of preventable injuries while they are hospitalized.  If the safety record of American hospitals were to be superimposed on the airline industry we would have a 747 crash every other week.  That is what is truly frightening.  Stop with the death panel nonsense.)

As in other countries with single-payer systems, we will see shortages and long waits for procedures.  Market incentives to improve service and innovate will not exist. (We have shortages in the US.  Rationing happens in every health care system, but especially in our faux market system.  We ration by ability to pay, meaning that for many, many Americans, there is no queu that they can even get into.  And for those who can pay, they often receive too much service, also at an enormous cost of life and limb, and money.  We Americans have a health care system that would rather make a sale than care for a patient.  Here, with perverse market incentives, we allow our patients with pneumonia to become more sick than necessary, because a hospital make more money when a patient hits the ICU.)

But everyone will have some government-determined level of healthcare access and service. Wealthy people, of course, will be able to pay for the best healthcare in the world. (The best healthcare in the world is not possible, even for the most wealthy individual, without a society that pays to make it possible.  No one can anticipate what kind of care they might need, or when they might need it.  Having all kinds of expensive care always available is out of the reach of even Bill Gates.  It is only available in first world economies where resources can be consistently devoted thereto.  Public funds should only be used for care proven to be safe and effective, and then only the cheapest alternative, which is always the highest quality.  Because, remember, high quality health care costs less, not more.  Wealthy people will, likely, pay for that new, unproven treatment, but they will suffer the consequences too.)

The system of healthcare we had before Obamacare had all kinds of problems. Responsible people recognized we were in a healthcare crisis. While solving some problems, Obamacare created a lot of new ones. The House plan made some improvements, but many flaws remain. The Senate is going to struggle mightily to do any better. (Obamacare solved nothing.  Trumpcare is no different.  We will not fall into single payer health reform because of these policy failures.  Those profiting from the status quo have enormous resources.  There will be much heavy political lifting before single payer can be achieved.  My preference, because it is constitutionally conservative, is that a state based system be allowed to evolve.  California already has a single payer bill before its legislature.  The US Senate would do all of us a favor by passing legislation to enable state based single payer health system reform.)

I suspect the healthcare issue is going to cause political headaches for many years to come. (I hope so.  I hope that politicians from both parties begin losing elections over their poor health care policies.)