Monday, April 3, 2017

The Thorny Issue of Health Care in the United States

 Mitsubishi A6M "Zero on the Akagi getting ready to commit an act that changed health care in the United States.

It's one of our long stated Rules of History that:
Holscher's Fourth Law of History.  War changes everything

And so too of health care.


We have been in the throws of a debate about national health care in the United States. But how did we even get here?

Let's start off with a common erroneous assumption. And let's go back before the Affordable Health Care Act  We do not have a health care system based on the private market.


No, we don't.

By that, I mean this.  There's a common perception that before the AHCA good old free enterprise governed the relationship between patient and doctor, not a bunch of government regulations.

Well, maybe there weren't a lot of government regulations, although there were certainly plenty, but free enterprise and health care went out the window for the United States with Japanese torpedoes at Pearl Harbor in 1941.

Okay, that's an exaggeration, but not much of one.

There seems to be a notion that prior to President' Obama's successfully getting the Affordable Health Care Act through Congress that the government wasn't in the role of providing health care.  Not hardly.  Let's take a look at the history of it.

The History of Health Care in the United States

The government has actually been in health care at least since 1798, when it crated what became the Public Health Service.  The original act actually addressed "sick and disabled seamen" and created hospitals for them,  but that's really significant in that it was a type of Federal nautical welfare, or perhaps we might consider it Federal workman's compensation.   Anyway you look at it, that very early Congress determined not to leave seamen to the whims of fate or the free market,if they became sick or disabled.

Seal of the Public Health Service, which recalls its origins.

Of course, most people weren't seaman at that time in the country's history, and if we go back far enough, say some point in the mid 19th Century, we'd find what people seem to imagine, kind of.  That is, assuming that they weren't in military service or seamen.  Or perhaps if they weren't veterans either, as public assistance of various kinds came to veterans very early on as well. Anyhow, the that most people had was one in which the patient paid the doctor directly and that's what the doctor took.  And indeed, as fable would have it, what the doctor took was sometimes a sack of potatoes or a chicken.  That means, of course, that being a physician was not as lucrative as people imagine it is now, but we also have to keep in mind that there was little the doctor could actually do for a lot of illnesses.  Indeed, for a lot of them nobody ever saw a doctor..  And even if they did, as we'll explore in a post about a century ago, often all that could be done was to make the patient somewhat comfortable.

The first type of health insurance that most Americans were exposed to of any kind came through their employments, if they were industrial workers.  Large industrial concerns and mines began to employ doctors in the late 19th Century and it became fairly common by the early 20th Century.  Sometimes seeing the doctor was a benefit of employment or sometimes a minor amount could be paid to the company for a right to see the doctor when sick. This extended, it's worth noting, to everyone employed by the company.

That was industries way of trying to keep its employees well so they could work.  I don't mean for that to sound as mercenary as it no doubt does, as that benefited employee and employer both, but that is why it was done.

About the same time some hazardous employments, like firemen, began to pool funds for true health insurance.  This was more in the nature of the employees taking care of themselves and more closely resembles something that we have now, modern health insurance.  By the early 20th Century something else we have now, Workers Compensation, entered the picture in various forms in various states.  Workers Compensation is really a type of health insurance as well, although for some reason people commonly do not think of it that way.

And while this was occurring, medicine was improving.

By the eve of World War Two all the elements of the current system were there.  Workers Compensation for industrial workers and health insurance for private individuals who were not so employed. Still, a lot of Americans would not have any kind of coverage at all and they simply paid the doctor if they saw him.

Of course, and still worth noting, medicine at that point is not what it is now.

And then came World War Two.

During World War Two Congress regulated wages. The reason was simple.  There was a legitimate fear that the employment shortage created by the war would spur inflationary wages and inflation itself.  Having just gone from disastrous deflation during the Great Depression  there was a real desire to avoid disastrous inflation during the war.  So wages were regulated.

But benefits were not.

For most people the benefit for being employed had been your job.  The thought of additional benefits was ill defined But during the war, they came into sharp focus.  Employers quickly caught on that they may not be able to offer employees of another company higher wages, but they could offer them better benefits.

And health care as a benefit of employment was born.

An insurance based system, what's wrong with that (if anything)?

Today, 55% of Americans are covered by health insurance provided through their employer.  That means nearly half are not, but by the same token that fails to take into account people who are covered through their spouses plans in one way or another.

So, what's wrong with that?

Well, maybe nothing, but there are things that this system, created by accident during World War Two, has a hard time doing.

And one of those things is controlling costs. 

Cost of medical care have been dramatically increasing in recent years and have massively increased since World War Two.  Before anyone gets blamed for that, its important to note that other things have also dramatically increased in costs.  Technology is often the reason.  Today's medicine is so much more advanced than it was in 1945 that the change, hardly appreciated, can barely be grasped.

All sorts of conditions that were lethal (even routine diseases, a post on that is coming up) are not even regarded as particularly serious now.  Heart attacks and strokes simply killed prior to the 1970s, they very often do not now.  The list could go on and on.

And, when this occurs, at some point the advancement, no matter how expensive, becomes the accepted standard of care.

So, again taking us back to 1945, a lot of people would just have endured, or even died, of a condition that would be treated successfully, and expensively, now.

In order for a system based on insurance to handle that, it's going to have high premiums.  No doubt about it.  Paying if you get a bad cold or broken arm is one thing.  Major surgery is quite another.

And hence the problem.

Over time, it's been absolutely necessary for insurance premiums to to increase, just as insurance itself has pretty much replaced the private payer.  Almost nobody goes in for major medical treatment and pays for it out of their pocket as almost nobody could afford to do it.

So we do not have a free enterprise system in health care at all, we have an insurance based one, and we did before the Affordable Health Care Act.  The cost of treatment is largely based on what health care providers can justify to insurance companies and the deals those companies can strike, or force, with the physicians.  

Where the free enterprise system almost enters the picture is at the consumer end. That is, where employers (mostly) and individuals purchase health care insurance.

That's restrained, however, by the fact that it has long been the case that each state controls who can write in their states. Therefore, health care insurance companies, which insure on the basis of "pools" of insured (all insurance does that) is limited by the size of their state's pool, and their state's demographics.  States with large populations have carriers that can spread the risk, but they may also have larger groups of people with specific expensive conditions.

The Affordable Health Care Act enters the picture

So, enter the Affordable Health Care Act.

Now, its long been the case that there are a lot of Americans who simply have no health insurance at all and therefore have much reduced access to health care.  The Federal government has long picked up quite a few of these folks, however, at the treatment end as ultimately the Federal Government is the carrier of last resort in emergencies. As untreated conditions can become emergencies the Federal Government picks up quite a bit of coverage on this end, but in bad circumstances. Anyone who doubts this should pay a visit to a city emergency room.  You'll find them full, quite often, with people who are there with bad colds and the like. The uninsured receiving emergency care.  And I don't say that lightly.  Those can indeed be emergencies.

The sense, anyhow, is that this insurance based system isn't working.  And that has been the sense for quite some time.  

Now, it should also be noted that other industrialized nations have been through this evolution, and it often is.  The United States is the only industrialized nation, and more accurately the only first world nation, that doesn't have some sort of nationalized health care system.  Different countries arrived at that point at different times, and I don't know the history for most of them.  I'll only note that the famous example of the British National Health Care system came right after World War Two.  But I'd also note that the British Labour Party, which brought it in, has always been far to the left of the American Democratic Party.

Anyhow, that doesn't automatically mean  that we should to that.

Well, anyhow, what have we done.

Well, we did the Affordable Health Care Act, which has received the popular moniker "Obamacare". The GOP has been promising to repeal it since it was enacted, and President Trump promised to "repeal and replace" Obamacare with something.  Notably, those two things aren't the same. If you simply repeal it you go back to the status quo ante, with a period of pretty dramatic disruption (maybe).  If you replace it, you basically accept that President Obama got it right, but didn't get it all right.  

Hence, I suppose, why the Republican run at repealing and replacing it just failed. The Democrats feel that the Affordable Health Care Act is basically fine.  The hard right in the Republican Party feels its a Socialist abomination (its not Socialist, however).  The rest of the GOP has been stuck with this as a right wing rallying cry and doesn't really quite know what to do.

So, indeed, what to do?

So where were we?

Well, before we look at that, we probably ought to look at where we were first. Was the system before the Affordable Health Care Act working?

Maybe, but not really all that well.  Lots of people weren't covered by anything. See the ER comment above.

Okay, before we move on, on that, let's first concede that American health care isn't and wasn't bad.  Part of the debate, quite frankly, is like the "free college" debate that Bernie Sanders sponsored in the last general election.  The United States, we noted at the time, actually sends more of its population to university than almost any nation on earth including those who have high public sponsorship of education. And the system, which is based on a four legged stool (chair?) of public assistance, student investment via debt, student investment via parental support, and student investment through work, has the advantage of having student investment in their future.  Investment by the subject isn't a bad thing.

And the European models also have the background that the labor/employer struggle in Europe was much more radical than that in the US.

So is this just a lot of complaining?

No, it isn't.  And a lot of the reason is health care costs.

Health care costs have climbed about 110% since 1990.  Health insurance premiums have necessarily climb with that cost increase.  So, carriers are caught in a bind in which they must increase premiums to keep up with costs.  People quit buying insurance when they can no longer afford it, even if they appreciate it, as at some point other things are more immediate.  All insurance, after all, is a species of gambling.  The carriers are betting the odds you won't get sick, and you are betting the odds you will.

So, on this system, if we go back to it, what can we do to address that?

I suppose before we go there, we should ask the question that normally isn't, should we even bother?

At one time the answer to that would have been mostly no, although it's clear that there's almost never been a time in American history when the government didn't worry about this some.  Starting in 1798 it worried about in regards to seamen. It worried about it in regards to veterans, and there have been other groups over time.  Something is at work  here, a least a little bit. And while a person can cast it in economic terms, what it basically amounts to is that the government, and the people, have always felt that if people couldn't take care of themselves, medically, well maybe we ought to do it for them.  It is, basically, a Christian incentive.  Its the same one, notably, that caused massive welfare efforts in Scandinavia or massive education efforts in Ireland. We basically feel that there are areas where we ought to step in and help. And that's basically a Christian motivation, although not everyone involved in Christian by any means nor is it the case that everyone even recognizes the roots of this impulse.

Anyhow, back to the old, pre AHCA system and trying to tweak it.

You can try to do something on the cost end, and indeed carriers already do.

It may come to a shock to many but very rarely on anything actually expensive to carriers pay the full bill. Rather, much more often, they negotiate a lower fee. This is the absolute rule, by the way, with workers compensation. Workers compensation never pays the full bill on anything significant but instead reduces it down.

This is frustrating to physicians, but it also means that the real cost of anything significant is often not really known very well. This is well known to attorneys, however, as defense lawyers have argued for years that the proper measure of damages for injuries resulting in medical care should be the amount paid, while plaintiffs lawyers have always argued its the amount billed.  Right now, the billed argument is the one that has been prevailing.  The lesson is that prices can and are lower under certain circumstances.

Which doesn't mean they are low.

And which does mean that there's a bit of a struggle over every bill, with the carrier doing their part to lower them. That hasn't kept premiums from climbing, however.  It may mean, however, that they haven't climbed as much as they could have.

This brings up the topic of price controls, but Americans are not going to go for that, at least not unless its part of a different package entirely. So I'll leave that there.

Indeed, we have to admit that part of the pricing situation is insurance created, but  under the law of unintended consequences. Carriers do, by and large, have the money to pay.  Regular people wouldn't.  That means that prices can be up there, just not much more up there than they already are. At least for right now.  And of course the price of things for doctors is likewise expensive.

Well, if nothing much more can be done there, what about on the insurance end.

There's definitely something that can be done on that end, and it has been suggested.  Let insurance carriers in this area compete across state lines.

It may come as a surprise to many people but health insurance carriers do not compete across state lines.  Indeed, very few types of insurance compete across state lines. Rather, carriers are individual licensed for different types of coverage in individual states. 

That means that some states have very small insurance pools.  A state like Wyoming or Alaska, for example, doesn't really have an adequate population base to guaranty much competition in health insurance.  If you let carriers cross state lines, it would create a completely different situation and it would almost certainly lower rates.

Would it lower them enough?  That's hard to say.  Anything I said on it would be a guess.  But, guessing, I'd guess it might lower premiums by 1/3d.

But 1/3d might not be enough to really fix the problem.

Well, what other things can be done around the margins, then, with the current system?  Or, as we didn't have the system that I'm speaking about any longer, what else could be done if we went back to the old system we had prior to the AHCA? 

Not much.  I could think of a few things to experiment with, but they'd be experiments, and the results would be doubtful.  About the only one I can think of that might have much of an impact, although it might also be very much subject to the law of unintended consequences, would be to expand coverage by public institutions and programs where there is a relationship with the insured. For example, every college and university in the US has a "student health" department already.  Perhaps that could be expanded in some fashion for students enrolled in any one institution, with a provision that if they ceased to be enrolled they could re-enroll in their parents plan.  The military service has a program called "Tri Care" that covered teh families of military personnel, and perhaps that sort of thing could be expanded, where it hasn't been already, to the families of public employees.  Maybe these are good ideas, and maybe they aren't, but its something that could be looked at. But that's about it.

Would it make much of a difference.  Maybe, but maybe not. And maybe only temporarily.

So if that's not going to do the trick, what else?


Well, we've tried the AHCA. Maybe the GOP grousing is just that, complaining, and its really all fine?

Is it success?  It doesn't particularly appear to be.  Indeed, most Democrats don't even seem to really take that position.

Premiums continue to rise and while it has expanded coverage, coverage isn't universal. 

The AHCA, just like the attempt at "repealing and replacing it" are basically private carrier based systems with the Federal government being the carrier of last resort.  So, it doesn't address the problems that caused the premium rise, which is, after all, the thing we're really trying to address.

It does, however, create some brand new problems, and that's why it likely ought to be heavily modified.  Maybe the system would work better if that was done.

One thing it did was to totally unrealistically, but kindly, legislate "you can't look at my preexisting condition" as an item for enrolling in insurance. That's kind, but massively stupid.

Insurance is completely based on risk.  And as noted, it's a type of gambling.  Writing into an insurance law that a preexisting condition can't be considered, ad a basis for rejection for private insurance, is like writing a life insurance policy law that would say you can't consider a person's terminal diagnosis at the time they buy a policy.

This is, necessarily, going to have to be considered by carriers one way or another.  It actually rewards some who have ignored their health at the expensive of everyone else and it pretends that the entire problems in costs outlined above do not exist.

Another thing the AHCA did is adopt the liberal insanity that human beings must have sex and can't control that any more than they can control breathing.

The entire history of human beings up until the last couple decades is evidence of the opposite. While liberals in our society believe that the only thing that prevents premature births in anyone over 13 years of age is chemical temporary sterilization or abortion, it wasn't up until those two things became common that loose behavior became epidemic.  While there have always been accidental pregnancies the overwhelming majority of births up until fairly recently were within marriages.  Overwhelming.

This is another topic but it gets both into the law of unintended consequences and human behavior.  The cheap availability of contraceptives has actually boosted the number of children out of wedlock as the connection between sex and pregnancy became disassociated in the public's mind.  Indeed, in the entertainment industry they have no relationship at all, and its very rare for that industry to concede that sex can result in babies.  But it does.

Because it does, and because in the public mind its gone from an acknowledged risky conduct in some circumstances to some sort of public right, there's come to become a public concept that there's a public right to birth control. That's nuts.

It's not the only area that's nuts, but its one of them.  There's no reason that a publicly forced health care system should have to provide anything to people in regards to sex, except maybe in the case of catastrophic illness associated with it. Otherwise, hey, you chose to proceed so proceed at your own risk.  

Eliminating coverage under the AHCA for things of that type would go to reduce costs.  If you drop coverage for pregnancy or preventing it, and drop required coverage for anything that's not catastrophic, or at least serious, the costs go way down.  Taking that approach would raise liberal and feminist hackles, but it might make the AHCA capable of working.


Nationalizingng Up the System.

Any other approach begins to get you into the really radical, from the American prospective, but the norm for most of the world's. True nationalized health care.

Americans generally don't like the concept of a really sweeping state run system, but if the systems above don't work, and no system at all isn't an option, that's what's left.

There's a bunch of different ways to do this, but probably the one that would work the best in the US is a system like the Canadian one, which Canadians, in spite of claims down here in the US, really like.  Basically, it's sort of like a giant state administered Workers Compensation system. 

You could do that any number of ways, but the best way would probably be to have everything administered by respective states. So there would be fifty systems, not one, but they'd be easily transportable.  If it was a directly administered state system, you'd probably have to tax nationally for it but have it run by the state.  Alternatively, it could be done by private carriers that bid for entire state, as the insured pool.  That may be more efficient.

In order to make such a system work in a country as large as our, it would have to exclusive where it applied, but also limited in coverage.  Sick with the flu and have costs over, let's say, $250?  You are covered.  Want birth control pills.  You aren't.  Wisdom tooth need to be removed?  You are covered.  Want your boobs inflated?  You aren't.

Of course, nobody is going to propose such a system any time soon. And doctors would really hate it, as effectively there'd be price control, which amounts to wage control, at the Federal level.  A person can get into that, but it is the case that simply being a physician is expensive.  Some make large sums of money, but some don't, and that often varies by specialty.  That would be a problem.

And one of those problems is that medical malpractice insurance is expensive.  It's likely that the insurance for pharmaceutical companies is very expensive. That's because doctors and drug companies are targets for lawsuits.  The point here is that if you drive their returns down, you have to think about driving their costs down.  That can likely be done through damage caps and the like, but lawyers hate that idea.  But that's likely part of it.  I.e., you can't ask surgeons who were making seven figure incomes to come down to the bottom half of six figures and not give them something back in return, and reducing exposure to liability would seem to be part of that.

Do we need to do anything at all?

To the extent that President Obama succeeded in this debate it appears to be that it's now accepted that the Federal Government must have a role in this area.  Indeed, it appears to be the case that large segments of the GOP, including the President, accept that the Federal Government has some role in providing health care (which in fairness it was already doing prior to the AHCA) and that Americans have a Federally protected "right" to health care.

Do they?

Well, if it's accepted at the Federal level, they will, and maybe now do, but it's worth noting that the Federal Government now is in all sorts of things that have created entitlements that really ought to be questioned pretty heavily.  Consider the Federally supported Free and Reduced Lunch program that provides, well, free and reduced cost meals to school children. Yes, we want school children fed, but let's be honest. This program started off to help the really desperate, but if you live an area where its every been in the news, and its been in the news here, its regarded as a right by a lot of people now, including a lot of people who are not recipients.  While this example fits into the crabby "when I was young" type of example, the truth is that when I was young parents who didn't send their kids to school fed, and with lunch, needed to have a really good excuse. Sever poverty was a good excuse, and somebody would have taken care of it, but any other excuse would ultimately have caused a visit from the authorities.  In my view, this program has lapped over the bounds of tax funded charity into something else, and thereby isn't really fair to the taxpayer.

Now, none of the health care proposals that have been floated seriously operated such that they had full Federal funding, but the reason the right wing Republicans balked is that they simply feel that the government has no role.  At least their honest about that, whether you agree with them or not.  The rest of the GOP and all of the Democrats feel otherwise.

This is a trickier topic than it might seem at first, as there are clearly areas where the Federal government shouldn't be playing a "health" care role.  The big one is in regards to sex and reproduction.  Democrats in particularly just go all giddy about this and claim that it's absolutely the case that the Federal government ought to blasting out birth control pills for free or via insurance the way that a AC-130 blast out ammo, because in their view everyone who is an adult or nearly an adult can't control their lustful thoughts and has no responsibly for them.  But, in a more thought out system, there's no rational reason to require one group of people to subsidize another's sex.  None.  Particularly when we consider that some people have serious moral objection to abortifaciants, which include at least some birth control pills.

AC-130. . . the Democratic model of health coverage in the reproductive arena.

Otherwise, however, it may be the case that we've now reached a competitive point where health care has become so expensive, while also being so effective, there's no alternative but for national governmental action, of some sort.  The alternative might be to let people suffer and die, which isn't a just alternative.

Stuck in the road

So, anyway, no matter how you look at it, it would appear that we're at a fork in the road and even though Congress has largely decided to sit in the road and hope a truck doesn't come along, it will.  If we stick with the AHCA we may be cruising for it to break down.  The GOP certainly thinks so and a lot of Democrats are admitting it needs fixing.  If we go back to the old insurance based system more and more people are likely to be forced out of it and we'll need to fix that too, with some of the fixes being pretty radical.  The most radical fix of all would be to go to a system modeled on Canada's, which would work, but which would be hated by most conservatives in the country and most physicians as well.

It's enough to give you a headache.

But that won't be covered.

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