A Healthcare Plan I'd Like to See

Shay at Booker Rising calls me to task for my post on McCain and healthcare. But she misinterprets my viewpoint – which is probably because I didn’t actually say what kind of healthcare proposal I’d most like to see. So, here it goes…

First, I do think the federal government has a role to play. This is a national problem involving millions of citizens, thousands of businesses and plenty of interstate commerce. However, I do not support nationalized healthcare as that just reconfigures the system without addressing the cost/quality conflict at the heart of the current problems.

Healthcare costs are high for a variety of reasons. Some are uncontrollable, such as the increasing number of older Americans whose advancing age requires a great amount of medical care. Others are directly related to the high quality of care we’ve come to expect: we use the newest (thus most expensive) technology and produce highly skilled (thus well-compensated) medical professionals. We could fairly easily lower costs if we substituted older technology and less-skilled medical providers, but we’d have to settle for lower quality care.

In many ways, we’re already making the cost/quality tradeoff. Healthcare providers, following the demands of the free market, are increasingly using nurse practitioners in lieu of board certified physicians and hiring lightly trained medical assistants over more highly trained nurses. Many insurance companies take a more draconian approach, telling patients and doctors what level of quality care is acceptable based partially on what the insurance company is willing to spend. That kind of cold, cost-benefit analysis results in the rare but heart-wrenching stories of people suffering because they were denied treatment.

Using fewer physicians and registered nurses can only go so far until quality of care becomes dangerously insufficient/incompetent. There’s little reason for the federal government to force even more lesser-trained providers into the system. Similarly, mandating what insurance companies must pay for would require a massive government intrusion into private business with unknown and likely undesired results. The solution, therefore, will not come from artificially controlling the cost/quality relationship. Instead, we need to look at the risk management aspect.

Where the plans of Barack Obama and Hillary Clinton go wrong is in their assumption that lack of affordable insurance for millions is the core problem when it’s actually just the most obvious symptom of larger issues. Making sure every American has insurance is a nice idea but without addressing the underlying risk/reward problems, simply shoving more people into an already unbalanced system will decrease the quality of care for everyone.

The lack of affordable health insurance is not due to greedy insurance companies or the quality-control initiatives of theAmerican Medical Association or even because we Americans are leading relatively unhealthy lives (the obese and smokers actually cost less to treat over their lifetime than do more healthy individuals). Health insurance is expensive because high quality healthcare is expensive. Insurers must take on significant risk and thus charge significant prices. The most expedient way to lower prices is to spread the risk over larger numbers but, thanks to ridiculous regulations, many Americans are not allowed to buy insurance as part of a group and instead must opt for staggeringly expensive individual plans.

So, step one is deregulation/re-regulation. Allow individuals as well as small businesses to band together with others and buy group rates. More radically, instead of requiring businesses to provide health coverage for their employees, we can sever the business/insurance relationship and let each individual citizen choose a plan based not on where they happen to work but on their healthcare needs.

Without large corporations footing the bill, insurers would have to innovate to create plans affordable for individuals. Plus, individuals would have fully portable plans that would allow them to change jobs or start their own businesses without fear of losing coverage. A more fluid and less risk-adverse workforce would be a boon to our economy, as would freeing our businesses from the burdens of paying for healthcare.

Deregulation alone will not be enough. Step two is increasing the level of choice available to consumers and the level of responsibility expected from them. Right now, health plans are stratified but not particularly customizable. It’s a collection of prix fixe menus with designated courses at each price level but no real choice. This has the effect of disconnecting the consumer from the real costs of what they are purchasing. If it’s covered, they’re going to opt for it, even if it’s not medically necessary. The current coverage system creates a disconnect in patients’ minds between care and cost and is actually one of the leading causes of higher healthcare expenditures.

However, if more customizable plans were available, individuals could choose coverage based on the level of risk they were willing to assume and the level of premium care they desired. There could even be different deductable levels for different procedures and medications, rather than one flat deductable. That way, patients would know the cost of the care they seek and have to take personal responsibility for choosing excessive procedures and medications. This, of course, is not something the government could mandate but it could encourage innovations by providing tax incentives to those companies willing to reform their coverage.

The final significant way the federal government can help is through providing tax credits which individuals and families can apply to health insurance (John McCain’s otherwise gaunt plan, has this provision). Additionally, the government can expand health savings accounts allowing families with more expensive coverage or additional health needs to put aside extra tax-free funds.

Clearly and inarguably, what I’ve laid out here has huge holes. This is a profoundly long blog post but a terribly insufficient description of a healthcare plan. My thoughts are really nothing more than the very basic outlines of ideas I’d like to see developed and advanced on the federal level – I realize they are not devoid of fallacies or complications and I do not consider them anywhere near a complete list of available remedies. There is a lot of room for states to promote their own plans and take other measures such as preventative care initiatives and malpractice lawsuit reform. There is also a lot of room for free market solutions from both insurers and providers. What’s important is we avoid restricting the marketplace of ideas by federalizing the healthcare system and cutting out the vast majority of the innovators in this field.

As a general rule, I like a narrow federal government focused more on clearing the road of obstacles than trying to design and drive my car. Right now, Obama and Clinton are focused on building the car while John McCain is either unaware of the huge piles of junk blocking the way or is unmotivated to develop the bold actions needed to remove them. I think the best solutions will come from a conservative-leaning mindset, but I’m still waiting for a Republican to champion pro-market, limited government ideas that can win out against the Democrats’ big government plans.

McCain's Healthcare Problem

Michael Reynolds nails John McCain to the wall on the issue where he’s most vulnerable: healthcare. My number one reservation about McCain has been his less-than-comprehensive healthcare proposal. It’s not even really a proposal, it’s some superficial adjustments and free market bromides.

You don’t have to be a policy expert to know our healthcare system is ineffectual. Despite our world-class technology and highly-skilled physicians, far too many Americans have trouble obtaining basic care. We have a high cost, high quality, low access system. This is not only creating undo hardships for many citizens but is weighing down our global competitiveness by creating an immobile and risk-adverse workforce at just the time job fluidity and entrepreneurism is most needed.

We’re long past the point where tweaks might work – heck, incessant regulatory tweaks are one of the reasons we’re in this mess. We need big ideas now. Unfortunately, John McCain doesn’t seem to have them.

I’m not specifically arguing for Barack Obama’s or Hillary Clinton’s approaches. I think both focus too much on creating new layers of bureaucracy and not enough on removing the unnecessary bureaucratic obstacles already in place. However, at least the Democrats recognize the existence of a problem as well as the American people’s desire for a solution. McCain is apparently content suggesting the same “the system ain’t really that bad” proposals advanced by Republicans and others who just haven’t been paying attention.

By no means does McCain’s lack of a comprehensive healthcare plan disqualify him from serious consideration (to be fair, it’s just February and this wasn’t an issue important to winning his primary). But I’ll be listening to him. Just as I hope the eventual Democratic nominee develops a more rational Iraq plan during the general election I hope McCain develops a more workable healthcare plan. His failure to do so may not cost him my vote but it could very well cost him the election.

Don't Punish Parents for Overweight Kids

Well, that didn’t take long. Less than a month ago I predicted that we’d soon see an American case similar to the British decision to remove an overweight boy from his mother’s care (British authorities later decided to leave the child with the mother). Now, in Spartanburg, North Carolina, authorities are threatening to take a grossly overweight seven-year old away from his mother (CNN video link) if the boy doesn’t show some weight loss in the next two weeks.

The mother in the Spartanburg case has seen numerous doctors about her son’s weight and claims to do everything she can to regulate his diet and make sure he’s exercising. If you’ve watched the video, you know the boy is massive in an almost unnatural way. The mother herself is by no means thin but it’s hard to believe, even in an unhealthy eating environment, that any seven-year old could get as huge as the one in this story.

Without knowing more than what’s reported by CNN, I have to say that this looks more like a medical problem than a case of parental neglect. But even if the mother is letting he child have too many candy bars, should she lose custody of her son? Is unhealthy eating to be treated with the same government interventions as purposeful malnutrition and physical abuse?

As I said when last I wrote on this topic, if the government is going to get involved in our national weight issue, turning parents into the enemy is not the way to go. I have no problem if municipalities and larger governmental organizations want to provide funds to help parents with overweight children. But to take those children away from a loving family is a terrible solution.

Should Childhood Obesity be Considered Neglect?

A mother in Great Britain might lose custody of her son because the boy is significantly overweight. Officials are treating the case as one of possible child neglect.

Despite this story coming from the other side of the Atlantic, it certainly raises an interesting question. Should parents be held liable for childhood obesity? Here in the United States, the NIH has already declared the problem an epidemic as one in five American children are considered obese.

No one argues whether or not obesity in children is a serious health problem. It is. And parents simply have to be on the frontline in preventing the problem. But considering obesity as a sign of neglect seems more than just a little bit shortsighted.

Hopefully such a case won’t happen in the U.S. But with local governments already banning trans fat and some even considering a fat tax on junk foods, some municipality somewhere is bound to go after parents of overweight children.

But if the government is going to get involved in our national weight problem, reactive measures are not the way to go. Giving parents more tools (better/safer local parks, information campaigns, etc.) and providing children with more physical education in schools is far better than turning parents into the enemy.

The thing we have to remember about obesity is that it’s not cut-and-dry. What constitutes “fat” and which children actually suffer health risks are not matters of scientific certainty. Therefore, public policy cannot be rigid either.

A Few More Healthcare Thoughts

Blog-friend Denis Sanders of Neomugwump emailed me regarding my healthcare post. He commented:

Do you suggest a single-payer Canadian style system? There's a part of me that agrees there needs to be government involvement, but shudders at having the federal government assume such a big role in handling something like health care. (It's the Republican in me, I can't help it.)Many on the Democratic side like the Canadian system, but it has it's drawbacks as well.

…

I'm not crazy about the single-payer plan, but there are other options. The free market alone can't do this and as a little-known Republican named Abe Lincoln once said, what the individual can't do, government must.

I thought I’d share my response as I believe it better clarifies my thinking on healthcare, an issue I’ve researched and given a lot of thought to over the last few years. I responded as such:

The Canadian system has a lot of problems as well and I too shudder at the idea of the government running healthcare. I don't think a single-payer system is the only option. But I do think we need pretty radical change and I'm open to a heavily subsidized system and even a government program that competes with private programs (think US Postal Service vs. UPS). I don't have an easy answer or even a preferred one at this point.

But I do think we need to detach healthcare from employment. That's not to say an employer can't help you pay for a plan, but we shouldn't all be tied to the plan chosen by our employer. Nor should we face the threat of losing healthcare if we change jobs or go to work for ourselves. In the evolving economy, workers need flexibility in order to succeed. The current healthcare system limits flexibility and choice.

For those who wonder how we would pay for a new system, I’d point out we already bear huge hidden healthcare costs. Every product we buy is more expensive to help companies pay for their employees' healthcare. All our wages our depressed in order to help companies afford our healthcare. Our healthcare bills are inflated to help cover the costs of all the uninsured people who need emergency services but can't pay for them. The value of several major American companies has significantly decreased because those companies cannot afford the benefits and specifically the healthcare promised to their pension holders and current employees.

A reasonable system would help eliminate all these hidden costs. If done right, the net effect would be to help the economy and increase the prosperity of workers of all classes -- not to mention it would improve American health.

Changing our healthcare system is not an easy task. But it's been built like a Jenga tower and will come down one way or another. I'd rather dismantle and rebuild than hoping the mess stays steady as we pile on new pinpointed regulations and complicated, targeted benefits.

Hey Dems, How About Fixing Healthcare?

I’m constantly amazed that healthcare is not a bigger issue in American politics. I simply can’t think of any area of American domestic policy that’s more screwed up. A personal experience illustrates this fact.

Last Fall my wife left her fulltime job to become a private contractor. Her new job has no benefits. I’m a freelance writer, so I have no benefits either. As such, we’ve been on COBRA and, to keep our old healthcare plan, we’ve been paying an amount that’s higher than any other monthly bill save our mortgage. Higher than our food costs. Higher than all our utilities combined. Higher than our two car payments combined.

And this is not a fancy plan. The deductible is high and, after that, the plan pays only 80% of in-network costs. We could get a cheaper plan but, as we have learned, only two insurance companies will insure for maternity in Texas. If you want to have a baby in Texas and have the costs covered, you have to pay a huge monthly premium.

I shouldn’t say “have the costs covered.” I should say, have a few costs covered. After the birth of my daughter, we owe various providers thousands of dollars. Those charges cover our 20%. But here’s the infuriating part: because of special contract agreements insurers have with the hospital plus the deductible costs we’ve paid, our insurance company will end up paying LESS than we will for the labor, delivery and post-natal care of my daughter.

Now, we’re going to be just fine. We’re financially secure. But it is a burden and one that’s requiring us to be pretty frugal for awhile. I can’t imagine how anyone in worse financial shape can afford health insurance if they don’t have a job with benefits.

I understand that it’s not cheap to provide health care. What I don’t understand is why politicians continue to offer band-aid solutions when something far more radical is needed. My personal experience is just one minor example of a healthcare system completely out-of-sync with modern American needs. Tens of thousands of other examples paint and even drearier picture.

Those who say there’s a free-market solution misunderstand that the entire system operates outside of anything resembling the free market. Thousands of regulations and rules are in effect from the municipal level all the way to the federal level. Furthermore, most healthcare is not a consumer good and cannot be expected to respond rationally to the usual free-market forces. There is no escaping that this is a problem for government policy to solve – as much as I wish it were otherwise, we cannot free ourselves from the web of market complexities and government regulations without resorting to serious governmental intervention.

If the Democratic Congress really wants to help the working and middle-class American, they’d focus on healthcare. Sure, a minimum wage hike is a nice bit of feel-good legislation but the real vice-clamp on Americans is not our wages. It’s our health costs.