I have watched a cartoon that is popular on YouTube called Why We Need Government-Run Universal Socialized Health Insurance, which you can watch here:
Although some valid points are made, I think the central argument advanced is self-defeating, for reasons I will explain below. I also take issue with some of the claims, perhaps the foremost being the specious claim that Medicare is superior in terms of administrative cost. Moreover, rather than serve as a model for reform, Medicare should scare the bejesus out of us, as it is running at a deficit (which Congressman Jim Cooper, a Democrat from Nashville, puts in the trillions - $38 trillion when coupled with the unfunded liabilities of Social Security).
Returning to the cartoon's main argument: The major claim to the rectitude of giving government the prime role in health care delivery is the so-called "essential-ness" of the service. The cartoon enumerates other such essential services: police, fire, and education. Curiously, food and shelter are not named. If "essential-ness" is a key argument that should direct our rational faculties toward embracing the need for government delivery of the essential service, then why not abolish for-profit farmers, grocery stores, and restaurants? And for-profit realtors, builders, and lenders? Can you really argue that food and shelter are any less essential than police, fire, and education? Also, to work within the analogy advanced, isn't there a role for smoke detectors, fire extinguishers, emergency escape ladders, and safety devices that mitigate fire risk - for which individuals are responsible - before we rely on the fire department? Home alarm systems, guns, dead bolts, and guard dogs - for which the individual is responsible - before we rely on the police? Books, home instruction, educational games - for which the individual is responsible - in addition to formal education?
And the word "profit" is bandied about as if it were a curse word. This is something that I understand as an emotional argument, but not as a rational one that withstands scrutiny. Take, for example, Facebook, where users reunite with classmates and friends they haven't seen for decades, sharing photos and memories, taking quizzes and playing games. Don't you think the good people who developed Facebook did so in hopes of making money - that is, turning a profit? In exchange for supplying a desirable social networking site of which users voluntarily partake, they sell advertising, and thus do they make money. Take away the profit motive, and do you think there would be a Facebook? Or a similar site? Do you offer your work skills voluntarily, or in exchange for money? If you had a bright idea that could make money, would you try to profit from it if you could? So why is "profit" a dirty word?
As to a second key argument, I regard it as self-defeating (and, paradoxically, I think is the best argument made): because catastrophic illness or injury could wipe any one of us out financially, the risk should be pooled, and that is the role of insurance. Precisely! But that is not the role that "insurance" currently plays in our health care system. I am all for insurance that pools risk for catastrophic costs, but I do not like the current system whereby, in exchange for insurance against that risk, nearly all elements of health care consumption are clustered under the umbrella of so-called "insurance". Health insurance companies as they currently operate are better understood as third-party payers (you and your doctor/hospital/health care provider being the first two parties). If there was no hope for profit, there would be no health "insurers". The problem becomes that the third-party payer, in order to turn a profit, has to control costs; this reduces (crudely) to (a) attempting to deny the covered party treatment, or (b) limiting the compensation to the payee/provider. The third-party payer is thus in some sense the enemy of both the covered patient and the provider of health care. In our system, it is only competition among these third-party payers that gives any leverage to the first two parties. But it is still fundamentally an irrational system that needs to be fixed (without getting into regulatory burdens that further worsen the dynamic for all parties involved). Why ceding control to the government is viewed as a rational solution escapes me as both an economic matter and as a matter of what either the doctor or patient would find desirous.
Why wouldn't the government's assumption of a central role be a good thing? There are many reasons, and I will give a fairly superficial explanation for some of the more important ones. First, the government does not make policy based on what is most rational, but on political considerations (which, for politicians whose paramount interest is staying in office, is what they regard as most rational ). One such consideration would be responsiveness to interest groups with clout (e.g., if the AARP fought to get coverage for hip replacements, that could well come at the expense of, say, Pap smears, which are consumed disproportionately by a demographic not represented by AARP), whether the decisions made stand up to scrutiny as a medical or cost containment issue or not. Cost would become very quickly a huge concern, and cost control would necessarily become part of the equation (if you object to "death panels", try "denial of service" panels instead - same basic idea and same outcome). And as the final arbiter of what is offered and paid for, there is no appeal or recourse if you disagree with the government's decision.
I think also one of the most overlooked downsides of government control is something with a whiff of "the dog that didn't bark", namely, with cost control a paramount concern, money won't be spent on alternate therapies or new innovations that could one day supplant, both in terms of efficacy and cost, the current treatment modality. Cheap antibiotics to eradicate Helicobacter have supplanted pharmaceuticals, which had supplanted surgery, for ulcer management. But what if gastric resection was reimbursed in a nationalized system? Who would risk developing Tagamet, or an antibiotic? How about something relatively new, like a proton-beam "knife", which costs a small fortune now. Could it one day replace all manner of oncologic surgery now done with a cold steel knife (as laparoscopic surgery has done)? How will we ever know if the cost at the outset is an order of magnitude higher for the proton-beam - research into further refinements would never be funded, because its use in actual practice would have such a small chance of being reimbursed - and there would be great uncertainty as to whether the reimbursement would justify the investment. Medical innovation would slow to a crawl. We would be frozen in amber with what we have now, and the technologies that we should have ten or twenty years from now will never see the light of day. Not that we would know precisely what we are missing, but we have examples today in Britain of how this dynamic plays out there, to the detriment of patients.
There is a separate matter that is not addressed in the cartoon, but is another one of those easily overlooked things that it is worth pausing to ponder. Countries that have tried a government-run system, such as Canada and England, have had two great advantages that we can't possibly have: first, they can slipstream behind our innovation (driven by that dastardly profit motive, and, to be fair, federally funded basic research), and second, they don't pay full freight for their own national defense - we take care of most of it for them. And yet the incoming president of the Canadian Medical Association regards the system as being in crisis and in need of major reform, and horror stories from the NHS abound (yes, there are good physicians and hospitals in Britain, but the system as a whole is poor). So, with smaller, more homogeneous populations; with us paying for the bulk of their national defense; and with them free-riding on medical innovations that either originate here or are refined here - they can't make this type of system work. How would we?
What is really implied in the cartoon is that catastrophic insurance is a necessary component of health care. Hear hear! We don't have an auto insurance crisis, or a homeowner's insurance crisis, or a life insurance crisis - even though all those companies write policies to - wait for it - make a profit! So no, I don't think profit is a problem, particularly when the system is structured properly. If health insurance companies really wrote insurance policies, I am sure that it would not create a crisis. What does a properly structured health insurance system look like? I have some ideas which I will develop in future posts, but there are bills already in Congress (Wyden-Bennett, HR3400, and the Patients' Choice Act, for example) that are better than what is being proposed. Senator Bob Corker is pushing for sensible incremental reforms that have bipartisan support. We should look outside of the Anglosphere for models as well; Germany seems to have a decent, if imperfect, mixed public and private system that might be tailored to work here. Any approach should, at a minimum, meet the eight criteria that President Obama has laid out (and which, ironically, HR3200 fails to do - it leaves 17 million uninsured and it adds to the deficit).
Let's not forget that the administration tried to rush HR3200 through Congress before anyone had read the bill, before there had been adequate scrutiny of the details, and then caterwauled when citizens with legitimate concerns voiced those concerns this past month. That is not what healthy debate in a democratic society looks like - some might say that it was downright un-American. Some guy posting a cartoon advancing his argument on YouTube, and some physician sitting in his den responding, and thousands of interested observers adding their critiques - that's what it's about. So it's your turn - offer your critique, and let's arrive at a better answer than single-payer, government-run, post office-quality health care.
Although some valid points are made, I think the central argument advanced is self-defeating, for reasons I will explain below. I also take issue with some of the claims, perhaps the foremost being the specious claim that Medicare is superior in terms of administrative cost. Moreover, rather than serve as a model for reform, Medicare should scare the bejesus out of us, as it is running at a deficit (which Congressman Jim Cooper, a Democrat from Nashville, puts in the trillions - $38 trillion when coupled with the unfunded liabilities of Social Security).
Returning to the cartoon's main argument: The major claim to the rectitude of giving government the prime role in health care delivery is the so-called "essential-ness" of the service. The cartoon enumerates other such essential services: police, fire, and education. Curiously, food and shelter are not named. If "essential-ness" is a key argument that should direct our rational faculties toward embracing the need for government delivery of the essential service, then why not abolish for-profit farmers, grocery stores, and restaurants? And for-profit realtors, builders, and lenders? Can you really argue that food and shelter are any less essential than police, fire, and education? Also, to work within the analogy advanced, isn't there a role for smoke detectors, fire extinguishers, emergency escape ladders, and safety devices that mitigate fire risk - for which individuals are responsible - before we rely on the fire department? Home alarm systems, guns, dead bolts, and guard dogs - for which the individual is responsible - before we rely on the police? Books, home instruction, educational games - for which the individual is responsible - in addition to formal education?
And the word "profit" is bandied about as if it were a curse word. This is something that I understand as an emotional argument, but not as a rational one that withstands scrutiny. Take, for example, Facebook, where users reunite with classmates and friends they haven't seen for decades, sharing photos and memories, taking quizzes and playing games. Don't you think the good people who developed Facebook did so in hopes of making money - that is, turning a profit? In exchange for supplying a desirable social networking site of which users voluntarily partake, they sell advertising, and thus do they make money. Take away the profit motive, and do you think there would be a Facebook? Or a similar site? Do you offer your work skills voluntarily, or in exchange for money? If you had a bright idea that could make money, would you try to profit from it if you could? So why is "profit" a dirty word?
As to a second key argument, I regard it as self-defeating (and, paradoxically, I think is the best argument made): because catastrophic illness or injury could wipe any one of us out financially, the risk should be pooled, and that is the role of insurance. Precisely! But that is not the role that "insurance" currently plays in our health care system. I am all for insurance that pools risk for catastrophic costs, but I do not like the current system whereby, in exchange for insurance against that risk, nearly all elements of health care consumption are clustered under the umbrella of so-called "insurance". Health insurance companies as they currently operate are better understood as third-party payers (you and your doctor/hospital/health care provider being the first two parties). If there was no hope for profit, there would be no health "insurers". The problem becomes that the third-party payer, in order to turn a profit, has to control costs; this reduces (crudely) to (a) attempting to deny the covered party treatment, or (b) limiting the compensation to the payee/provider. The third-party payer is thus in some sense the enemy of both the covered patient and the provider of health care. In our system, it is only competition among these third-party payers that gives any leverage to the first two parties. But it is still fundamentally an irrational system that needs to be fixed (without getting into regulatory burdens that further worsen the dynamic for all parties involved). Why ceding control to the government is viewed as a rational solution escapes me as both an economic matter and as a matter of what either the doctor or patient would find desirous.
Why wouldn't the government's assumption of a central role be a good thing? There are many reasons, and I will give a fairly superficial explanation for some of the more important ones. First, the government does not make policy based on what is most rational, but on political considerations (which, for politicians whose paramount interest is staying in office, is what they regard as most rational ). One such consideration would be responsiveness to interest groups with clout (e.g., if the AARP fought to get coverage for hip replacements, that could well come at the expense of, say, Pap smears, which are consumed disproportionately by a demographic not represented by AARP), whether the decisions made stand up to scrutiny as a medical or cost containment issue or not. Cost would become very quickly a huge concern, and cost control would necessarily become part of the equation (if you object to "death panels", try "denial of service" panels instead - same basic idea and same outcome). And as the final arbiter of what is offered and paid for, there is no appeal or recourse if you disagree with the government's decision.
I think also one of the most overlooked downsides of government control is something with a whiff of "the dog that didn't bark", namely, with cost control a paramount concern, money won't be spent on alternate therapies or new innovations that could one day supplant, both in terms of efficacy and cost, the current treatment modality. Cheap antibiotics to eradicate Helicobacter have supplanted pharmaceuticals, which had supplanted surgery, for ulcer management. But what if gastric resection was reimbursed in a nationalized system? Who would risk developing Tagamet, or an antibiotic? How about something relatively new, like a proton-beam "knife", which costs a small fortune now. Could it one day replace all manner of oncologic surgery now done with a cold steel knife (as laparoscopic surgery has done)? How will we ever know if the cost at the outset is an order of magnitude higher for the proton-beam - research into further refinements would never be funded, because its use in actual practice would have such a small chance of being reimbursed - and there would be great uncertainty as to whether the reimbursement would justify the investment. Medical innovation would slow to a crawl. We would be frozen in amber with what we have now, and the technologies that we should have ten or twenty years from now will never see the light of day. Not that we would know precisely what we are missing, but we have examples today in Britain of how this dynamic plays out there, to the detriment of patients.
There is a separate matter that is not addressed in the cartoon, but is another one of those easily overlooked things that it is worth pausing to ponder. Countries that have tried a government-run system, such as Canada and England, have had two great advantages that we can't possibly have: first, they can slipstream behind our innovation (driven by that dastardly profit motive, and, to be fair, federally funded basic research), and second, they don't pay full freight for their own national defense - we take care of most of it for them. And yet the incoming president of the Canadian Medical Association regards the system as being in crisis and in need of major reform, and horror stories from the NHS abound (yes, there are good physicians and hospitals in Britain, but the system as a whole is poor). So, with smaller, more homogeneous populations; with us paying for the bulk of their national defense; and with them free-riding on medical innovations that either originate here or are refined here - they can't make this type of system work. How would we?
What is really implied in the cartoon is that catastrophic insurance is a necessary component of health care. Hear hear! We don't have an auto insurance crisis, or a homeowner's insurance crisis, or a life insurance crisis - even though all those companies write policies to - wait for it - make a profit! So no, I don't think profit is a problem, particularly when the system is structured properly. If health insurance companies really wrote insurance policies, I am sure that it would not create a crisis. What does a properly structured health insurance system look like? I have some ideas which I will develop in future posts, but there are bills already in Congress (Wyden-Bennett, HR3400, and the Patients' Choice Act, for example) that are better than what is being proposed. Senator Bob Corker is pushing for sensible incremental reforms that have bipartisan support. We should look outside of the Anglosphere for models as well; Germany seems to have a decent, if imperfect, mixed public and private system that might be tailored to work here. Any approach should, at a minimum, meet the eight criteria that President Obama has laid out (and which, ironically, HR3200 fails to do - it leaves 17 million uninsured and it adds to the deficit).
Let's not forget that the administration tried to rush HR3200 through Congress before anyone had read the bill, before there had been adequate scrutiny of the details, and then caterwauled when citizens with legitimate concerns voiced those concerns this past month. That is not what healthy debate in a democratic society looks like - some might say that it was downright un-American. Some guy posting a cartoon advancing his argument on YouTube, and some physician sitting in his den responding, and thousands of interested observers adding their critiques - that's what it's about. So it's your turn - offer your critique, and let's arrive at a better answer than single-payer, government-run, post office-quality health care.
