Healthcare Debate

This is a post from another blog I have, DiscussNotArgue, and though it doesn't fit into the chronology I think it does fit with the spirit of One Dimension of looking at the facts and arguments of both sides to come to a non-partisan solution in the middle. As the big debate right now is Healthcare in the United States, it is the subject that's really caught my attention. So as I've been sifting through information during my free time, this is what I've come up with:

Healthcare, Curing the Disease not the Symptoms; Pt. 1: Crunching the Numbers
It seems as if these days politics has become a competition in fear. Rather than who can come up with the best and most comprehensive solutions, it is about which side can scare the public enough into believing that they need to somehow be protected from the other side. This strategy is very effective as a distraction from the causes of what it is we are meant to fear as well as what the proposed solutions are. Obama points to this problem very directly in his recent town hall meeting in Colorado, "whenever America has set about solving our toughest problems, there have always been those who've sought to preserve the status quo by scaring the American people." In the recent past, it was the right claiming that Democrats couldn't keep America safe, another example is when during the 2008 election it was that we needed a change it was the policies of the Bush administration that was the cause of the entire financial collapse. And so the trend continues during the current healthcare reform debate. From one side we hear about death panels and Obama's secret Marxist ambitions. Alternatively, the flip side of the debate presents fear through a sense of urgency. This can be seen in Obama's own words: "because for all the scare tactics out there, what's truly scary is if we don't do anything." The idea of this is that we have a big problem on our hands so something needs to be done as quickly as possible, the underlying implication being that it doesn't really matter what that may be. What both of these arguments do is to shift the debate away from what are the causes of our problems and as a result we get a treatment for the symptoms, or no treatment at all, rather than a cure for the actual disease.

There is no denying, by anyone in the debate really, what the problems are that the United States healthcare system faces. The numbers are pretty clear: Americans pay more, fewer are covered, and the results are worse than in any other developed nation in the world. But what is the cause of such a bad performance in the country that is supposed to be leading the rest of the world? A good place to start, I believe, is to first look at where the numbers come from and then figure out why they are the way the are particularly in comparison to other countries.
One of the more shocking numbers is the number of uninsured in the United States, somewhere between 40 and 50 million people, nearly as big as the populations of Canada and Australia combined. However, according to the Census Bureau, in 2007, 18 million of the uninsured lived in households with annual incomes of $50,000 or more and an additional 14 million uninsured adults qualified for government health care programs in 2004. This means that somewhere around 70% of the uninsured population in the U.S. could be covered but have chosen not to. So the largest contributor to the problem of the massive amount uninsured is not necessarily affordability or lack of government presence. One contributing factor to these statistics are those people that are young and healthy and so choose not to pay for health insurance as they don't believe they need it. In fact, in 2007 there were 18 million people between the ages of 18 and 35 without health insurance (unfortunately I couldn't find information on what income bracket this group fits into, but for the sake of an educated case let's say 70%, taken from above, could be covered, which comes out to 12.6 million). It's often mentioned in the health care debate that if everyone or at least more people were included in the U.S. health care system, it would bring down costs, and though this may not be true of those with pre-existing conditions, at least for this group of presumably healthy 18-35 year olds it is, especially because if one of these individuals is suddenly met with an emergency, the burden really falls on those who have been contributing, an unfortunate situation that could be avoided if they had already been contributing to the insurance pool.

So looking at these numbers, it seems as if there are three issues that need resolving. The first is to deal with that 30% of people who can't afford nor qualify for coverage. This can be dealt with through a combination of bringing down costs, expanding Medicaid coverage, and tax cuts/rebates to make it more affordable. Second would be to bring in the people that either can afford their own or qualify for government coverage. And third, a large number of these uninsured have probably been denied coverage as a result of preexisting conditions, even though they may be able to afford a standard insurance plan. One possible solution for both of these problems is to take a page from the Australian system. In Australia, they use a combination of community rating, which helps to get rid of discrimination against the sick and elderly, and tax incentives for those who have insurance when they're young and healthy. Australia's system increases the surcharge on Medicaid by 1.5 percent each year if you make more than $50,000 per year and don't have private insurance. John Hempton in his blog Bronte Capital offers a detailed description of the Australian system as well as how it applies to the situation in the U.S. Hempton explains that this strategy brings in those who otherwise wouldn't get insurance (or collects revenue from those who don't) as well as saves on the legal and administration costs of denying coverage which, he says, account for 10 percent of costs in America.

There is another statistic that deserves some attention, one that Obama has put a lot of focus on, that 14,000 Americans lose their insurance each day. I think this figure can be a little misleading though and falls in line with the fear strategy. It's important to note that the census actually recorded that the total number of uninsured declined by nearly 1.5 million in 2007 from the previous year and the proportion of people without any health insurance actually fell by a full percentage point from a decade earlier, from 16.3 percent in 1998 to 15.3 in 2007. In addition, the Congressional Budget Office estimated that in 2002 the people who had been uninsured for a year or more was between 21 and 31 million. This means that 10 to 30 million were only temporarily without insurance. So how to account for the 14,000 Americans who lose their insurance each day? The figure itself is misleading because more Americans as opposed to less are being covered each year. It seems safe to assume that many of these people are losing their coverage as a result of either losing their jobs, changing jobs, or moving to a different state. A couple options to solve these problems would be to provide similar and equal tax incentives for individual coverage as there is for employee coverage. In fact, one of the arguments President Obama has used in favor of the public option portion of the health care reform is that it creates a portable alternative that you could keep no matter where you lived or where you worked. If this is one of the President's goals, one which he seems to think is part of the solution to our healthcare woes, why not encourage rather than penalize people for getting their own insurance, which they could take from job to job and state to state?

I think that when you take a look at the numbers the problem of health insurance coverage in the United States is more than just a problem of insurance companies being bullies and not offering competitive prices or Americans simply not having access to affordable care. Why not try and address these individual problems, such as bringing in those that simply choose not to get insurance or those that lose coverage while inbetween jobs, rather than considering the whole system a failure. That's what we would do if we had a universal health care system; it wouldn't be scrapped if it proved to be ineffective. What I want to write about next is another issue that people seem ready to dump the blame onto the failure of the free market: higher costs for seemingly lower quality care. To examine that, you have to look at why the American system seems to get worse results and how that is reflected in costs.

National Center for Policy Analysis: Crisis of the Uninsured: 2008
Bronte Capital: Health Care Reform and single payer- an Australian perspective
Census: U.S. Census Bureau
Obama's Grand Junction Townhall transcript