Wednesday, October 26, 2016

Is There a Doctor in the House?

You no doubt noted the news flash that hit yesterday, announcing that premiums for popular insurance plans bought through ACA (Affordable Care Act, aka "Obamacare") exchanges would go up by 25% for 2017.

Your reaction to this news likely depends on your political persuasions and economic circumstances: if you are a Republican or a Libertarian, it's positive proof that the ACA is a total failure and a swindle perpetrated on the helpless American public by a grasping and all-invasive government. If you are a Democrat, it's positive proof that the ACA is being deliberately undermined by the GOP, the AMA, Big Pharma, and the insurance industry. If you have a job that offers good health insurance through your employer, you probably don't care all that much. And if you are a low- to middle-income American who is unemployed and needs affordable health care, it's terrible news. No matter. This pooch has been screwed for a long time.

It's no secret that America has the finest health care in the world, and probably the worst system in the world for delivering it to those who need it. Over the years, for better or worse, we have developed a system under which the availability of health care is contingent upon insurance provided as a benefit (in lieu of wages) by one's employer. In general, the larger one's employer, the more varied and affordable are the insurance options available. Those who are self-employed or unemployed must fend for themselves, or rely upon health care at hospital emergency rooms or free clinics.

I would be the first to admit that the ACA is far from a perfect solution to the problem of availability and affordability of health care in this country. It is, however, an attempt to address that problem. Republicans insist that the ACA must be repealed and replaced; however, they have yet to address the "replace" part of that thunderous denunciation, and it's hard to take them seriously until they do.

To the extent that the GOP has any actual ideas on making health care available and affordable, they seem to center on two things:

1. Let the free market set the prices and self-manage the system; or,

2. Let people pay for health care with tax credits.

Now, you can take everything I know about economics, put it in your navel, and have room left over for a herd of elephants and a brass band, but it seems obvious to me that The Market hasn't done a particularly good job of making health care affordable up to now. Many reasons have been put forward for this. One theory - beloved of conservatives and libertarians - is that the economy has been distorted by government interference, and if only all governmental restrictions were removed, The Market would eventually solve its own problem.

I believe this is so much caca de toro, for a few reasons. First, a mainstay of free-market pricing is that prices will adjust to "what the market will bear," meaning that if prices are too high, people will not buy the products and the sellers will either go out of business or find a point that delivers maximum profits at a price customers are willing to pay*. I contend that when you have a product or service - like medical care - that people must have, The Market is rigged** in favor of the provider of the product or service because that provider knows the customer absolutely has to have it and will figure out a way to pay whatever price is demanded, not having the option to do without***.

Tax Credits, along with Tax Cuts, are the standard conservative solution to every problem, but as I've often written here, tax credits granted for one purpose take away funds needed for operation of the government. In any case, people don't need Tax Credits that help them when they file at the end of the year ... the insurance premiums are due now, the doctor wants to be paid now, the pharmacist wants paid for your prescriptions now, etc. They're not interested in waiting until the end of the year when Uncle Sam grudgingly gives you that credit.

Some observers advocate a so-called "single-payer" solution as a way to help bring down costs and simplify the provision of health care. This is the approach used in much of the rest of the world, where a government agency is responsible for paying the bills, and individuals pay their insurance premiums by means of a tax. Such an approach is anathema to conservatives and free-market supporters in this country because (a) the government screws up everything it touches; (b) it removes the freedom of the individual to decide how to obtain and manage his health care; and (c) it allows government bureaucrats to make decisions on health care that a person's doctor should be making††. As for the government screwing up everything it touches, I view that more as a problem of poor leadership, management, and accountability than of any inherent problem with government ... no different from any commercial enterprise. As for the denial of freedom of choice, I can't argue with that ... but it seems to me that the freedom of choice we have now in the health care arena is as much a curse as a blessing. And as for (c), it appears little different from the system we have now, in which insurance company bureaucrats rather than government bureaucrats make decisions on health care that a person's doctor should be making.

I don't pretend to have the answers to this problem, but I do like to try to keep an open mind and not reject possible solutions out of hand. Health care is one of the most difficult and intractable problems facing the country today, largely because it is profit-driven and there are so many different stakeholders with often-conflicting interests. The only stakeholders whose interests are not being addressed are you and I - the people who need health care that ought to be available and affordable in the greatest country on earth†††, political philosophies be damned.

Have a good day. More thoughts tomorrow.


* As an example, how many times per year do the various businesses and services with which you deal announce that they are raising their prices because their costs have gone up? Quite a few, I imagine. And chances are you grumble and keep on paying the new rate. Now imagine the reverse: you write to those same businesses and announce that you are reducing your payments because your cost of living has gone up and your wages have remained stagnant or declined. Can you spell "service cutoff" or "lawsuit?"

** Sorry.

*** Consider the scandalous price increases levied by the manufacturers of Epi-Pens and Daraprim in the past year ... the manufacturers don't appear to be too worried about the patients who need the drugs. 

† Conservatives and Libertarians will tell you that tax cuts should be compensated for by reduced spending ... but nobody ever seems to be willing to take on the wide range of special interests who oppose almost any spending reduction you could name.

†† Remember the stupid canard about "death panels" deciding when to pull the plug on grandma?

††† It's already great, Mr Trump. 


John Hill said...

It seems that the ACA increases are affecting a small percentage of participants and getting a large amount of press. I suppose that's not a bad thing as the voice of the few needs to be heard.
Addressing the problems with the ACA has been the issue as the GOP wants it to fail and do away with it rather than make it work.

eViL pOp TaRt said...

The fact hat at the heart of health care is that it is a profit-based system. Government is to a certain degree also intake-driven. ACA had some flaws, but should be fine tuned rather than junked.

Caca de toro: great description. You get both ears and the tail for that!

Elvis Wearing a Bra on His Head said...

Dealing with insurance companies is as problematic as dealing with government bureaucrats.

Mariette said...

Relying on tax credits makes the doctor S.O.L. for as long as a year after the services were rendered.

Mike said...

My son has the ACA because it's better and cheaper than the health plan offered by his company.