A year and a half ago I wrote two posts (part 1, part 2) that discussed then Massachusetts Governor Mitt Romney’s statewide universal health coverage plan. In the first part I derided Romney’s proposal as being akin to Hillary-care. In the second part, I discussed a rebuttal that claimed that Romney’s plan worked within the realities of Massachusetts politics to bring about a health care clearing house that would simply offer residents a broad variety of health care products without regulating the products themselves.
Supporters claim that this is very similar to car insurance. We require all vehicles operated on public roads to be insured. In Massachusetts, they are simply requiring all human bodies operated in the state to be covered by medical insurance. Now that Romney’s health insurance plan has actually been in place for a while, we can take a look to see how like car insurance it really is. And from my analysis, it isn’t like car insurance.
Why do we require all vehicles operated on public roads to be insured? We don’t require you to buy auto insurance to protect your car; we require you to buy auto insurance to protect the property of others who might be impacted by your use of your car. If you fully own your vehicle, we do not require you to buy collision coverage. That’s optional. If you have a loan on your vehicle, your agreement with the lender requires you to buy collision coverage. But that’s to protect the lender’s interests, not yours.
By law we require that you buy only liability coverage to cover others’ potential property loss should you be negligent in causing such. We also require a certain level of injury coverage. You can buy more than the minimum coverage and you can buy a variety of other options as well. And you can buy your policy from any licensed insurer. If you have a claim, that’s between you and your insurer.
But automobile insurance does not pay for your oil changes, registration fees, new tires, or maintenance repairs. However, Massachusetts’ health care insurance does require coverage for the human equivalents of these things.
The underlying premise behind a requirement that each person have medical insurance is that your physical condition is public business. Why is your physical condition government’s concern? Only due to socialism. Since the public pays for a portion of your health care, your health issues impact the public’s pocketbook, so the public can tell you what you must do to minimize their costs.
Do you see the basic problem here? Car insurance does not assume that the government holds any ownership in your car; only that government has an interest in protecting public and private property. Government mandated health care, on the other hand, assumes a certain level of public ownership of your physical body. Or else why would government have any purpose in mandating health care coverage?
You can say that it is because government cares that everyone has access to needed care — that the unfortunate are cared for. OK. Is there a way that can be accomplished without forcing all citizens to participate in a centrally planned system? Perhaps through a voucher system for the underprivileged? And what about people that don’t want the care? A recent study found that 62% of America’s uninsured can afford health insurance but have opted not to buy it. Most of these folks are young adults. In Massachusetts, these people are coerced by law into paying for a product they feel they do not currently need. And they can’t even buy a minimal package. You can’t buy a policy with a high deductible. You can’t buy a policy that doesn’t cover prescriptions.
Whenever we employ government to accomplish something, we are in essence employing coercive power over our neighbors. Sometimes that makes sense. But we ought to be extremely careful about what we choose to force our neighbors to do or not to do.
Romney’s health care plan is a big government program. As Michael Tanner argues in this article, the GOP must decide in the upcoming primary which philosophy will guide the party for the next few years. Is it going to be small government or big government? The big government crowd had their turn at the helm. It cost the party big time in the recent elections. When Republicans came to look like Democrats, middle of the road voters had little reason to let them remain in control. Tanner notes that “on election night 2006, 55 percent of voters said that they thought the Republican Party was the party of big government.”
So, what is the small government approach to health care? A significant move would be to change tax law to decouple health insurance from employment. Although Romney’s plan did that, it created other significant problems that should have been avoided. Another step is to deregulate the overregulated health insurance industry. Despite claims that it would not do so, Romney’s plan increased government regulation of the industry.
Michael Cannon says in this article that good public health policy must include a focus on “creating a vibrant, competitive medical marketplace that puts constant downward pressure on prices while striving to improve quality.” He says, “Such a marketplace would be a better guarantor of quality, affordable health care (and coverage) than anything likely to emerge from focusing solely on expanding coverage.” Cannon says that two assumptions that thwart good health policy are that everyone must have coverage and that government must grow for markets to work.
As we struggle to discover how to deal with increasing health care costs, perhaps we should properly assess the underlying problems. How can we expect to develop a proper solution if we don’t understand why the problems exist? The authors of Healthy, Wealthy & Wise say that the real problem is “not that market forces cannot work in health care. Rather, public policies have prevented health-care markets from functioning properly.” So the solution is to get government out of health care and health care insurance. Romney’s plan did the opposite.
Since Massachusetts’ universal coverage plan went into effect, Romney has quietly distanced himself from it. He found that it didn’t play well on the campaign trail. But unlike his stance on the abortion issue, Romney hasn’t announced a complete abandonment of big government ideology. When Romney is asked about Massachusetts’ universal health coverage plan, he responds that it was the best that could be accomplished given the state’s heavily Democratic political landscape. And while he isn’t very forthcoming about what he plans to do about health care as president quite yet, the things he has said don’t sound at all like a small government approach. With the daily clamor for the government to do something about health care, Romney seems to be holding his big government ideas back for after the primary election.
Look at President Bush, and then ask yourself whether we need another big government ‘compassionate conservative’ in the White House.
You seem to be approaching this as though health care was on a par with car maintenance. I doubt you believe that. We have to begin this discussion by saying that every human life is worthwhile and every human has a right to affordable, available and high quality health care. The question is how can that care be provided.
Rather than say that your physical condition is public business, I think it is more appropriate to say that the society benefits when all its members have access to affordable health care. As a nation we would have less disease, a more productive work force, and more competitive businesses if we accepted our collective responsibility for the health care of our citizens.
The market is simply never going to accomplish this moral goal - it is not profitable, and there is no practical way to make it profitable. So rather than spend several times more than other nations on health care, we can save money and provide better care by simply making the government with single payer for all health care costs.
That does not have any effect whatever on your choice of physician or hospital (in fact, it will probably increase your choices over the current managed care chaos). Instead of having some corporation second-guess your physician in order to save money, or withhold payment in the hope you will not be persistent, we can have a rational system to monitor abuses.
This is not a "big government" versus personal liberty issue, it is a moral and ethical issue. Do we place the well-being of our fellow citizens above political ideology or not? Simple as that.
Please explain to me where in the Constitution it is implied that everyone has a right to "affordable, available and high quality health care." While that is certainly a moral good to which to aspire, I do not believe that our Constitution imbues government with the power to implement rules enforcing such.
I completely disagree that a single payer system is the best way to achieve the goal of making sure everyone can get the health care they need. I think it is quite obvious that every system that has worked this angle is worse than our current semi-private system.
I also disagree that the free markets cannot supply appropriate and adequate health care. We simply haven't tried using an unencumbered market in the history of modern medicine. Given the opportunity, most people would be capable of handling their own health care and could choose funding options that will be in their personal best interests.
The question, it seems to me, is how to help those that want access to health care but have little capacity to obtain it. Rather than saddle everyone with a clunky system (mind you, I lived in Europe and saw the nasty underbelly of universal coverage), why not focus on those that need outside help to get what they need?
There is no such thing as a "medical marketplace". I'm diabetic. My doctor prescribes two types of insulin that I need to take every day. I have good insurance, but my co-pay is still $50 on each prescription every time I get it refilled.
In the sort of "marketplace" that every Conservative gets aroused about, I would be able to choose from any number of suitable products at various price levels. That doesn't happen. I can't go to some Diabetic Supermarket and pick vials of insulin off a shelf like I'm buying bottles of shampoo.
Free markets require a number of conditions in order to function. In the health care market, two of these conditions break down.
First, suppliers are not able to enter the market easily to meet changes in demand. Becoming a brain surgeon is not an easy process. There are a limited number of specialized doctors, facilities, and manufacturers (partly due to patent law). Producers are given a monopoly on the production of drugs they develop, and you're not going to want a cheap eye surgeon cutting into your cornea if he isn't fully qualified.
Second, demand for health care is not based on price. In a normal economic good, demand increases as price decreases. If the price of apples drops, more people will buy apples instead of oranges in a supermarket. Health care decisions are not based on the price level. If you need a new heart valve, you're not going to get a hip replacement because it's cheaper. You're going to get the treatment you need, and do whatever you have to do to pay for it, regardless of the price.
The quantity of health care demanded by consumers is not dependent on the price of health care. A free market won't function under that condition.
I have never heard a Conservative make a convincing argument about how the health care system could be made to function as a free market. Instead, every Conservative who ever writes about health care invariably invokes scarewords like "Socialism", "Hillary", and "big government". Did you skip the line in your script about the "trial lawyers"???
I would love to see you try to explain how health care could function as a free market without leaving tens of millions of people priced out. Please, it has been a few years, but I have a degree in Economics. Feel free to use graphs and big words.
The constitution doesn't say we have a right to a highway system but it doesn't mean that it doesn't make sense to create it.
Here is the problem with your entire premise when it comes to the uninsured. Medical costs are the number one cause of bankruptcy, when a person receives medical care and then defaults on paying those costs then what do you think happens? Does the hospital just eat the cost? No way! They pass that cost onto the rest of us in higher costs.
We are paying for the uninsured one way or another and somehow Republicans can't get that through their heads.
Except here is the big catch, if the uninsured would of had basic health coverage to begin with then the wouldn't wait to get treatment and the medical issue would have been caught much sooner resulting in lower cost for treatment.
This is what happens, the uninsured wait until the medical issue becomes so serious that they end up going to the emergency room where treatment is required by law (probably some of the regulation you complain about, just let the body pile up at the door, I am sure that is what Jesus would have done), the treatment costs so much more and also there is more of a chance that the hospital will never recover the full cost. But those costs don't just disappear, they are passed onto the rest of us.
Bottom line is that we are paying for these people whether you like it or not, we should do something to get them into the fold and a single payer would do that.
Wow - beautiful response...
I have a business degree but evidently my soul-ectomy wasn't successful so I too have difficulty putting aside all I have learned about economics to justify screwing people for a couple dollars. WWJD
Excellent insights. I forgot that government-forced health care is one more reason I will not vote for Romney.
I wrote a similar post on Simple Utah Mormon Politics about auto vs. car insurance.
You write: "A significant move would be to change tax law to decouple health insurance from employment." I agree, as long as added to my salary would be the amount that my employer currently pays my health insurer in addition to my premium.
As I read through the several comments, my dismay mounted concomitantly with my desire to respond to notions which I greatly desire to disabuse. Rather than submit a ginormous comment here, I posted my opinion and perspective on my site.
I think you will agree that the Constitution is not our only source of morality and ethics. The Constitution certainly does not prohibit the government from providing for the general welfare.
Most of us currently suffer under the "managed care" restrictions of the insurance companies, and we are limited to "in-network" doctors and hospitals, drugs that are "on formulary", and "gatekeeper" doctors that shield us from the specialists. The goal of all that is not to improve our care, but to insure the maximum profit for the insurance company. All we need to change here is the payer.
By making a the government the single payer, we save the billions wasted on claims paperwork, marketing, executive compensation, and profits. We allow people to choose their own doctors and hospitals without restriction and we pay for the drugs the doctors prescribe and pay less for them.
The health of my neighbor is more important to me than slavish devotion to any political ideology. Apparently you don't see it that way.
I am amazed at those that are willing to scrap the Constitution in hope of achieving a moral good that simply cannot be supplied by any government on the face of this earth. Read Frank's post and the related comments. Also, check out GMU Economics proffesor Don Boudreaux's post on this issue and related comments. If you read all of the comments (a robust discussion), you'll have to spend some time because there are 186 comments as of this time.
That's ridiculous. It is quite easy to prove that many other nations provide better health care than the United States for considerably less money.
While no system is perfect, when you have a system whose purse strings are held by the people through their elected representatives, you have accountability and the ability to correct those errors, something missing from the U.S. system.
Instead of listening only to commentators who are out to discredit publicly funded health care, you should pay attention to the statistics on health care outcomes - from objective sources.
Of course it can be proved, but only by a measure that measures the wrong things. I have doctor friend in Montana that used to be a doctor in Canada. He frets that our American system is trying hard to duplicate the worst parts of the Canadian system. But as of today, our system beats the Canadian system hands down. As the head of Canada's medical association recently put it, Canada "is a country in which dogs can get a hip replacement in under a week and in which humans can wait two to three years."
And Canada is one of the best socialized systems out there. Although we have bus tours for seniors to go to Canada to get less expensive prescriptions, my friend notes that very few Americans run over the border to get actual health care services, while the opposite is not true. Many Canadians run over the border to get health care services performed in the U.S.
And statistics bear this out. Canada is not alone in countries with socialized medicine that are working to introduce market based reforms, as noted by Canadian-American Dr. David Gratzer in this article.
I happen to be in Canada this week and the Toronto Globe and Mail had a good article on this subject yesterday by the CEO of their University Health Network. Here are some stats:
% of GDP on health care: US 14; CA 9
% covered: US 85%; CA 100%
% with a primary doctor: US 78; CA 97
% with same doctor for 5 or more years: US 50%; CA 78%
US automakers can make cars $1500 per unit cheaper in Ontario than in Michigan because of the cost-effective health insurance. Canada spends only about 55% of what the US spends and has longer life expectancy and lower infant mortality rates.
Sure there are problems with the system here - mostly due to cost cutting by conservative politicians that puts a strain on the system. As a letter writer put in in today's paper though, "Canadians should not be satisfied with a mediocre health system just because the US system is worse."
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