Ask
Auntie Pinko
July
24, 2003
Dear
Auntie Pinko,
I was recently watching the movie "Bulworth."
In it, the claim is made that health care is one of the most
profitable industries in the country because the insurance
companies take 24 cents out of every dollar that is spent,
while it takes the government 3 cents out of every dollar
to do the same thing with Medicare. This sounds like a pretty
darn good argument against the Republican mantra that "anything
government can do, corporations can do better." Is the
claim true? And while we're on the subject, can you enlighten
me about socialized medicine?
Daniel
Akron, Ohio
Dear Daniel,
You just had to ask, didn't you? Auntie Pinko was afraid
someone would bring up the health care issue sooner or later.
Fasten your seat belts, readers. It may be a long and bumpy
ride.
Speaking ex cathedra from my little chintz-covered
armchair in my quiet country town, Auntie has only one truly
authoritative and definitive statement to make about the issues
surrounding health care in America:
The simpler someone's explanation sounds, the
more they're leaving out.
You bring up the example of the movie character's statement
about the comparison between insurance companies' costs versus
the government's costs for Medicare. While it sounds good (and
simple - so beware!) there is inevitably more to it than a simple
point-to-point comparison. For one thing, Medicare generally
delivers different services than private insurers provide. Through
governmental regulations such as Health Care Financing Administration
rules, the government can implement cost controls targeted especially
at the kinds of services that Medicare provides. And while these
controls also benefit private insurers in many ways, they don't
address many costs that Medicare doesn't cover.
Now, while one should always take such simple generalizations
with a large block of salt, that doesn't mean that they are
entirely worthless or untrue. During the late 1980s, I participated
in a coalition of non-governmental organizations that studied
the cost for one state to provide Medicaid services, versus
the costs of private insurers providing similar services.
We did find that per dollar spent, the state's share of administrative
costs was much lower than the same costs for private insurers.
But we also found that clients covered by private insurers
had better access to the same services, expressed in a wider
range of choice in providers (even among HMO clients,) shorter
waiting times for appointments and procedures, etc. Medicaid
clients were faced with long searches for a provider who would
accept new Medicaid clients, longer waits, and generally less
agreeable care experiences that they perceived as lower in
quality than private insurance clients.
Health care issues are vastly complex, ranging from broad
policy considerations such as how to ensure an adequate supply
of well-trained health care professionals, to narrowly-focused
but emotionally intense issues of how much control an individual
consumer can exercise over their own care choices. And frequently
a strategy that can solve one problem will end up worsening
another problem.
The central dilemma that many policy analysts have identified
seems to be this conundrum:
Americans want universal access to the highest
possible quality health care services at low cost.
But the three elements in this conundrum (universal access,
highest possible quality, and low cost,) are mutually exclusive.
No business model or social administrative system has ever been
devised to provide all three of these elements in full measure
for any product or service, much less something as complex as
health care.
Americans are going to have to choose how to balance three
equally unattractive strategies to solve this riddle:
1. Limiting access. The idea that everyone can't
have everything they want, from any provider they choose,
immediately upon demand, offends our sense of fairness and
rightness. And from a practical standpoint, we know that any
time we impose any limits at all upon access, some costs escalate,
because some people will forego preventive and early treatment
options - even if they are available. And when we're all in
a cost-sharing pool, that affect everyone.
2. Compromising quality. We'd all like to be seen
by a Mayo-trained or Hopkins-trained specialist in the precise
ailment that troubles us. Is a "Nurse Practitioner" really
as good as a board-certified Internist? Can we trust them?
The real and perceived costs of less than "the best" health
care are enormous. Most of the tragic mistakes and omissions
that end in costly lawsuits can be traced to cost-cutting
that compromised the quality of care. And the more medical
technology advances, the higher our quality standards rise,
and the costlier it is to maintain them.
3. Paying the price. Everyone familiar with the basic
principle behind insurance - the cost-sharing pool - understands
that the more people you have participating, the lower the
costs will be for each individual participant. This is the
system that has broken down in the private market, as a cycle
of rising costs and increasing competition forced many employers
out of sharing health benefit costs, shrinking the cost-sharing
pools ever further and spiraling the costs upward exponentially.
The only way to address it is to expand the cost-sharing pool,
and use the leverage of one (or a small coalition of) payer(s)
to balance cost control and quality assurance. But expanding
the cost-sharing pool means paying for the coverage of millions
of Americans who are uninsured or underinsured now. The initial
investment will be staggering. Are we prepared to pay it?
Which brings us, by a roundabout road, to your final question,
Daniel, about "socialized medicine."
This highly imprecise term is used, usually pejoratively,
to describe systems adopted by countries who elected to expand
their cost-sharing pool by implementing a single-payer system,
in which the payer is the government. It's imprecise because
these systems differ greatly in how they are implemented and
managed. In some countries the provider market remains private-sector,
serving the single-payer government insurance program. In
some countries, the government "owns" the health care provision
system, and employs all the doctors and technicians and clinic
administrators, etc.
Naturally, these systems vary widely in the real and perceived
quality and convenience of the care they deliver. They differ
greatly in the level of access they restrict (although almost
all restrict access to some extent.) Yet when the best of
these systems are examined, many of them manage overall to
provide far better access and quality of care to the overwhelming
majority of their citizens than millions of Americans experience
with our broken-down mess.
So why is "socialized medicine" such a pejorative term?
Well, partly, I'm sure, it reflects the American disdain for
anything that restricts a perceived "freedom." (Never mind
that this "freedom" is illusory for millions of us, and costs
unconscionably in dollars and human tragedy.) But the real
answer is more likely to be that maintaining the existing
system is still in someone's vested interest. And vested interests
are usually willing to spend lavishly (Auntie has to wonder
how much those "Harry and Louise" ads cost) to keep
their benefits.
As the old Romans used to say, "cui bono (who benefits?)"
Or, as an anonymous American of more recent vintage put it:
"Follow the money."
There's no way Auntie Pinko (or anyone, I bet) can adequately
explore and explain all the issues connected to health care
in one short column, Daniel. But thanks for giving me the
chance to sketch in a few broad outlines!
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