Tuesday, August 11, 2009

Daily rations...

One of the biggest areas of debate in the health insurance reform is the idea of "rationing".  It could be perhaps the most overused and misunderstood term in the debate.  For example, Megan McCardle points out the now-predictable threat of "granny and a pacemaker".

But there is also a real difference between having something rationed by a process and having it rationed by a person.  That is, in fact, why progressives are so fond of rules.  They don't want to tell grandma to take morphine instead of getting a pacemaker.  It's much nicer if you create a mathematical formula that makes some doctor tell grandma to take morphine instead of getting a pacemaker.  Then the doctor can disclaim responsibility too, because after all, no one really has any agency here--we're all just in the grips of an impersonal force.

But this won't do.  If you design a formula to deny granny a pacemaker, knowing that this is the intent of the formula, then you've killed granny just as surely as if you'd ordered the doctor to do it directly. That's the intuition behind the conservative resistance to switching from price rationing to fiat rationing.  Using the government's coercive power to decide the price of something, or who ought to get it, is qualitatively different from the same outcome arising out of voluntary actions in the marketplace.  Even if you don't share the value judgement, it's not irrational, except in the sense that all human decisions have an element of intuition and emotion baked into them. [More]

This is not my understanding of most of the proposals being considered - even the Republican ones - which back comparative effectiveness research (CER).  Many critics hold CER as the thin end of the wedge leading to rationing.  However, rationing as Megan describes only occurs if you prevent people from buying more coverage on the private market.  Several other commentators point out this logical flaw.
Guaranteed minimum healthcare doesn’t forbid anyone to seek more on the private market – paying out of pocket, extra insurance. No more so than a guaranteed minimum income would forbid you to get a job to earn more than the minimum. So guaranteed minimal healthcare doesn’t ensure its minimum by positively forbidding anyone to get more. So it isn’t really rationing. (Is any of this getting through?) To put it another way: rationing is a response to scarcity. But the scarce item in the healthcare case isn’t healthcare, it’s money. (If you want to accuse the goverment of rationing taxpayer money, that would be closer to the truth, but still a weird way to talk, I say.) There just isn’t going to be any attempt by the government to ration healthcare, as opposed to its own spending of taxpayer money. Because: why would there be? [More]
The rationing debate is one of the ways this debate is being waged in our fears.  Given the uncertainty of the times, it could be an effective strategy for those who have oppose any changes. But if the campaign to stop reform actually stops it rather than helps shape it, what will they have won? David Frum points out some flaws in that strategy.

The problem is that if we do that… we’ll still have the present healthcare system. Meaning that we’ll have (1) flat-lining wages, (2) exploding Medicaid and Medicare costs and thus immense pressure for future tax increases, (3) small businesses and self-employed individuals priced out of the insurance market, and (4) a lot of uninsured or underinsured people imposing costs on hospitals and local governments.
We’ll have entrenched and perpetuated some of the most irrational features of a hugely costly and under-performing system, at the expense of entrepreneurs and risk-takers, exactly the people the Republican party exists to champion.
Not a good outcome.
Even worse will be the way this fight is won: basically by convincing older Americans already covered by a government health program, Medicare, that Obama’s reform plans will reduce their coverage. In other words, we’ll have sent a powerful message to the entire political system to avoid at all hazards any tinkering with Medicare except to make it more generous for the already covered.
If we win, we’ll trumpet the success as a great triumph for liberty and individualism. Really though it will be a triumph for inertia. To the extent that anybody in the conservative world still aspires to any kind of future reform and improvement of America’s ossified government, that should be a very ashy victory indeed. [More]
The health reform proposals a typically ugly pieces of legislative work.  Not unlike the farm bill - heard any of the angry comments about ACRE recently?  But those issues won't be ironed out with loaded language and misinformation.

There is at least one reason to push the process too. Farmers know dang well you only have a tiny window of non-campaign mode before business in Washington devolves back to tracking polls against your primary opponent(s).  It controlled the flow of the Farm Bill, and does so with most major legislation.

Right now the feeling is reform may run out of steam. I don't know, because too many on all sides of the issue want to see at least some things changed in the way we provide health insurance.  And the more times we see seniors ranting about keeping "government hands off my Medicare!", the more times it sinks in who is getting the best of our current system.

9 comments:

Anonymous said...

why are americans so opposed too universal health care as we have in Canada....it has its odd bump like any program but really is a good program that is as important as food or housing...regards-kevin

Anonymous said...

Guaranteed minimum healthcare doesn’t forbid anyone to seek more on the private market – paying out of pocket, extra insurance.

Why would there be a private market to choose from if the government is going to pay for everything? How many private insurance companies are there in Canada? Honest question.

Brandon

John Phipps said...

Brandon:

In my connection with a Canadian company, I know we pay for supplemental private insurance for our employees. So the companies exist.

A good overview of Canada's system here :http://en.wikipedia.org/wiki/Health_care_in_Canada

Anonymous said...

Canadian & provincial gov'ts cover all basic services ,,i.e.hospital,doctor,heart,cancer,broken bones,appendectomy,colonoscopy,ect. treatments...private insurance COVERS THINGS LIKE SEMI-PRIVATE rooms in hospital ,,dental,non-hospital prescriptions,cosmetic surgery, vaccines for traveling,,out of country coverage,ect..most of this has been bargained for by unions as extra benefits for there members...many private ins. companies,green shield,met life,ect....not sure what the bottom line is on your question Brandon but will try too give honest answers if I can

Anonymous said...

Everybody is talking like we will always be able to pick and choose our health insurance provider, including for major medical, even after the Government is providing a cheap or free plan. My point is how could an insurance company provide a basic health plan if the government is providing it free? My current 100% coverage high deductible Blue Cross hospitalization plan would be obsolete the instant the government provides a super cheap/free plan.

Disregarding what is coming out of certain politicians mouths at this time, they want a single payer system, and logically at that point there will be NO choice when it comes to your health care. That is what frustrates me so much in this debate, there will be NO choice in the future.

Brandon

Anonymous said...

Brandon:

I think you underestimate the number of relatively wealthy people in the U.S. Unless the government plan is fantastic (which, lets face it, it probably won't be), there will definitely be a market for different/better care. Private companies will fill that void for those with enough money/desire to be selective, just like they will fill the void for anything specialized or elective.

Anonymous said...

Just a basic health plan would put a lot of families and elderly peoples minds at rest,,,going to doc or hospital should not be a reason too lose your home or farm....probably as I am now in that seniors brackett (55+) i THINK ABOUT IT MORE--ON A LIGHTER NOTE--did corn survey last night and oldest group by age is 55+ so will never change survey age group brackets again-kevin

Anonymous said...

I think one of the more important points here is that we need reform to stop insurance companies from dropping people for pre-existing conditions etc. We will lose that if we let the loudmouths derail the entire train. I have decent insurance, but am sure that my insurance company would drop me like a hot rock if I ever get skin cancer. Perhaps what we really need is for private companies to handle the small claims where they do a good job of controlling costs and let the government pick up the big ticket items.

Anonymous said...

Let me tell you my experience of Canadian health care. I have a top of the line hip replacement (recommended by mt surgeon because I was 58 at the time and had done my best to stay active and maintain range of motion). My research showed me a mass of confusing claims on the benefits of various models of hip replacements, but you can't test drive these thing, so how does a lay person choose one? I did wait 6 months from my appointment with the surgeon till surgery, but two years later I ride a horse and do anything I want –the surgeon did caution me against show-jumping and parachuting and discouraged running as exercise, but I participate in any other activities I wish.
The following year I had another major, unrelated surgery, again well-done and leading to btter than ever lifestyle.
I'm self-employed and not wealthy by any means. Costs directly to me for these procedures and hospital visits 0. Quality of treatment: excellent. Wait: not great, but my situations were not life-threatening.
Value of public health care to me: priceless.