Health Care/Coverage Conundrum

    The United States has the best health care system on the planet. The proof ? People vote with their feet, and more foreigners come to America for health care than Americans flee to foreign countries for health care. Indeed, foreigners will spend tens of thousands of dollars they don’t have in order to obtain health care from American doctors and hospitals. So what is lost in the current debate is that Americans are concerned not with health care but with health coverage – and that is the first misconception that is being widely propagated.

     The second is that it is possible, finally, after years of trying in manifold ways, to get that free lunch. It is possible for health care to be disseminated to all, with the same quality of care and the same opportunities, without taxes being raised, revenues enhanced or the country being bankrupted. And this state of affairs will be possible the moment after the tooth fairy assumes office. Here we come to the classic conflict between high-sounding ideals and the practicalities of the real world. That everyone should have equal access to health care is eminently desirable, perhaps slightly more than everyone should have equal access to a health club, a high-priced French restaurant and a Lexus. But the chilling effect of the real world informs that no one will have equal access to the latter, so why should they necessarily have to the former ?

     Put another way: if two people have equal access to something, and one pays for it and the other does not, then for how long will anyone keep paying for it ? Or, if the government creates and sustains its own health insurance company (ignore for a moment that its current company – Medicare – is going bankrupt and the only system it currently manages – Veterans Hospitals – are not noted for their high standard of care), then why would anyone purchase such insurance from a private company, whose costs will be greater and which is not shielded from the competitive marketplace ? Of course no sane person would, and in the end, the government would be running health care in America, and the record of government run health care – where it is now in place – is markedly poor, in terms of quality, speed of delivery, responsiveness to the individual patient, and ultimately the need to ration care because of limited resources.

     With the current reform attempt of the health coverage system – and I will spell out my own – it is fair to question the bold assertions of the reformers:

1) They insist that all Americans should have health insurance. Well, why ? The figure bandied about – 47,000,000 uninsured – includes a quarter who are illegal aliens, and 2/3 of the remainder are those who can afford it if they wished to purchase it (but they choose to spend money on something else) or those who are young (under 30) and do not feel they need health insurance (and they are actuarially correct – although in certain individual cases, tragically wrong). But why isn’t an American free to say “I don’t want that,” as long as he is willing to live with the consequences ? And of the remaining 10%, many lose their insurance briefly and then are insured again. And there is Medicaid to cover the truly indigent.

 2) They insist that it be illegal for an insurance company to deny coverage for pre-existing conditions. But why ? An insurance company makes its money by insuring people who then do not need its services. The premium payments of the healthy offset the medical expenses of the unhealthy. If a person only seeks insurance when he is already ill, then the insurance company immediately incurs expenses far greater than any premiums it will accrue – a sure recipe for financial disaster. So why allow anyone to game the system and only seek coverage when ill ? If everyone did that, the system would collapse. And if the government health plan decides to cover pre-existing conditions, then it will collapse – or better, would collapse, if it didn’t have available a limitless supply of government-printed money underwriting it, that would shortly thereafter depress the value of the dollar.

 3) They insist that women not be charged higher premiums than men, and that the elderly not be charged higher premiums than the young. But that too is ridiculous, assuming arguendo that women require more medical care than men (undoubtedly true, because of pregnancy and the like) and that the elderly require more medical treatment than those younger – which is obviously the case. The higher premiums are not punitive, but simply reflect the sober assessment of potential costs associated with insuring those groups. Would they insist as well that smokers not be assessed higher premiums ? Of course not. All of which begs the question: has anyone Congress studied simple economics or ever run a successful business ?

 To say America has the best system is not to say it has the perfect system, and certain adjustments are clearly warranted. It should be obvious to anyone that insurance companies make money by not paying claims, and so my experience has been that they will routinely deny payment for valid claims – hoping the average person becomes flummoxed and does nothing. That is wrong, and since the consumer is at a disadvantage when fighting for the payment of just claims, a claim wrongly and arbitrarily refused should result in the company being fined – with the fine going to the consumer. So too, companies should be subjected to fines for suddenly denying coverage in the middle of an illness, with all ambiguities in the impenetrable health coverage agreement construed against the drafter – the insurance company.

Finally, the system should be simplified, and coverage provided only for major medical or catastrophic needs. There was a time when that was the norm. When my first child was born, we had only major medical coverage – so the doctor was paid $2500 or so out-of-pocket, and the hospital slightly less than that. By the time my last child was born eight years later, insurance was paying almost all of it – and paying much more than I had paid. Undoubtedly – and obviously, given human nature – third-party paying leads to more consumption of the particular entity in mind. I will eat more at a wedding (third-party payment) than I will at a restaurant (self-payment). One will visit a doctor far more – and not mind a battery of tests – when a third party is paying for it than the consumer himself. This should end.

As the great economist and thinker Thomas Sowell has written, automobile insurance covers collision and damage – not gasoline fill-ups and oil changes. Insurance by definition is designed to cover risks, not the routine, so why should health insurance insure anything that is routine, like routine visits and check-ups ?

Costs can certainly be reduced by reforming the tort system, as well, as Charles Krauthammer has written – by limiting medical malpractice to compensatory (not punitive) damages and stripping the negligent doctor of his license to practice medicine – deterrent enough. But the notion that doctors need to pay hundreds of thousands of dollars in medical malpractice insurance premiums, or divest themselves of all assets so they are lawsuit- proof, is obscene, and a sign that reform is needed. But it should be reform that improves the system and does not destroy it, that reduces costs rather than inflates it, and that limits the role of government rather than expands it.

The discontent in the heartland of America over the proposed overhaul reflects the heartland values of personal responsibility and individual initiative that has sustained the world’s engine of prosperity for two centuries. It is a voice that is saying to the politicians – most of them well-meaning, to be sure – a uniquely-American sentiment first articulated in 1775: “Don’t Tread On Me!” We will soon see how – and if – that voice is heeded. Reform will come in some guise – that is the political necessity. Let it be reform that advances a good system rather than strives to create the perfect system that will never exist.

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