Tuesday, August 18, 2009

A more perfect universal option

As Obama starts to deliver on what he has been promising ever since the primaries, there is a lot of talk between both wings of the electorate as to how the nation should proceed.

The left wing is deafening in its bid for a public option in healthcare. They are divided into many groups, some of whom believe that a single-payer system is the answer to everything, while others believe that a hybrid of insurance companies with the government is the way to go.

A single payer system basically means that the government will pay for everything. A patient will walk into a doctor's office, hand him an insurance card, and would have to pay for nothing that ensues. The government picks up the tab. Sounds good huh? Especially if you've recently been a victim of the insurance monsters who screwed you with words like co-pay, tier-4, pre-existing condition etc. Let's however look at it from another point of view. Who is the government? We are. The people have to pay for all this through taxes. There is a good chance that taxes would go up, and that each member of the population will contribute towards the healthcare of every other member. This means you will have to contribute towards the well-being of every chain-smoker, every lardass who gorges on donuts, and cheeseburgers (with bacon) and does not do anything that remotely resembles exercise till his arteries are so clogged that they resemble Milan subway after a heavy rainfall in Mumbai.

A hybrid system (like France has) is one where the government still holds the lion's share, but there is room for private for-profit organizations in the system. Typically, one has to pay health insurance as a citizen of France, so the system is primarily run by taxation. Around 85% of your healthcare expenses are reimbursed to you, (upto 100% in severe cases). The remaining money can also be recovered using additional insurance. By taxing the higher economic strata at a higher rate (a reasonable system), the average French person contributes roughly1% of his earned income to his own healthcare.

Conservatives like to demonize public option health care as 'socialized medicine'. I will cop to that. But come on...you guys send your kids to public schools (completely run by govt.), use your local library service, visit places like central park in Manhattan, and don't seem to complain about the evils of big government then. Nobody seemed to mind when the govt. swooped in and bailed out large banks, which failed due to unbridled capitalism.

F. Scott Fitzgerald has a wonderful quote, "The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function." That is what is expected of the intelligent electorate today. So, let us look at the right-wing and see what irks them about single-payer options.

Capitalism is what sustains America as a nation where anyone can make it big, if he has a good idea and can find the right backers. The Republican party has always favored legislation that supports entrepreneurs and I tend to agree, for it is they who create jobs, and boost the economy. People with jobs ergo people with money, ergo people who can consume the products of other entrepreneurs who will create more jobs, and ideally this cycle should lead to a prosperous free-market economy.

Countries like Canada, the UK, France etc which have universal health care show remarkable delays when it comes to getting appointments for surgeries. I see no way of arguing my way out of this statement. The govt. does function slower than private organizations. What can we do?

Selfishness and greed fuel innovation, and competition helps create excellence. Few people doubt the wisdom in the gist of my previous sentence. What follows logically is that private companies who have their profits as their continuous incentive would innovate more, and their competition would help us get the best products at the lowest price. Shouldn't this logic work for healthcare as well? Why should there be a halo around healthcare as though it is something divine? (and my readers know too well my opinion of anything regarded as divine!) Let us run healthcare as business, and the same rules can apply. Conservatives also argue that socialized healthcare in other developed countries is well enough, but even they require the tireless innovation of the free-market USA.

Here is a statistic that should shock their conscience. The US govt (specifically the National Institute of Health) funds 28% of the total biomedical research that happens here. This figure is greater than that of the contribution of any one pharmaceutical company. How can we be sure that a higher percentage of govt. funding will be deleterious? I am a biomedical researcher myself, and know that everyone around me covets the elusive NIH grant, which is tough to get, but even tougher in these times, because the govt. is busy giving indirect bonuses to AIG executives.

As far as innovation is concerned, the right wing does all it can to scuttle that too. Opposition to stem cell research from religious nuts (whose opinion should not even be considered for a lack of a rational foundation) has made sure that countries like South Korea are ahead of the US in stem cell research, something that promises to help treat some very major problems. Incidentally, here is a very interesting and informative article about South Korea's health care system (A National Health Insurance or NHI) and the problems it has.

So you know the spot we are standing on? It's called Square One!

What is the correct option? Well, no one can ever know until the option succeeds or fails. We don't possess Hermione's time turner to reverse a bad decision either.

Another complaint that conservatives have with this system is that no one gets to choose their doctor, or the care that they get, simply because in this country, it is financially expedient (via tax breaks) for an employer to purchase health insurance in bulk for his many employees. Herein lies a part of the problem. There is a chance of collusion between the insurance company and the employer, which means that you might be getting sub-standard care so that your boss gets his meal ticket. The solution to that is simple. Remove this tax break. Let every person purchase his own health insurance, and the competition will take care of itself. Right?

Well, almost. The problem still stays, because there is another lobbying organization called the AMA (American Medical Association) which helps keep the salaries of medical practitioners high. It also keeps the tuition for medical degrees high (in turn). The promise of a higher salary lures more medical aspirants, and the demand for medical seats increases, thus increasing tuition. There is far too much pampering going on at the behest of the AMA. There are new occupations being created like nurse-practitioner, physician-assistant etc etc, which means more money. They all bill your insurance carrier, who then drops you because you are too much of a risk.

An altruistic thought also goes to those 50 million who are not covered at all in the US right now. An appalling figure for an industrialized nation.

I would say that let us all be selfish for once. For the most of us, we fall under the $250000 per annum salary limit that Obama was dealt so harshly for. So, the fact is that the insurance of the at-risk population under a single-payer option would be shouldered by the very rich. Screw them! No listen. One man, one vote is a clear mandate. The bum on the street has as much legal influence on the outcome of the election as Warren Buffet. That itself is a socialized system. Let us all act selfishly. Forget the idea that socialism would destroy the fabric of the US and all that blah...look at it simply. What if the government figured out a way to put the majority of the burder on the people who make more money than you can fathom? How is it your problem? Who cares what label they put on it? Socialism, universal health care, etc etc...how about we all just follow whatever gets the job done?

This is a very long rant from me. As I have said before, I am in the healthcare fraternity, but am not an economics expert. Better opinions are sought. Rebuttals and conflicting ideas are most welcome.

5 comments:

buddy said...

well put, well researched and i loved the personal references at places. A little more refinement and this could be a piece for the NYT. Way to go!

rambuna said...

free- market economy is the right way that will provide better prices of healthcare insurance services as well will maintain desired service levels. rest who cannot afford..social security schemes of govt. will take care.

Rational Vs Irrational said...

Nicely done! But too many more things to it. we do have certain nascent deviation in the market already addressing the various issues - preferred provider organization (higher cost almost equal to double the base price, but freedom to choose) Health maintenance organization like kaiser org(longest yet most dynamic insurance system and practically similar to US or UK health system, so u can see the competition is not working as it shud ideally b. It has more to do with countering laws like HIPPA n COBRA, payer reimbursment policies, pharmaceutical costs, aging population. Comparing US with othr systems is not possible becoz of all above.N i bet universal healthcare system wont cum in US. THere are too many stake holders and lobbyist sitting thr not to let such thngs happen. Btw, tier taxing the higher salary people?? I found a lil astonishing to come from a person who stands for liberal values.

Liberal said...

@rational
Thanks for your contribution. I needed someone who was better informed to comment on this! You should probably write something on your own about this topic. I would love to read it.
As for taxing the higher salary people, you are right. In most cases, I am a libertarian, but as I also said, let everyone be selfish for a little bit. The voting system is socialized. Every person gets one vote regardless of his contribution to the economy. So, if they all voted their interest, the higher salary people would probably get taxed more. I must admit that I am being a little utopian when I feel that healthcare is something that everyone should get. I am pretty confused in this regard.

avalok ishwar said...

.. a nice primer on the healthcare issue - many complexities exist.. this country is far too big, diverse, and complacently main-stream to reach out like they have done in those small modular pieces of land in the european continent that they call countries - like france, belgium, denmark etc. even in those "liberal" countries, they don't want to pay for the poor people coming to their shores from lands like algeria, russia, parts of eastern europe. let's see how far our man, obama can deliver, but i am afraid he might dilute this so much that it will barely resemble what he originally envisioned. hope he doesn't get "SOMETHING" passed just to claim victory.