Is There Really a Solution to Health Care?
Once again, the conflict between liberty and justice has reared its ugly head. This time it’s in the face of health care. While Republicans boast the positives of a free market system for health care and the freedom of choice, the Democrats espouse the position that health care is a fundamental right. Freedom versus rights, how many times have we heard that broken record? If you put the positive points of the two sides on the scale, it might just show an even balance. But, this isn’t about the weight of gold, it’s about human lives. And this isn’t about a safety net that turns into deep dark hole. It is, as James Carville so eloquently said, “the economy stupid.”
So, how do you provide health care for every individual and… pay for it? Is there an answer? There just might be.
Freedom of Choice
Republicans claim that their concerns are with government dictating policy and that capitalism is the best way to serve the needs of the people. But, can health care be capitalistic? One of the primary characteristics of capitalism is a competitive market place. Yes, the insurance industry is a competitive industry as shown in auto or life insurance, but in health care, they are nothing more than a middleman between the providers (the doctors, hospitals and the drug companies) and the consumer. Their fees are determined by what they have to pay out with no competition among these providers. Hospitals don’t compete based on price, nor do doctors and drug companies. I spent the last week looking at ads in the paper, and spam emails in my account and never once saw a sale on hospital beds, colonoscopies or Xarelto. I never heard of hospitals offering one day free with every 4 days in the hospital, or an orthopedist offering a 10% discount with the purchase of a skateboard, and the drug companies don’t align themselves with Hostess to offer a discount on insulin with the purchase of a package of Twinkies. And, although drugs advertise on TV, there is no single drug that is manufactured by more than one company for the first twenty years. In fact, in a great number of regions in the US, there is only one hospital, one doctor, and only one preferred drug for a specific health problem. So, where’s capitalism and the freedom of choice.
The Pit and the Pendulum
In 2009, the Democratic Party, led by President Obama, committed to find a solution to the health care problem. The U. S. had the most costly health care system in the world with every American paying almost 50% more than the next 3 countries. Increases in premiums had become a common occurrence every year and those increases were the sole results of the free market’s lack of controls. They were a combination of the cost of the insurance middleman, lack of price regulations at the provider level, and those with insurance (either privately purchased or company subsidized) supplementing for those who neglected or couldn’t afford the high cost of health insurance. The theory was if everyone had insurance, the cost would go down. So, with the hope that Republicans would step up to the plate, they adopted a plan that had been endorsed by Republicans in the nineties and implemented by a Republican Governor in Massachusetts. Basically the plan was to use the current insurance market place and have the government subsidize the cost of premiums according to income. Although it did cap profits on the insurance industry, it neglected to set price regulations on the providers. The results was a return of increases in the premiums and the withdraw of many insurance companies who found themselves losing money because of these regulations on them and not on the providers. “Obamacare” quickly became the nemesis of the Republican Party and repeal and replace became their anthem. But, after 7 years of attempting to repeal it, they never offered a viable option to replace. Now, despite the drawbacks of higher premiums and deductibles, it is more popular than ever, with 61% of Americans wanting a better version rather than a repeal. Meanwhile, the cost to the government is continually going up with no top in the foreseeable future.
The Enemies at the Gate
At the same time, the Alt-right and left were busy crying for more traditional solutions. The Alt-right wanting to return to the old system and let the market dictate price, but the return to the old way would immediately knock at least 20 million off the roster and without price regulations at the provider level, the cost would continue to rise putting more and more of the middle class below the ceiling increasing that number of uninsured.
On the other side, the left stood firm for a single payer (national health care) system like all other industrial countries and leave the bulk of the increase cost at the feet of the wealthy. Everyone would have insurance, but even with cost regulations, all the wealth of the rich couldn’t pay for it and once again, the middle class would be left to foot the bulk of the bill. And, with a debt already at $20 trillion, where would it all end?
Tell Me It Ain’t So, Joe
So, if the ACA, the ACHA, the original system and national health care don’t work, can there be a system that will? Understanding that the cost of health care insurance is dependent on the charges of the doctors, hospitals, and drug companies, one solution emerges. The first part of the solution is regulating what provider’s charge, but that stick by itself won’t work. You need a carrot by creating incentives for research and development for drugs and technology (much like we do in the defense industry) and making the reimbursement system simpler lowering the cost to hospitals and doctors. At the same time, constitute heavy penalties for abuse as a deterrent to all providers. A huge carrot to them would be to bring fairness to the legal system by creating panels for malpractice rather than juries that are made up of a combination of health care experts, legal experts, and common people with standardized punitive rewards except in extreme conditions.
Also, much like Medicare, make private supplements available to the consumers who want a little more like private rooms, doctors of their choice, and bigger discounts on drugs. That particular market place can be specialized to the needs of the consumer in an a la carte type system. To prevent providers from leaving the program, a regulation could be implemented requiring they accept a percentage of patients from the government program to qualify for the private status. And, as far as the drug companies were concerned, profits could be set against costs that could be implemented on a floating scale. Does it take away from the free market? Yes, but it creates a balance between liberty and justice for all.
Show Me the Money…
There is no doubt that this monumental task carries with it a monumental cost. A cost that, under current circumstances, is unimaginable. The problem with financing this new system will take as much effort as the system itself. Simply taxing the wealthy would never raise enough and would continue the argument of unfair taxation. Taxing at the wage level would put an unfair burden on the lower income participants. So, what are the options?
It would seem that a separate “health care tax” would be the most appropriate. It could be a hybrid of value added and sales tax where both the sale and purchase/price of an item or service is taxed at every level along the production chain. This tax could have rates that are delegated to goods rather than money earned. And, the percentage of tax could be regulated between necessities and luxuries. Food and housing could have a very low, or no tax base. Some food would be considered necessary and would have no tax, while other foods would be considered luxury foods and would be taxed accordingly. The same could be used on the purchase of automobiles. All cars would carry a small tax, but as the price goes up, so would the tax percentage. Whereas luxuries like vacations and entertainment would have a single tax rate. With the tax coming at every transaction, the percentage could be small and have little, or no affect on the economy. I will leave the numbers to the actuaries for now, but when you combine that revenue along with a $10 or $15 co-payment and the reduction of cost due to regulations, incentives and the fact there would not be any uninsured patients, this approach just might work.
A Randumb Thawt…
We all know that the devil is in the details and an innovative system of this kind cannot be determined in 1600 words, but it is an approach worth further scrutiny. And, as with all monumental systems, it will need to be adjusted along the way, but most of the arguments against national health care from conservatives are addressed. The poor will be contributing to the level of their affordability, while the rich are not unfairly punished for their wealth. Corporations will benefit when considering their current cost of providing health care to their employees is $390 billion a year and growing, and the vendors of healthcare benefit from no longer having to provide services and drugs for those who currently don’t have insurance, simplifying the reimbursement system and lowering the expensive tort insurance cost. Most important, the debate over whether health care is a right or a freedom no longer has purpose, while it brings “Care” back into health care.
A win/win for everyone.