Archive - Dec 17, 2009
Given the recent twists and turns in the health care reform debate in the United States, let me present a view of what the issues are and some possible ways forward.
The biggest problem is that health care costs are out of control in the United States. According to the World Health Organization, the only country that spends more on health care as a percentage of gross domestic product is Timor-Leste, or East Timor. Of course, this is for data from 2006 when East Timor was in the middle of a bloody civil war.
Also according to the World Health Organization, at least thirty countries have higher Health Life Expectancy at Birth in 2007 than the United States. Put very simply, we’re spending a lot more for health care in the United States and getting a lot less.
Some of this comes from the amount of uninsured Americans. According to a report from the Center for Disease Control, 2005 data showed 14.8% of Americans, or 43.6 million people were without health insurance. These people pay for medical coverage out of pocket, or sometimes go bankrupt and do not pay at all. The poorest often use emergency rooms, the most expensive form of medical care, and only when the medical condition has gotten much worse and much more expensive to treat.
With this, a study by Harvard Medical School and the Cambridge Health Alliance, published in the American Journal of Public Health estimates that 45,000 deaths annually are linked to lack of health coverage in the United States.
How do we address this? One approach is to make health insurance more affordable and then require everyone to have it.
One of the key concerns has been to do away with the ability of insurance companies to deny coverage because of pre-existing conditions. This is a good idea. It should reduce the number of uninsured. However, it will bring in many more expensive patients to cover. Where will the money come to cover these patients? There are two important aspects.
Just because insurance companies won’t be allowed to deny coverage on pre-existing conditions, doesn’t mean that the rates will be cheap, and some have claimed that insurance for people with pre-existing conditions may cost as much as three times the price for coverage of those without pre-existing conditions.
In addition, the insurance companies have complained that if you make it a requirement for insurance companies to cover people with pre-existing conditions, then people will try to ‘game’ the system. They’ll wait to get coverage until they have a serious condition. This will mean less premiums for the insurance companies until such a point that the costs are greater than the premiums and will drive up everyone’s health insurance costs. Their suggestion? Require everyone to have health insurance.
Requiring Health Insurance
It is interesting that the thing that has many conservatives so up in arms is the requirement that everyone have health insurance. They scream at the Obama administration and the Democrats on Capitol Hill about this, but many seem not to realize that this is a request from their beloved free market health insurance companies.
Yet if you are going to require everyone to have health insurance, you come back to the need to make sure that it is affordable for everyone. How can this be done?
One possibility is to allow people to get insurance from the Government. This has been presented as the ‘public option’ as well as expanding Medicare and Medicaid.
The Public Option
It is the public option that seems to be the sticking point. Sen. Lieberman has said he will vote against allowing the Senate to have an up or down vote on the Public Option or on expanding Medicare and Medicaid. Others, including Dr. Howard Dean have said that the Health Care bill, as it stands in the Senate right now, without a Public Option would simply be a license for the insurance companies to collect premiums from a larger, legally mandated set of individuals without improving their service. The way we need to improve service is through competition.
His suggestion is that the Health Care Reform bill in the Senate should be killed and we should go back to either simpler pieces or reconciliation on the House Bill.
Competition and Accountability
A public option is one way of ensuring competition. Health insurance companies would need to compete with the U.S. Government to provide the best insurance. The complaint against the Public Option is that the Government would have an unfair advantage due to things like the Government’s credit worthiness, access to capital, etc. So, if we abandon the public option, how else can we ensure competition?
According to a report by the Center for American Progress “In at least 21 states, one carrier controls more than half the market. More than half of the market is controlled by two carriers in at least 39 states.”
If we cannot get real competition via the public option, it seems like there might be other options that should be considered. A good starting point would be to have the Anti-trust division of the U.S. Justice Department go after the insurance companies and start breaking them up.
In addition, insurance companies that deny coverage should be made liable for medical malpractice, similar to how doctors are liable if they mistreat a medical condition.
The End Game
With that, I do not agree with either Dr. Dean or President Obama. We should not kill the bill, nor should we rush forward with it. Instead, we should put it on the back burner while the Justice Department starts breaking apart the insurance companies, and malpractice lawyers start going after the insurance companies.
I remember as a kid always being told not to negotiate with terrorists, or those that take hostages. We should not be negotiating with Sen. Lieberman as he takes the health care reform legislation hostage to protect his cronies in the insurance industry. Instead, we need to show them that hostage taking has serious consequences. Then, they can decide if they want U.S. Anti-trust lawyers and medical malpractice lawyers going after them, or if they might just be better off allowing competition in the form of the public option.