Healthcare

With healthcare in the news so much lately, I decided to move this topic to the front of the queue of my backlog of topic posts. In this post I will discuss, in a very general sense, the fundamental issues surrounding the social policies of healthcare. First, accept as a given that there will always be members of society that lack the resources to deal with their healthcare on their own. Their situations could be the result of poor planning or just plain bad luck, but it is inescapable. We, as members of a civilized society, have the responsibility to decide how to deal with those situations.

The first method, of course, is to do nothing. I call this the “Dying in the Streets” method. It seems straightforward enough. If you are irresponsible or unfortunate enough to be in a situation that you can’t handle, you exhaust the resources that you do have, die, and leave your family destitute. As heartless and evil as I make it sound by putting it this way, this is the desired method of a great many Americans.

As you may have guessed, “Dying in the Streets” is not my favorite method. In addition to being unnecessarily cruel, it fails to take into account the full social cost of the loss of the individuals who fall victim to circumstance. Everyone contributes to the whole of society in their own way and their loss is felt. They contribute to productivity, consume, pay taxes, care for their children, and are stewards of their property. When we fail to deal proactively with healthcare we create a domino effect of social problems that must either be dealt with or continued to be ignored. I can imagine this method being justifiable in a poor country with little resources, but in a wealthy country like the United States it is shameful.

The second method is to force medical institutions to take care of people and then figure it out later. I call this the “Freeloader” method. Everyone does their own thing, and in the event that someone has a health problem they receive care at a provider. Afterwards, the provider sends them a bill. They pay it if they can and are willing, but, if not, the provider just accepts the loss. The expenses of those losses are then passed on to other customers of the medical providers in the form of higher costs. In the worst scenarios, the financial losses result in the fiscal collapse of the provider altogether. It seems fairly clear to me that the “Freeloader” method is unfair to all parties involved.

One aspect that the first two methods have in common is that they are market solutions. The general problem with market based solutions to healthcare is that it is not naturally priced. Ask the question, “What is the price of a good or service that will save your life?” The correct answer is, “What have you got?” That is an absolutely terrible place for a consumer to begin a fair negotiation for a good or service. For profit entities will typically price their product at a point to maximize their profits. The price will increase, excluding the poorest consumers, until the difference in price and the customer pool reach equilibrium and maximum profit. The cruel reality of pricing is that some healthcare consumers could actually pay for the cost of what they need, but still not be able to afford the price.

The third and last method I’m going to discuss in this post is to have a compulsory, socialized healthcare program. I call this the “Responsibility” plan. Participation is mandatory, and everyone contributes based on their means in the form of taxes. If someone has a healthcare problem it is taken care of because it has already been paid for. This method includes 100% of the population, and, therefore, eliminates the collateral damage of unnecessarily neglecting the unlucky. It also eliminates the freeloader; everyone is proactively contributing to the cost of healthcare. A centralized payment source negotiates reasonable compensation to medical providers. That removes the market incentive for providers to not accept payment, because not accepting payment would automatically exclude so many customers that it would reduce profit.

Even considering the benefits, many Americans scoff at socializing anything new. Perhaps this is a carryover from the Cold War and McCarthyism. While socialization shouldn’t be our go-to solution for any social problem, I think it should at least remain an option. If we look at the evidence, I think it suggests that healthcare is a good candidate for socialization. World-wide studies on national healthcare systems consistently find that the United States pays the most per capita expense. We are also consistently ranked very low in measurable statistics. These are not trivial statistics; they are things like life expectancy and infant mortality. Many of the countries that are paying less, and getting more, have a mandatory, socialized system. Think what you want about socialization, but they are making it work somehow.

The United States incorporates a bit of all three of these methods into its own disparate healthcare system. If you have a condition or illness that requires long-term care, such as cancer or diabetes, you are on your own. Hopefully, you have insurance or a lot of resources. If you are in an accident and require emergency care, a hospital is required to treat you. Then paying the bill is between you and them. We even have socialized programs for some. Once you reach the age of 65 you qualify for Medicare. There is also Medicaid, which is mostly for low-income citizens. Nowadays, most of us, me included, have private health insurance sponsored, and partially paid for, by their employer. However, there is still plenty of room for improvement. Even with the small progress we have made recently, over 10% of our population still falls into the “Dying in the Streets” and the “Freeloader” category, and we are still paying more and getting less than the rest of the modern world.

Admittedly, I am just barely scratching the surface of this issue. It is huge and complicated, and these are just my basic thoughts. Here is what I hope you take away from this. Healthcare is a critically important issue with serious real world consequences; literally life and death. We have a responsibility to our fellow citizens to work together to help improve our quality of life. The next time healthcare reaches the national forefront, and it will again probably sooner rather than later, give change and progress a fair chance. With healthcare in particular, we have the opportunity to review what other nations are doing. There are a lot of solutions out there that have been studied for years. We can look at the data and create an informed and reasonable plan that will work uniquely for us.