News

Should the U.S. Government provide health care to every citizen?

“Yea”

By Seke Ballard (OG), Section Representative

Though I recognize the appeal of a debate on the constitutionality of government involvement in healthcare, my stance is that such a conversation would be of no practical use, namely because abolishing government involvement would be far too disruptive and thus politically untenable. That said, my ramblings rely on the assumption that we have to take what we have now and change it in such a way that isn’t overly disruptive, reduces costs and improves quality.

Facts: According to the OECD, in 2007 the U.S. spent roughly 16% of its GDP, or $2.3 trillion ($7,421/person), on healthcare. Though this amount represents a 5.8% increase from the amount spent in 2006, healthcare expenses are expected to grow at a rate of 6.7% through 2017, an amount which far outstrips inflation and wage growth. By comparison, the amount the U.S. spends is double the average amount spent by OECD member countries. Given these staggering projections, the Congressional Budget Office, a nonpartisan body, estimates that healthcare costs will consume 25% of every dollar earned by the American workforce by 2025. Ironically, higher spending doesn’t translate into better outcomes. According to the CIA, the U.S.’s life expectancy of 78.11 years is ranked 50th in the world, far behind other industrialized countries such as Japan (82.12), Australia (81.63) and Canada (81.23), all of which have some form of national healthcare. Obviously this is an imperfect metric, but I think it nevertheless illustrates what I’m driving at.

My point in this data-dump is not to make everyone go apeshit, but rather to point out that this is a fiscal problem that requires urgent attention, not least because that ¬ of a dollar could otherwise be invested in productive measures that will bear fruit in the future (i.e., education, research). To bend the proverbial “cost curve,” the Obama administration has suggested a number of proposals, many of which require a substantially larger and more active presence of the federal government in the healthcare system. The question at hand is should we be for or against long-term, active government involvement?

My sense is that this is a false dilemma. We have no choice but to have greater government involvement. One example of why this is true is the Emergency Medical Treatment and Active Labor Act of 1986, which basically requires hospitals to treat anyone in need of emergency care, regardless of citizenship or ability to pay. One of the results of this act, in conjunction with a lack of access to affordable healthcare, is that indigent patients use the emergency room as their primary care. Because they can’t afford to see a doctor on a regular basis, they wait until the symptoms of their affliction become too great to ignore before they ultimately go to the emergency room, which is mandated by law to accept them. This practice is bad for two reasons: 1) it isn’t preventative and 2) it’s obscenely expensive. The idea is that if poor folks had free/affordable access to primary care physicians, they’d be able to catch these symptoms in their budding stages, before they become more difficult and expensive to treat. Not only would this be better for the patient’s health, but it would be cheaper for the taxpayer as he or she is ultimately the one who foots the bill.

If you agree that repealing this act would be too disruptive, which I have already established as undesirable, then we have to accept that it’s here to stay. If it’s here to stay, one way, and perhaps the best way, for the government to reduce the cost of this act is to mandate coverage for all citizens. In theory, what this would do is alleviate the problem of the emergency room as primary care, largely because all citizens would have access to a primary care physician with whom he or she would meet on a regular basis. One other option is the creation of a public, government-run option which would insure patients at affordable rates, allowing them to access a network of doctors before symptoms become acute. In either situation, the government is an active and long-term participant in the healthcare system.

It is not my intention to suggest that this is the biggest, or even a big, driver of healthcare cost. My only point is that given our current patchwork of healthcare laws and regulations, in order to not be too disruptive, the government must assert itself more aggressively to bring down costs and improve quality.

“Nay”

By Justin McLeod (NB), Section Representative

At the recent Harvard Medical School debate that wrestled with the question, “Is it the federal government’s responsibility to provide health care to all citizens?,” a doctor advocating the single-payer system quoted his father-in-law: “It is impossible to have a discussion with people who act as if they are not looking for the truth but are already in possession of it.” I agree, and in my open-minded search for the truth, I became convinced that, almost inarguably, a single-payer system would in fact be preferable to the health care system we have today. In that spirit, I hope those of you in favor of government-provided universal coverage will consider, with an open mind, a reason to think twice about the reform bill bouncing around Congress.

Consider the likely scenario that the current health care reform effort will not result in a single-payer system but will instead just add further regulation of payers and providers and further increase subsidies for consumers. In health care and any other industry, increased regulation acts like a magnet for lobbyists-the more the federal government involves itself in a given industry, the more that industry is given the incentive to involve itself in shaping that regulation. Why does this matter? After the reform bill passes and America’s attention is diverted on to its next obsession, perhaps a celebrity murder trial or political sex scandal, the health insurance lobbies and pharmaceutical lobbies will slouch toward Washington to slowly but surely mold regulation and subsidies in a way that restricts competition and secures their position in the market. This historical trend is responsible for today’s excessive coverage mandates and indefensible bans on interstate competition in the insurance industry-which only lower service and raise costs. The public interest simply cannot compete with the interests of lobbyists in the long-run-the public has neither the focus nor the endurance to do so.

An additional boon to the healthcare establishment is the sheer complexity of the proposed regulation. When the general public can no longer understand the law, providers and insurers have free reign to alter it almost free of scrutiny. And after this bill (or another like it) passes, more than 1,000 pages in length, the health care market will achieve an entirely new level of complexity. If you desire proof of the coming hoodwink, look no further than the endorsements of health care reform by the American Medical Association and PhRMA. They are well aware that the short-term hit of the current reform bill will only provide greater opportunities in the future to compete on Washington influence rather than value to patients-and their core competencies are shifting from the latter to the former.

Clearly the current health care system is broken. But that doesn’t mean that anything is better than what we have now. Before we start recklessly adopting “solutions,” we would be well served by taking a closer look at what exactly is causing the high costs and poor quality in health care. A classical economist could argue quite persuasively that these problems are caused by high subsidization and restricted competition in the market-which are the current policies pursued by Capitol Hill. Yet once you get past the rhetoric surrounding the current reform effort, the health care bill is nothing but an extension and an expansion of those policies.

For better or for worse, in a world of practical politics, good intentions simply aren’t good enough to fix the health care system. The moral hazard of a publicly controlled, privately operated market-which is the maximum amount of socialism the American political system will bear-is too great. Only when we wake up to the realities of our political situation will we reverse our tracks and adopt the free-market solutions that can actually make a sustained, positive difference. Until then, I recommend buying pharmaceutical stocks to hedge your rising insurance premiums.
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October 19, 2009
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