Thursday, January 03, 2008
Comparing Health Care Plans
The New York Times has an interesting piece comparing the health care proposals from Senators Obama and Clinton. From the article, I have to say that I consider Obama's to be more reasonable. There's reason to believe that simple is better, and finely targeted government policies aren't as effective as they might be (side-note: I dislike CAFE and corn-ethanol legislation for similar reasons).
Subscribe to:
Post Comments (Atom)
4 comments:
A criticism of the Obama plan that I've heard is that by not being a universal mandate, it allows people to "game the system." That is, people can buy in at any time, so they'll wait to do so until they have a health crisis, which will cause the system financial problems since it will be covering the most expensive medical costs without balancing those out against the lower-costs of insuring healthier people.
On the other hand, I think the biggest problem with a universal mandate is the decision of what, precisely, to mandate... and how to keep the mandate from growing steadily over time, adding "just a little bit" to an ever-growing burden.
The problem you cite is why "health insurance" is a misnomer, in that it doesn't really function like other "insurance." Normally, insurance is a given payment based on someone's risk of an unlikely event. My automobile insurance is there to protect myself and others in the unlikely event of a crash... but it doesn't cover oil changes, regular maintenance, and the like.
Instead, what we call "health insurance" is more like a "health third party payment facilitator." By covering man forms of routine, maintenance-like medicine, it becomes a system that is inherently unstable, because if the premise is "people can't afford health care, so we need insurance," but there is no external source of revenue supporting it, the system collapses.
Especially in light of the ongoing demographic shift in the country, I think making "young, healthy" people the primary source of additional funds is unwise. The problem is like that of Social Security - there just aren't enough young healthy people to support the expense of the old, sickly people. Given the way that income tends to increase over time, such a universal mandate would, I think, be a significantly regressive "tax" on younger and poorer people... and if the American expense of "I have it, so I might as well use it" took over, even this wouldn't financially cover the system.
Short answer: I don't think the biggest long-run problem is people gaming the system. It's that in any redistribution, there have to be winners and losers. And younger, poorer workers are a poor choice for a financial foundation.
If you want universal health care, you have to pay for it by taking from people who have enough money to pay for it.
Your bottom line makes sense, and I'm not totally opposed to redistribution for the sake of people's health. That strikes me as something on the arguably reasonable side of justice or goodness.
However, I also am working my way through an article that claims the way to really fix health care is to go totally free market. Any thoughts about that?
My thoughts, in brief:
I like the market, because it's good at setting efficient prices. The health care system hasn't been close to "totally free market" in ages, if ever. Even things like the FDA and state medical boards tend to inhibit the market. Medical schools limit the number of incoming students to restrict the number of doctors, thus increasing their wages.
The problem is if we decide that the level and/or quality of health care that people choose independently in a free market is "best."
The totally free market view would echo a sentiment I read (initially given by a source I can't remember, but who was or was close to President Reagan) in Greenspan's book "Government's job is to protect us from other people. The problem is when we deceide we need government to protect us from ourselves."
I think the root problem is that people don't choose to take care of themselves. Speaking from experience, many Americans are lazy, content with their unhealthy ways, and see no need to change until catastrophe strikes.
The Free Market says - "Fine, but you'll live with your choice." The most rational baseline likely to be established here is catastrophic health insurance (if any), with immediate needs paid up-front.
The We-Know-Better mandate giver won't "solve" the problems unless they cut to the core - you have to make people behave healthier, and you have to do so despite their revealed preference for doing as little as possible. But so long as we provide care for the symptoms while not addressing the problem, costs continue to go up because people will continue to make themselves more sickly, and more expensive, because they are ultimately divorced from the cost of doing so.
People don't seem to be good at saving and planning for the future. Health care falls in that category.
Truth be told, I don't think there is a way to fix "Health Care." We can try to manage costs, we can try to increase healthy lifestyles, we can try to educate, motivate, and coerce people to behave the way we think they should. But I think the root cause is human nature. So long as unhealthy is easy, we will be unhealthy.
That aside, providing incentives to prod people in the right direction is a good thing. Taxing (simply to increase the price) that which is unhealthy will probably reduce consumption. If pizza were more immediately expensive than grilled chicken and fresh vegetables, I'd be inclined to consume more of the later and less of the former.
Ultimately, I think the best way to make people healthy is to show it's in their best interest, not in the abstract long term, but in the pocketbook now. That means taxing the negative externalities (undesireable but not reflected in price outcomes) associated with poor health, while subsidizing things with positive externalities.
And making people healthy is the foundation of "fixing" the health care system. Anything that doesn't start from the ground up, in everyday living, is pretty much doomed to failure (or at least only very qualified successes).
Post a Comment