Universal health care is on the nation's mind. It's on my mind too. Do we have problems to solve? You betcha. Will the president's plan and accompanying legislation fix those problems? Maybe. Will the plan posited cause other (unintended and intended) problems? Most likely. To be fair, almost any solution will have unintended consequences and problems. The key? Work to minimize the collateral damage while maximizing the intended benefit.
How do you do that? You roll out the first solution on a very small scale. That's how you'd do it in a business. You'd start small, say in a region or state. See how it goes. Does it work? What problems arise? What unintended consequences do you find? Does this mean you go slower than rolling it out to the whole nation at once? Oh yes, but this way you minimize risk and let's face it this is risky legislation.
Until recently the President wanted this legislation rushed through congress. Why? He argues that we have people that are in dire need of what this legislation will do. But this legislation doesn't provide care for people, it provides a type of insurance for care for people. The care is available, even if you can't pay. The emergency room won't send you home if you don't have insurance. The doctors won't refuse you a surgery that you need to preserve your life. The care is available. There is also government sponsored insurance already available for those recently laid-off (search COBRA insurance). And I might add, that care is some of the best care in the whole world. People from other nations come here to get care. Our doctors and nurses are wonderful. Is that care expensive? Oh, yes. Let's talk about that.
Why is the care so expensive? I don't pretend to know all the reasons but here are a few.
The first thing you might come up with is the doctor is making ridiculous amounts of money. Although they do, generally, make a good salary, their profession required A LOT of training ("A lot of people go to school for ten years." "Yeah, they're called doctors"). Shouldn't they be able make good money for their investment of time? If you answer no, then why would they put themselves through Molecular Biology or Organic Chemistry? It's true some doctors would still become doctors just because of their passion for medicine, but would as many? We need doctors. Oh, I can hear you, "So we should pay them gazillions of dollars and let them price gouge us!?" No, but in a capitalistic market there are mechanisms the could regulate the prices if we let them. We'll talk more about that in a sec. That training also cost a lot of money. Part of that salary goes to paying off the expense of the training. No, I don't begrudge doctors a good salary.
Another cost that I was ignorant of till I talked to the father (doctor) of one of my friends is the cost of insurance. "What insurance?!" you say. "The insurance pays them!" No, I'm talking about malpractice insurance. Because of all the crazy lawsuits we've had, doctors have to carry heavy insurance in case someone comes after them (Yes I know there are legitimate lawsuits too, but the spurious ones have caused trouble for all of us). What if that insurance didn't have to be so high? What if we had a way to punish frivolous lawsuits? I think that would help bring costs down.
While my wife was pregnant she received an ultrasound in the doctor's office. Not the one where they tell you the gender of the baby, but just a routine checkup. It was covered by the insurance but we like to look at the bills as they come by. The ultrasound cost over $100! And it was brief, the doctor was just taking a quick peek to make sure the baby was in the right place! I was blown away. If we were paying out of pocket, do you think we would have got the ultrasound? Not at over 100 dollars. We would have asked how important it was. We would have tried to negotiate a better price. If it was absolutely necessary and the doctor wouldn't come down we might have gotten it, but do you think we'd starting checking what other doctors charge? Oh, yeah. We would have applied "market pressure". Part of the reason health care and therefore insurance are so expensive is because of insurance. Think about it. If you worked for a big firm and they sent you on a business trip and all your expenses were paid, what would you eat? Oh baby, steak and lobster every night! When you don't feel the pain of paying, you don't pay attention to the cost.
Dave Ramsey talked a little about this when he was talking about how to get health insurance when your job didn't provide it or for those that are self-employed. He recommended raising the deductible on your insurance. What does that do? It lowers you're premiums. He then recommended setting up a Health Savings Account. What's that? It's a pretax saving account that grows tax-free and the money can be spent on health care costs without penalties or taxes. You own the account and they roll-over each year. What does all this mean? It means you pay out of pocket for the first few thousand dollars of health care you need and then the insurance kicks in. It also means, if you don't need to use the money, you get the keep the money and still have low premiums (making insurance affordable). As an added bonus, because you're paying, you're watching what the doc is charging and you'll too apply "market pressure" (thus decreasing costs).
There are other things that contribute to health care expense that I'm not sure how to tackle. New machines (gadgets) are expensive to develop and deploy. Prescription drugs can be VERY expensive too. Having chatted with friends of mine that work on developing new medicines, I learned that the process is long and requires huge amounts of upfront capital (money). For every drug that finally makes it to the market, there are lots that don't and the price of the drug covers not just its development cost but the cost of its "brothers" and "sisters" that never made it. Even then, sometimes the process to create the drug is labor and cash intensive. How do we bring down costs? I'm not sure. I don't like the idea of price fixing and besides that the only thing I can think of is letting the price come down as the patent expires and people find better ways to manufacture the drug. If there is profit to be had, someone will find a way. Almost all of this applies to the gadgets too.
So health care is expensive. What if we regulated everything instead? That may fix the prices, but it seems like whenever you clamp down some part of a free market, some other part starts to wriggle like crazy. Less "poetically" put, when you regulate, it seems like you always cause unintended problems. Undoubtedly, there will be some regulation, and there probably needs to be at least some, but that's all the more reason to take this slow. Try it out on a smaller scale. Adjust and redeploy.
So why is Pres. Obama in a hurry to get this passed? To me, it doesn't seem rational to hurry this through. Remember the bail out bill last Feb? "Oh, we have to get this through right now! Don't stop to read! Don't stop to discuss! Just pass it!" And then remember all the "Oh shoot, we didn't specify how we wanted the money spent. Let's fix this some more." I'm glad he's given up the Aug. deadline, but I'm not sure the end of the year deadline is a good idea either. I can only guess at why, but if I were Pres. Obama I think I would want to get this passed before the 2010 elections because there will probably be a switcheroo of power in congress. People haven't been happy with this plan in it's current incarnation (legislation), and if I could get it passed and behind me that might make it easier for those members of congress that are trying to get re-elected. I'm totally guessing here, but I think this is his primary goal with the deadline. In my opinion, in a best case scenario, helping people is really nice secondary goal, people that don't have insurance will be able to get it. In a worst case scenario, this legislation means a lot more "change" than any of us want, and he wants it passed before anyone takes a hard look (which is hard because the house bill is over a thousand pages long and written in lawyer legalese). I don't think Pres. Obama is evil incarnate, but I do think he's a brilliant politician. That isn't a compliment.
There's more to discuss on health care, especially what I've gleaned from/about the house bill. Keep an eye out for part 2.
