Put up or shut up: tell what it will take to solve the health care problem

The debate over change in health care has become so tortured that we sometimes forget the simple issues involved. Here are a few things that come to mind for me that help frame this issue clearly.

About 16% of our population has no health coverage.  This group of people pays no premiums to help spread the health risk for the entire population (though some of them pay a small tax to Medicare). At the same time, this group is a drain on the health system because when they do get seriously ill they use emergency room services and the resources of hospitals that never get compensation for the services they provide. They also tend to delay their care when they get sick, which can have a huge social cost. Care is a lot more expensive if they wait until they are really sick. Or, and this is the tragic part, many of them die because they get sick and don’t have coverage (some studies say as many a 18,000 people per year).

At the same time, we have a health system that rewards health care professionals for procedures, not for their outcomes. Plus, health insurance companies have dwindled in number and the cost of entering that business is very high, because you have to cover millions of people to keep your risk pool manageable. All of this makes everything more expensive.

Then, who is that is actually paying for the care?  For the most part, it’s people in the workforce, who either pay some premiums themselves, or whose employers pay them (thus giving them indirect compensation). These are the people who also finance Medicare and Medicaid through their taxes. About 57% of the population is in the workforce—but not all of these people have health coverage and actually pay premiums.

As a result, perhaps about half of the population (or even less) pays for everyone else, and a huge chunk of the uninsured population contributes nothing to the premium pool that would spread risks for all of us, but they’re exposed to the same risk as anyone else.

All of this has become a vicious circle. Costs of care rise at rates well above inflation, insurance premiums get more expensive, and more and more employers bail out of providing coverage to their employees.

And when people have to pay premiums on their own, the must pay very high rates. It’s like when you pay a high room rate at a hotel because you’re traveling as an individual. If you were part of a large convention group, the hotel would probably give you a discount.

What does this lead to? Well, it’s now at the point where health care is one-sixth of the economy. Pretty soon it will be one-fifth, then one-fourth.

So, the government enters the picture trying to solve this mess. How can we get care to millions of people who don’t have it, and how do we address the problem of rising costs?

Well, there are a few things that come right to the surface. First of all, it sure doesn’t seem fair that insurance companies kick out people who are sick or who have pre-existing conditions. But if we make them take people who are sick, it follows that we have to require everyone to buy health coverage (or require all employers to pay for coverage for their employees). Otherwise, people would just wait till their sick to sign up for coverage. So you’ve got to do both—you can’t do one or the other.

The problem is, some people just can’t afford the premiums. They would go bankrupt. So we need to subsidize them. That means that some of those people who work very hard everyday are going to have to pay some of their taxes to help those other people out.

Essentially, the Senate and House bills tried to do all these things. They eliminated insurance company discrimination against sick people. They required everyone to have coverage. They set up subsidies to help people pay premiums. You can’t have reasonable health care reform and not do all of this. Plus, the bills made some effort, however small, to reduce costs.

Well, it turns out that there are a lot of people who hate the idea of all of this. These people realize that most people have health care and they are happy with what they’ve got. It’s easy to stir those people up and say, “This isn’t fair. They are going to tax you to pay trillions of dollars in costs you don’t have to pay for right now. And besides, this all means the government is going to take over health care—the most private and personal service we use.”

This virulent opposition, though it starts out fairly small, can stand its ground, refuse to compromise, and not give in on any substantive issue. If it can hold out and delay long enough, it can kill the whole thing.

Folks, that is pretty much what has happened. Because the U.S. Senate requires 60 votes to pass anything, if you hold out long enough you can pretty much count on prevailing.

If you support reform or oppose it, you can look at this summary and decide for yourself what makes sense. If you oppose it, I would only ask you this:  What do you think makes sense to solve all of these very nasty problems?  How do you want to solve the dilemma of what you do when 16% of your population has no care and contributes nothing to the premium pool, yet still uses very expensive care when they must have it? 

This is not simply a matter of extending charity to 16% of the population who is “down on its luck.”  We have a set of arrangements here that are slowly strangling our economy and draining our national treasure.  All of us are in this together—everyone may need health care, perhaps very expensive health care at some point in their lives. It is a huge shared risk. We have a system now that guarantees that prices will continue to rise and that will continuously make care unaffordable for more and more people. Our system now is like a lottery—we keep millions of people totally uncovered and exposed. We protect the rest, and leave the other to take their chances. And in the meantime, we keep making care more and more expensive and those of us who do have it are going to have use more of our income to pay for it.

So quit with your whining about government takeovers and death panels and paying higher taxes, and quit saying that this problem is just too complicated, and set forth an approach that solves the problem. The U.S. Congress had some solutions that made a serious effort. What do you want to do about them?