How many angels can dance on the tip of a pin? A comment on the New York Times’ Economix blogpost “Is Community Rating in Health Insurance Fair”?
With all the respect that Professor Reinhardt deserves, the question he poses in the New York Times’ Economix blogpost, “Is ‘Community Rating in Health Care Fair”?, is bogus – perfect economic nonsense, morality aside.
His own 2003 paper, “It’s the prices, stupid”, lay out why we have the highest health care costs in the world: it is, critically, because we pay the highest prices on the planet for services and goods that cost a fraction elsewhere. Additionally, as the professor surely knows, another big chunk is wasted by for-profit insurers’ pushing paper around to make sure that they can get away with paying as little for our medical needs as their campaign contributions will afford.
Not to mention the fact that because we are hopelessly divided as a nation into a gazillion pools and plans, we fail to cross-subsidize in publicly useful ways, namely, very broadly and randomly, so that the system can be financially sustainable. Even for-profit insurers cross-subsidize, but in their case they do so to make sure that they enroll the healthier (and cheaper) “customers”, so that they can bring increasingly handsome profits to shareholders. And they dump the sicker and poorer on increasingly strained public plans (and then blame Medicare or Medicaid for their “financial unsustainability”).
So if rather than insisting on “uniquely American solutions”, such as leaving to for-profit insurance the task of financing health care for the majority of Americans, we did what every industrialized nation in the world has done, namely, ban profit from the financing of medically necessary services (yes, even the Swiss, as of 1996, have concluded that “it’s the profit, stupid”), and move to a social insurance system, the scenario, indeed the prices, painted by professor Reinhardt would never occur, so the question would be moot: both group A and B members in his thought experiment would be very happy, I suspect, cross-subsidizing whoever happens to be sick at any given moment, at dirt prices (compared to what we Americans pay), and both groups would likely feel this is fairer than subsidizing health insurance shareholders and CEO’s fat paychecks. No less importantly, they would know that we (or our children) can follow the jobs of our dreams (or even start a business!), rather than limit ourselves to those that include “health benefits” (whose numbers are decreasing as we speak).
Put another way, everybody would benefit from substantially lower health care prices, none of us would see our health care money go to financing wasteful paper-pushing, and cross-subsidization would occur for the benefit of the overall public good, in the same way that it does for any number of other things, such as Fire Departments, public schools, or National Defense. And what is more, we would finally enjoy the freedom to choose what really matters: our doctors or medical establishments, rather than from within those euphemistic lists of “preferred providers”.
Everybody would benefit, that is, except from those who make a living either at the expense of Americans’ health or by sponsoring Orwellian health care debates tantamount to those in the Middle Ages attempting to establish the number of angels that can dance on the tip of a pin.
And do not believe those who tell you that it is your fault because of your unhealthy lifestyles: Britons spend a fraction of what we do — 95% of them never see a medical bill in their lives – yet there isn’t a shred of evidence that they go more often to the gym or eat more broccoli than we do (however recommendable broccoli and exercise might otherwise be). And neither can “technology” or “aging population” be the whole story: if not, ask the Japanese, who use far more technology than we do, visit doctors substantially more often, and are substantially older than we are, yet pay 50% of what we pay.
Finally, don’t believe in those who tell you that social insurance is “politically unfeasible” either: when Otto von Bismarck started social insurance in Germany back in 1883, he did not do so because he was a socialist, but rather to defeat socialism, because he believed that “the social insecurity of the workers makes them a peril to the state”.
We can’t expect meaningful change from politicians or experts:
It’s really up to us.
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