A Bee In My Bonnet

On another blog, I was recently told that, because I was wanting the government to do everything for me that I should perhaps move to Europe. I'm thinking, perhaps, that my politics were slightly misunderstood. Rather than use the the comment section in another blog to justify myself as a liberal commie pinko, instead I would like to post some thoughts here about something that has our country deeply divided right now.

Health care.

I think a bit of a history lesson is in order first. In the 1950's, health care began to be more technical and therefore more expensive. Unions saw pension and health care benefits as a way companies could help take care of workers without actually increasing wages and began negotiating with companies to try and improve the quality of their member's lives. I'll use the automakers as an example.

Union leaders sat down with the big bosses from the Detroit automakers, trying to encourage these large companies to pool both their health insurance and their pensions. The idea was that a larger pool of risk would generate more money. Also, a larger principle in pension funds would create larger interest payments and the pensions would have greater long term security.

The problem was that the unions had such a history of Communism and, yes, Mafia ties, that the businessmen didn't trust them. In addition, anything that required these competing companies to work together was regarded with unveiled contempt. The result? Single companies cut their own deals with the unions. This same practice spread to other companies and insurance suddenly became a really cutthroat business as companies shopped around to pay premiums for a few hundred employees here and there.

In the 80's a lot of manufacturers began to see the writing on the wall--with shrinking labor forces because of improved technology, smaller profit margins, and cheap overseas steel and workers--pensions and health care became unbearable burdens. Many of these companies are paying out pensions to widows whose husbands haven't worked in decades! And while the pensions are a pittance each month, if there are thousands of them . . . well, you get the idea.

The answer to the pension problem, at least for many workers, has been that most companies have gotten rid of their pension programs all together in exchange for 401K's, which they will sometimes match. (Social Security is a different issue entirely.) But nobody has figured out what to do about the health care issue because the rising costs of health care have so far outstripped inflation and manufacturing profits that traditional methods have not worked.

I would, in fact, argue that it isn't just cheap labor that has sent American manufacturing overseas, it is expensive health care. Full-time, American workers, whom companies want to hire, train and keep for 30 years do not come cheaply. Besides wages, a compensation package must accompany most full-time jobs. This is not the case in other countries. Not only do workers not expect such exorbitant salaries, but they do not need pension or health care plans because the government provides these things. The result is that in the 80's and 90's, blue-collar jobs left the US in the numbers of the tens of thousands, but in this century, professional jobs are beginning to leave as well.

So, it seems to me, that history would teach big business (and certainly small business) that they should be the most ardent supporters of some kind of government subsidized or run health care. I mean, a slightly heavier tax burden HAS to be cheaper than going out of business. Right?

Now, I am not so naive as to think that the government needs to put insurance companies out of business. We have an American problem here requiring an American solution. I've heard many good ideas recently, which I will now share here. Please add to the dialogue; I'm always trying to refine my thinking.

1. Create some kind dual system. When an employee is hired, they can opt for a certain salary and private health care they and the company both pay into, or they can opt for a slightly higher salary and government health care. The private health care/insurance is obviously going to allow a person to choose their doctor, probably wait less time to see a doctor and greater access to specialists. Both sets of employees would be a higher social security tax (2-3%) with an employer match. (For those who are paying a premium on top of this, the long-term benefit to a society with a healthier population is very real, though difficult to measure.) For people like my parents--getting older, two incomes, etc. private insurance would be a great options. For my family--young, kids needing immunizations and well-baby visits, low risk pregnancies, one income, etc then government insurance would be ideal.

Those who did not opt into private insurance either on their own or through an employer would automatically (with a legal social security number) be enrolled in government health care; if not everyone, at least the children. To keep some of the wait time down at government clinics, and to help people take some ownership over their own health reasonable co-pays ($30 or so) for everyone would still need to be in place for office visits (this would prevent people from waiting in line for every sniffle) and emergency room, etc.

While the bureaucracy costs of such a program are high, I would argue that the actual health care itself is cheaper. Why? Three reasons doctors in private practice are so expensive is that (a) they spent, in many cases, hundreds of thousands of dollars just to get educated. (b) The overhead in a typical doctor's office just to keep up with insurance claims is exorbitant. (c) Malpractice premiums increase all the time. All three problems would be mitigated under a federal program because government doctors would take a generous, but reasonable, salary in exchange for a payment of student loans, no insurance issues and malpractice protection via the federal government (including caps on punitive damages).

The cons to such a system would be the need for strict oversight to ensure that separate is equal, and that the poor would still have decent access to health care that was both fair and equitable. On the plus side, educated, medicated people know that lifelong health begins at conception, so any universal plan would have to address babies and children very specifically. Some form of subsidized health care would get more poor, pregnant women into the doctor sooner. I also see parenting classes with public health educators and nurses as being essential to the success of a plan like this.

2. Another idea involves use of the term "moral hazard." A couple of years ago, Malcolm Gladwell wrote an exceptional article in The New Yorker (part of his piece was based on a report actually put together by the Bush Administration). Although his article doesn't offer a lot of solutions, it does help to define the problem. For those of us whom have cheap insurance, we over consume it: we have a lot more than we actually need. For those with expensive insurance, there is never enough. He suggests some ideas for playing with the price structure.

3. 20/20 (I can't find the exact transcript from the piece, but the highlighted article is helpful) with John Stossel (who I normally can't stand) did a really interesting series of interviews in the aftermath of Michael Moore's movie, "Sicko." Stossel is a fairly conservative commentator and he pursued the idea that Americans need an American solution not a French or Canadian one as suggested by Moore. He talked to the owner of Whole Foods, who believes very strongly that the answer lies not in socialist principles, but in capitalist ones.

He maintains that Health Insurance ought to be more like auto insurance with a high deductible. The consumer takes care of all the little expenses, and maintenance expenses. But something like cancer, now that is totally covered, after your high deductible. The company also adds to a health savings plan for each employee that can be rolled over from year to year. Money in the health savings plan can cover everything from eyeglasses to acupuncture to TMJ surgery (things not typically covered under traditional health care.)

While there have been problems, the long term effect of people shopping around for health care and taking more responsibility for their actions would be a lowering of medical costs. Why? Well, right now, if you call your doctor and ask them the cost of a checkup and a round of shots for your three year-old, he or she probably has no idea. But under a Whole Foods-type model, generally applied, doctors would want to be competitive. If people are paying for themselves to go to the doctor then they want the best deal around.

4. This option does involve more of sinking the insurance companies, but it is not for reasons of socializing the system. Many doctors are finding that they can slash their costs drastically by refusing all forms of insurance all together. For the Stossel piece, a doctor in Appalachia was interviewed. He was a family practice doctor working on everything from shots to stitches to broken bones to general check ups. His frustration over insurance some years back led him to get out of the business all together and instead, put together a cash-only price list. Most of his "customers" have no health insurance, but can afford his low prices.

It turns out that paying out of pocket, at least for small expenses, is much cheaper than paying a 20 or 30% copay, a monthly premium and STILL meeting a deductible (what my "good" insurance plan looks like). And while getting a price list from your doctor, like a menu in a restaurant, might seem a little bit strange, what other service to you get from anybody that you have NO IDEA going into it how much it will cost? No where. Only medical care.

If your family is like mine, and you've changed professional jobs a few times in the last decade or so, it seems like your health care shake gets a little bit worse each time. The irony is that each time our premium or copay goes up or our benefits go down, each plan is touted as the "best" around. And while you might balk at the fact that I've cited three different articles here from a "liberal" magazine, the writers themselves have thought out and researched the problem and are trying to give the reader the most logical assessments of the facts at hand. Conservative pundits and magazines are going to scream and pull out their hair about "socialism" and costs. But I have to maintain that the long-term costs to the widening class-gap of health care are far worse to swallow than finding a way to equalize the system.

Barack Obama is going to be elected president of this country. I think the writing on the wall is plain. The choice now is to be part of the national discussion on health care or to rage against it and forever have our voices out of the compromise. It must be remembered that the Constitution, so upheld and revered by members of both parties, was an endless source of frustration to all of its drafters, as none of them got exactly what they wanted. But it is that very issue of compromise and civility over their differences that makes the Constitution, and our country, great.