What Is the Purpose of a Health Care System?, Part II

Last week I proposed there were two answers to the question “What is the purpose of a health care system?

A. Provide health care
B. Support a profitable health care industry

I’m not opposed to a health care system that does both, but not if Purpose A is compromised.

Apparently Sen. Chuck Schumer is attempting to craft a “middle ground” that compromises Purpose A in order to support Purpose B. A New York Times editorial explains Schumer’s plan:

Any competition between a new public plan and private plans would be waged on a regulated field of battle within a new health insurance exchange. Most reform proposals envisage the exchange as a place where individuals unable to obtain coverage at work and ineligible for existing public programs like Medicaid could buy policies that would be available to everyone without regard to pre-existing medical problems. Low-income people would get subsidies to help buy a private or public plan.

Opponents of a new public plan have raised the specter that it might have unfair advantages that would enable it to draw customers from private insurers and ultimately drive them out of business, leaving virtually all Americans enrolled in a full-fledged single-payer system, like Medicare. That prospect could be mitigated by appropriate ground rules.

Now, get this part:

Senator Schumer, a Democratic member of the crucial Senate Finance Committee who was assigned to study the issue, has come up with some reasonable principles to ensure that any competition between a public plan and private plans would be a fair fight. In general, he suggests that a public plan should have to comply with the same rules and standards as private plans.

Because, you know, we cannot be unfair to the private insurance industry, even if it means compromising the health of citizens.

The public plan could not be supported by tax revenues or government appropriations but by premiums and co-payments. It would have to maintain reserves, like private insurers, and provide the same minimum benefits as all other insurers in the exchange. It could not compel doctors who want to participate in Medicare to also participate in the new public plan. And it would be run by different officials from those who run the insurance exchange to lessen the likelihood that federal officials would give unfair advantages to their program.

Because, you know, we cannot give unfair advantage to a public system, which means the public system will be priced out of reach for many people. Yes, it says “low income” people may qualify for subsidies, but we sort of have that now. It’s called “Medicaid.” The income ceiling for qualifying for Medicaid is so low that vast numbers of people who can’t afford health insurance don’t qualify for Medicaid, either. I am not hopeful that low-income subsidies for public health insurance would be any different. Let’s forget about putting people through the indignity of qualifying for subsidies and make the bleeping insurance less expensive, period.

I just sent Sen. Schumer — one of my senators — a message explaining to him why he can go to hell, btw.

And the New York Times editorialist is no less clueless:

Mr. Schumer is on the right track. It should be possible to design a system in which public and private plans could compete without destroying the private coverage that most Americans have and for the most part want to keep.

I don’t think most Americans give a hoo-haw about private versus public coverage, as long as they can see a doctor when they need to. People who have insurance now and can see a doctor when they need to don’t feel a need for change, but if their insurance was publicly funded and they could still see the same doctors they are seeing now, I very much doubt there would be riots in the streets because the government isn’t being fair to the private insurance industry.

28 thoughts on “What Is the Purpose of a Health Care System?, Part II

  1. NPR had Peter Orszag on this morning, and he was doing some mighty fancy verbal pirouettes and leaps trying to assure listeners that Purpose A will not be compromised. And yet. As long as health care is marketed in the same way as, say, new cars, or the wonderful “toaster” analogy that one of our commenters used recently, cutting costs will equal cutting services. And we can’t have that; you win the free-market game with profits.

    I have a really cheap toaster from Target, because I almost never make toast. On the other hand, I use my heart, lungs, liver, brain, spine, eyes, ears, joints and muscles every second. Those parts are getting old. The free-market view of health care would say, “If it costs too much to fix her, just toss her on the landfill. Someone younger and more efficient will replace her.”

    So if I may extend the toaster analogy… not only can we not walk away from the “commodity” of health care; we mustn’t allow the sellers of health care to treat people like used-up kitchen appliances.

  2. draw customers from private insurers and ultimately drive them out of business, leaving virtually all Americans enrolled in a full-fledged single-payer system

    Oh noes, because we can’t have that happening. Virtually all Americans with health care? (clutches pearls).

    I have insurance now (one of the few lucky ones) and I can verify that I’m not terribly attached to Cigna. If they were to hand the reins over to the government, I wouldn’t mind. It’s hard to look at the health care systems you see in France, Canada and Finland and realize that we are the only industrialized country in the world that doesn’t provide basic health care for its citizens.

  3. The ultimate purpose of a private/publically held business is to return a profit to investors. That is obvious. There may be laudable intentions that are concurrent, but they must be made secondary if the businesss is to remain in business in the traditional sense. Now that that is out of the way, I’d like to deal with A and B above.

    I have some experience that qualifies me to remark on these topics. I have a handicapped child, elderly relatives with a variety of medical conditions, friends and younger relatives with various conditions. I am not a health insurance business person in the sense of running the business, but I have had the business, if you know what I mean.

    Providing health care should be looked at to some extent in the same faulty way we see education: there is a human service provided at some cost, and people want more/better/different/some. Providing basic health care (whatever that is defined as being) to all should be the first priority. That is pretty clearly doable, since we already spend twice as much money as anybody else for a lower level of care than is given to people who pay less, on a national/per capita basis. This has been cited as unchallenged fact so often that I don’t think it is really questioned any more.

    The need to provide an income for health care providers is incumbent on the recievers. Currently that is a need met by a conglomeration of private and public funds. Fine. However, we can see that the current system is not optimal. I would like to know how much of the current money spent on health care (including drugs and equipment and supplies) goes to lobbying, insurance salaries, stockholder dividends, etc. Those funds should be examined. So should the accounting that sends out $200,000 bills for knee replacement surgery. No regular people can pay for that. No insurance company pays that. I wonder how much of that is a real bill and how much is just “talking down” leeway? That is a real number, by the way. I know the person who got that bill.

    I also question how much good there is in billing the disabled living on $980 per month for $2,000 accumulated by their quarterly check-ups for chronic, ultimately terminal conditions? I know that person, too.

    I can still hear the woman on the phone telling me the replacements for my son’s 10-year-old crutches had been denied for payment because we didn’t get prior approval. I eventually got them paid for by insurance, but I did ask what she thought we were going to do with the crutches, go cavorting willy-nilly about the land with them? Perhaps I should now try for a battery-powered ride-around chair “at no cost to me” as the ads say. Evidently if a company can make a big dollar there are no boundaries and plenty of help to override objections.

    Back to Schumer and the NYT: What else would you expect from them? The NYT has a “winter coats for the needy” attitude, as well as a “country club members collecting for poor kids to go to camp” attitude about a systemic condition. Schumer is a member of a permanent summer camp. There is nothing wrong with specific assistance, but Schumer and the NYT have environmental biases. Follow the money. It builds the walls around the compounds they inhabit.

    Go to the emergency room with someone insured who has heart symptoms. Of course triage will get you back to a room immediately because of the possibility of a sudden negative outcome. But our society is triaging many of the other people left in the waiting room. The ER is not the place best suited for caring for many of its occupants. We could do better, cheaper and more conveniently. Something as common-sense as non-emergency clinics would cut costs if everybody who went in was carrying some sort of payment certificate/guarantee/method.

    There are people who know how to improve our situation. They are not the ones with the money.

    Unfortunately, I have more to say. Happily, however, I will say it later. Thank you for listening.

  4. How about we return to a time when there was no such thing as health insurance – I remember it. Radical? Of course, but nothing short of ‘radical’ will get us off our present train wreck of a health care nonsystem at this point to be replaced by yet another train wreck of a health care nonsystem.

    It’s surprising that the champions of free-market economic systems haven’t jumped into the health care fray and advocated an end to health insurance – public and private. Good doctors will drive bad doctors out of business as will good hospitals vs bad hospitals. Charge too much? Empty waiting rooms. Fees for service will adjust to that old ‘whatever the market will bear.’ And people who happen to be sick and poor? Why, faith-based organizations will provide health care free of charge, won’t they?

    Then again, it’s not surprising given that free-marketeers have always and will always practice selective capitalism, sort of like Christians who practice selective Christianity? (If you can’t tell at this point, I’ve obviously reached the end of my tether.)

  5. A family of 4 can cover their children on medicaid in my state on 46,000 yrly. that is not low income. the problem is that medicaid can only cover certain categories of people. Many people now have insurance but don’t want to pay for it. They drop it and get medicaid because they don’t want to pay the copays /premiums. the problem is the senators are so removed from reality that they don’t even know how the “system” we have now is malfunctioning. I have done medicaid eligibility since 1975. Each category has different rules and income and asset rules. the commentators don’t know jack about which they are bloviating.

  6. This is becoming what I was afraid it would: A horse built by committee (you can pick any animal you want as to what it would look like – usually the analogy is an elephant, and wouldn’t that be ironic).

    Chuckles is my Senator, too. A more useless corporate tool with a “D” next to his name would be hard to find.
    What the Hell ever happened to giving the citizens the same health care as the Patricians in DC?

    And Joan, you’re much more than a toaster to me…

  7. How come the issue of people filing personal bankruptucy due to medical catastrophe, people who are covered by medical insurance, never gets brought up in these discussions? That number is not small. It is the majority of personal bankruptcies.

    We keep using the term “health care reform” but we are not talking about that subject at all. So long as single payer is not on the table, and it is not, then we are not talking about “health care” and we are not talking about “reform.” We are talking about minor revisions in the “health insurance” industry. This is all flim flam, closely akin to the torture debate. Sounding brass; filled with noise and fury, signifying nothing.

  8. Actually, now that I think about it, the camel is usually used as the result of a horse built by committee.

  9. It’s surprising that the champions of free-market economic systems haven’t jumped into the health care fray and advocated an end to health insurance – public and private.

    Actually, Felicity, some have done just that. Usually it’s the Libertarians.

    The coffee-break comments at my workplace are interesting. We’re insured by BC/BC of Nebraska. Our coverage isn’t horrific, but could be better. Rumor has it BC/BS of Iowa is much better… but then, the grass is often greener on the other side of the Mighty Mo. The purveyors of that rumor have no stated criteria for judging. My coffee-break companions also fear that Obama is planning to do away with all private health insurance, like, tomorrow (what country do these people live in, in their heads?). It does calm my companions down, a little, when I explain that all Americans should have at least similar coverage to what we have with BC/BS of Nebr. Even the staunchest Righties among them don’t really argue with that, which surprises me.

    One thing I know for sure– if I had no health insurance at all, I would be in a very sorry state… possibly dead already.

  10. They are openly admitting that the current private health care system is not as efficient nor as desirable as a public system, and that in a match-up, the private system can’t compete in cost or customer satisfaction with medicare-for-all.

    Elsewise, why would they be so sure that we’d all flock to the public system once given the option? Their convoluted plans to “even out the playing field” are an open admission that they know most Americans prefer a public system.

    The politicians know the private system sucks. They know we want a public system. They just don’t care.

  11. NYT: ..It should be possible to design a system in which public and private plans could compete without destroying the private coverage that most Americans have and for the most part want to keep.

    “and for the most part want to keep”? Really? I’d like to see some statistics on that. Even those that have health insurance know it’s a scam. And so many Americans don’t have any experience with any other system, so how would they know about what other choices are available?

    This discussion of trying to satisfy largely incompatible aims reminds me so much of the same uneasy feeling I used to get when trying to design software that also tried to reconcile things that don’t belong together. In software, I inevitably would just start over, and design something new from scratch, realizing that the result of trying to build something around two or more antagonistic purposes is just going to be a collossal mess. I learned to recognize this feeling early on in the design process, and to use it to cut to the heart of the matter – what is the real singular purpose of the project – and forget about trying to reconcile the impossible.

    And so Schumer I feel is blowing a lot of smoke, and he probably doesn’t even know it.

  12. A family of 4 can cover their children on medicaid in my state on 46,000 yrly. that is not low income.

    Is that Medicaid or SCHIP? They aren’t the same program.

    That said, here in New York the state subsidized “low income” insurance costs between $850 to over $1,000 a month for a family, while a private family HMO plan costs between $2,500 and $4,000 a month. That’s higher than the national average, but New York is one of those states that limits the insurance companies’ ability to dump sick patients or refuse to cover people with pre-existing conditions. Insurance is a lot cheaper in places where the insurance companies can refuse to cover people who actually need medical care.

    So how is a family with a $46,000 income supposed to pay for any of that? It’s ridiculous. When I hear someone say oh, people who have insurance don’t want to pay for it, so they drop it and get Medicaid, I think there’s a good chance the cost of insurance was strangling them financially. If they can qualify for Medicaid, I don’t blame them.

  13. I think we’ll have single-payer eventually. Probably not this go-round, but eventually.

    The problem with health insurance is that the whole concept of medical care is simply not suited to the insurance model.

    The whole point of insurance is that the payout trigger should be a high-value low-probability affair. Most people will go their whole lives without losing a house. Many people will go their whole lives without totalling a car. But everybody, almost without exception, will run up huge, GIGANTIC medical bills eventually … even if only at the very end of their lives.

    Huge medical bills may once have been low-probability, but in modern times they are almost a certainty, and that’s only gonna get worse with time.

    Eventually, sooner than later, the medical insurance types will reach a point where it is simply no longer POSSIBLE to make a profit …. they’d have to raise their premiums so much that nobody could afford to have it. The medical version of the back side of the Laffer curve.

    THAT is the point that we’ll get single payer.


  14. Rachel Maddow had a good interview on this, mostly featuring Dr Howard Dean, who begins at around 5:15 in the video. Dean’s points:

    – The issue is whether there will be real reform – which means real choices – or phony, paper reform. Dean opines that a real reform bill will likely come out of the House, but will be much harder in the Senate. He views Schumer’s efforts as a compromise toward getting a bill through the Senate.

    – Private insurance will always be preferred by some. Also private insurance could offer policies above and beyond what the public option would offer, and so it’s not as though private insurers won’t benefit from a public option.

    – Dean agreed that there should be single-payer advocates at the table, in order to have people there who are to the left of Obama. Strategically this obviously makes it easier for Obama to get his plan enacted.

    The first part of the video showcased an ad by Rick Scott, who is a Bush crony, and who is funding “Conservatives For Patients’ Rights” – basically a front group to keep the status quo. What’s so amazing about it, is Scott’s history – he was forced out of his job running the biggest hospital chain in the country, when it was found that they were doing massive Medicare/Medicaid fraud. They were forced to pay $1.7 billion in fines. Scott never went to prison, but got a $10 million golden parachute. As Rachel put it, having Scott as your spokesperson is like having e. coli be the spokesperson against hand washing. It’s amazing that this the best conservatives can come up with.

  15. joanr16 – health insurance has not kept you alive, doctors have.

    Ian’s comment is right on. It’s when health insurance becomes a losing proposition for health insurance providers that one will no longer be able to buy it because there will be no providers.

    Believe it or not, Harry Truman saw universal health care as a natural progression from Roosevelt’s social security program. So how many years has universal health care been on the table, about 60 plus years?

    By now, the insurance industry has become so entrenched as providers of health care – how’s that for strange – and the arguments for keeping them in business have become so tired, so idiotic that there are people who believe that without their magnanimous contribution to our health care, we’d all die prematurally.

  16. Joan, you’re much more than a toaster to me…

    Aw, shucks.

    I really liked that “I can walk away from a new toaster, but I can’t walk away from health care” analogy from last week or so. (And I can’t remember who said it… I’m sorry, wise person!) I guess I got a little carried away with it this morning… the caffeine hadn’t kicked in yet.

    A more useless corporate tool with a “D” next to his name would be hard to find.

    My senator… Ben Nelson. I win!

    I have to agree with those who say that Congress and the administration both know the public wants a single-payer system, but they don’t care. Or they are deep in the pocket of the health-insurance industry. “[So-and-so] For Patients’ Rights”— puhleeze! What an insulting lie– just like the nuke that the Reagan administration named “the Peacemaker.” NOT AS ADVERTISED. I get that feeling about this whole health-care “reform” circus.

  17. I don’t think I’ve mentioned it before, but I’m a US citizen living in Taiwan. I am SO grateful for Taiwan’s National Health Insurance plan. We pay something like US$60/month – a hospital visit costs around $3. I’ve had two major surgeries here, each one costing me around $400 (would have been $60,000 minimum in the States). Waiting time to see a doctor – practically none, usually same day. Waiting time for surgery – typically 3 days, unless it’s an emergency.

    As you can see, Taiwan’s health care is not free, but it’s certainly affordable. If Taiwan can do it, why can’t the USA?

  18. Shumer: The public plan could not be supported by tax revenues or government appropriations but by premiums and co-payments. It would have to maintain reserves, like private insurers, and provide the same minimum benefits as all other insurers in the exchange

    So, his plan is to basically omit the same people omitted by the private “health care” system for many of the same reasons. Fabulous solution, Chuck. BTW, how are you going to spend all those contributions from the “health care” industry association?

    If the public plan simply sets a floor that gives everyone good, basic health insurance at a cost they can afford (perhaps with the premiums on a sliding scale based on ability to pay), there’s no reason they can’t coexist, as moonbat stated so very well. And the public plan is going after people that the private carriers don’t want anyway, so where’s the conflict?

  19. ii get 1236 dollars amonth my grandson gets 200$ per month. neither my grandson or i have any sort oh health ins. although my grandson does have acess to medicaid, thank god . but my wife has nothing , and she is the sickest we are loosing her because she has no insurance. my grandson has been living withus for eight years now and his caretaker , my wife . is dying, because she has no health ins, she could qualify for medicaid if ididn t make so much money off my so called retirement.. can you believe that ?

  20. to Dave S. I am tired and it is late so maybe I am missing Dave’s point.
    ‘And the public plan is going after people that the private carriers don’t want anyway, so where’s the conflict?’ The private carriers don’t want people who cost more than their premiums. Right? If they take all those people they will not only make no profit they will go broke right? So why would the public system do any better? The glorious beauty of single payer is single risk pool. When that is compromised, the costs are prohibitive. EVERYone has to pay, sick, well, young, old, rich, poor. The well become sick, the young; old, the rich; poor. Take them all and it balances out. Separate them and you get disaster.
    Another thing, if everyone would eventually choose government plan, how can we allow them to not even give us the choice?????

  21. Jugheadjack, you have my deepest sympathy. What you’re going through is such a tragedy, and unfortunately it’s becoming a common tragedy.

  22. I believe that good health is one of those inalienable rights we are all supposed to have; and, all Americans should have health care that is equal to all other Americans. It is the inequity of our health care system that irritates me the most. Exampe: Sometime in 1999 and 2000, I was living and working in the Washington, DC metropolitan area. At the same time, Michael Jordan was playing for the Washington Wizards. On the very same day, we both injured one of our knees. Michael Jordan had x-rays, mri’s, surgery, rehabilitation, and was back on the basketball court playing while I was still trying to get approval for an mri. I mentioned this to one of my doctors (a very young man) and he replied, “Well, of course, he has 32 million dollars.” In the end, I had to change health care providers to get my knee fixed. I didn’t expect to have my knee put together so well that I could play basketball; but, I did think everything regarding my recovery should have moved a wee bit faster than it did and that I should be able to get around as I did before the injury. I walked for months on a very injured knee before I could get an mri, which was required before a decision on surgery was made. It made the injury worse and was very painful; but, I could not afford to be off work during that time period. When something is unequal, it is dicriminatory.

    Also, I have no sympathy whatsoever for the insurance companies. They are the reason why healthcare is so expensive. I like the idea of getting rid of the health care insurance business totally. Insurance companies can make money other ways. However, American doctors believe they are owed a summer house, cars for every member of the family, golf club memberships, etc.; and, couldn’t have that without insurance companies. We don’t have many people becoming doctors for altuistic reasons, mostly for money. Until about the last 15 years ago when sports stars became so high paid, some specialty doctors (e.g., ob/gyn) were the highest paid professionals in this country.

  23. Felicity – in fact, doctors, hospitals, neurosurgeons, anesthesiologists (sp), nurses, etc., all have kept me alive. Of course, someone had to pay them. I suppose without health insurance I might be alive, but I’d definitely be bankrupt. The reason I’m neither is I had health insurance to pay most (in 1999, nearly all) of my medical expenses.

    All I’m saying is even people without brain tumors or a family history full of cancer and heart disease can’t just afford to pay what the market will bear. I agree that health insurers are standing between us and a system that works. I won’t miss them when they go, but I’m being realistic– I couldn’t and can’t pay out-of-pocket for the medical care that keeps me going. Almost no one can. If we could, we wouldn’t be having this discussion. If we all have single-payer care that equates to my 1999 insurance, minus the bean-counting “murder by spreadsheet,” life in this country will be much more fair, and healthy.

  24. This is going to be an interesting thing, actually.

    If the government just took anyone who had no other way to get health insurance, insurance companies would dump all their expensive patients (or all that they could) onto the government.

    If the government mandated coverage for all (i.e., set a price based upon certain fair criteria, cover any and everyone for that price), then the government as competition shouldn’t be needed.

  25. diedinthewool: to Dave S. I am tired and it is late so maybe I am missing Dave’s point.

    No, I think you got my point beautifully. But I’m still trying to wrap my head around the implications of single payer (I can be quite thick at times) and your comment made a lot of sense, thank you.

  26. “We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

  27. I hate my private insurance. These companies are pirates, robbing us blind. It is not reform without a public plan that brings the health insurance companies out of their monopoly. Without a public option the best thing is simply a law that bars underwriting and limits the price gouging. Then make providers accept all plans. Or do that with the public plan too, even better. But we will be lucky if only congress doesn’t screw the whole thing up so much that it is all worse than ever.

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