Is this healthcare or politics?

If you would have asked me just a few months ago if the healthcare system in this country needed fixing, my immediate answer would have been, “hell yes.” Like most Americans, I hated high deductibles, costly procedures, tiresome claims, ambiguous benefits, dysfunctional emergency rooms, etc, etc. Unlike most Americans, I had a chronic condition, so for me the madness was amplified. But now there is a president and congress committed to helping. So why am I not excited?

I guess, without much thought to detail, that I am like the protestors. I have been to the local DMV, post office, county court, and city hall, and I have seen the black hole of institutional dysfunction. The local ER is pretty bad, but compared to the local Social Security office, it is Nordstrom’s. But if the government cannot help, then who can? Can we make things better or is this as good as it gets? I figured instead of starting a new wave of protests, I would learn a little more.

What I learned is that people are living longer and more healthcare dependent lives. Remedies have become more profitable than cures. For these reasons demand for healthcare is up. The costs to practice medicine are rising as well, because of litigious risks and advanced research. The high demand and high costs make healthcare less affordable. And to make things worse, fewer businesses and people are paying into the system.

This is not to say the system is completely broken. Most Americans have health coverage. I am insured through a former employer and quite sick, but I am covered for all doctor visits, operations and medications. My premium and out of pocket expenses are over $500 per month, which is inconvenient and expensive, but not impossible if you adjust your lifestyle. Those who cannot adjust their lifestyle because of severe income restraints might qualify for Medicare or Medicaid. Others are given exceptions for treatment, but these exceptions cost everyone. A small percentage is refused treatment altogether.

The president, like everybody else, wants to improve this situation. He first proposed a co-op insurance with which everyone could choose either a private or governmental plan. Then he scrapped this controversial plan once opposition grew to the idea. Political rivals and protestors argued that any universal coverage would cause rationing. Many argue still that government intervention into healthcare will create bureaucratic inefficiencies, and further bankrupt the country via more debt, taxes, or both. In the House now there is a $900 billion bill with a public option ^[1] awaiting revision. The details of the bill seem not just ambiguous to Americans, but to Congress as well.

If you take away the politics, the real argument against government intervention is that free market solutions are better than social ones. However, this is not always true, even within classroom macro-economic theory. For instance, infrastructure like roads and bridges do not thrive on supply and demand because no one person or group of people would pay for an entire interstate. The free market model also fails where competition is inherently infeasible, or where ethical provisions are elusive. Healthcare has some of these characteristics.

So would healthcare do better in the hands of the government? It depends if providers and insurance companies can reconcile some of these shortcomings in the free market. Can they do business with a quasi- benevolent mission, while government helps create a more competitive market? If they can then less government intervention would succeed, based on the fact that free market solutions are directly driven by demand and competition, and hence reflect higher quality, lower prices, etc. Therefore, the challenges and solutions of a successful healthcare system lie more within business trends and businesses plans than the politics of the day.

Many experts agree that improving healthcare is a business problem, and subsequently set out to benchmark other countries’ healthcare systems, much like how Ford would look at Toyota’s business model to make better cars. And while it is true other developed countries in Europe provide free and quality healthcare, those same countries are much smaller, have different cultures, and have flawed systems in their own right. Think about it. A smaller population encounters less inefficiencies and obstacles in running a social system, and is more economically homogeneous, meaning everyone pays in to a system at about the same rate. In regards to culture, we value prosperity more than community in the United States. That is not to say we don’t value community. We would just rather take care of ourselves first and our neighbors second, and not the other way around. This culture has its merits. It is what has made us so innovative and diverse in the past two centuries. And because we have a culture of prosperity, it makes it harder to turn out qualified doctors on modest salaries, and less acceptable to impose the taxes to do so.

I think the most important thing to do, which they probably haven’t done, is to first identify the fundamentals for successful healthcare, and build from there. Basic ethical decency and pragmatism are not enemies here. Ultimately we need other Americans to receive healthcare. That way we are safer from infectious disease, and have healthier contributions to society. Therefore, everyone should be covered for exams and second opinions, everyone should be covered for critical care such as congenital disease, disabilities, and corresponding medication, and everyone should be covered for emergency care.

However, most should have to pay for coverage and treatment a reasonable amount based on their income and demand. This way the system is well funded by many, for those who are sick, without bankrupting anybody. For instance, if you make $4,000 per month, you should have to pay for healthcare, but not more than $500 per month, including your premium. If you make more, your limit should be more, and if you make less, your limit should be less. This way, if you are sick then you will sacrifice but not go under. And if you are impoverished then you will get care if care is needed. But if you are healthy then these limits are not effectuated, and an affordable premium is your only obligation.

After we establish the basics, then we can return to the argument of what kind of system can best facilitate these basics. Government run or regulated healthcare could basically charge a premium in the form of taxes to assure that all Americans at different income levels pay into the system at an appropriate rate. However, our current bureaucracies have proven that a government run or regulated system would produce more forms and protocols than we have now. Remember DMV? The public option set forth in recent proposals is tricky too. If it is any good, it will drive private insurers out of business and lead to universal healthcare. If it is not any good, then…it is not any good.

Instead of the government running or funding healthcare, maybe the best way to improve healthcare is for companies and providers, for their own survival, to implement extensive coverage with reasonable limits. The government can encourage this by providing tax breaks and grants to those institutions that create competition and follow some of the basics we identified above. Government could oblige companies and private citizens who can afford insurance to pay for it. For example, they could deny businesses of any size a tax ID or incorporation if the business did not offer private health insurance to its employees. Or, similar to car insurance or homeowners insurance, the government could restrict individuals from getting their license or buying a home if they did not have private health insurance.

Whatever the solution, everyone needs to change their attitude. Healthcare will never be perfect. The true nature of the problem is too daunting. But healthcare in this country can improve without bankrupting the country if cooler heads prevail. Let us hope they do before we pass a bill contaminated by politics that no one understands.