Monday, August 24, 2009
For sake of argument, stick to the facts
By Winthrop Quigley
Of the Journal
If the nation is to have any hope of a reasonable debate about health policy, people on both ends of the political spectrum would do well to renounce some cherished myths about health care not only in the United States but in the rest of the world.
Policies based on reality really should work better.
There is a case to be made that commercial insurance has no place in health care. There is a case to be made that government has no place in health care. It is simply not factual to claim insurance company profits are the cause of health care inflation. It is no more factual to claim, as Investor's Business Daily did in a recent editorial, that world-renowned physicist Stephen Hawking would have been allowed to die by the British national health system because, as a victim of Lou Gehrig's Disease, rationing would have prevented his care – an absurd claim, given that Hawking is a British subject who lives and works in England and who just last spring survived a serious respiratory infection in a British hospital.
There are so many misconceptions it is impossible to fix them all, but here is a modest attempt:
•Â National government involvement in health care finance and delivery is no more proof of socialism than is government construction of freeways. Britain's Conservative Prime Minister Margaret Thatcher privatized all kinds of government-controlled industries, from coal mines to airports, ushering in what her fans regard as a resurgence of free enterprise and prosperity in the United Kingdom. She didn't touch the national health system, and even said the system was safe in the Conservative Party's hands.
The United States government runs a large national health system, an example of which is at Gibson and San Mateo SE in Albuquerque. It's called the VA hospital.
Conservative Party prime ministers have governed Canada for half of the past 30 years. None has thought to dismantle Canada's single payer system, whereby provinces, with national government support, pay the medical bills citizens incur during visits with private physicians and hospitals.
The United States has a large single payer system, too. It's called Medicare.
•Â Rationing is a feature of every health system. Indeed, it is a feature of every economic transaction.
As Princeton University health economist Uwe Reinhardt said, prices are the mechanism of choice in a free-market economy to ration scarce goods and services. Those who are willing to pay get, those who aren't don't.
Since all goods and services are scarce, including health care, the difference among systems is how they ration, not whether they ration. In the United States people without enough money don't get the care that people with money get. In single payer systems, including Medicare and Canada's system, when tax collections are inadequate, appropriations to pay for care are reduced, and medical providers get paid less.
•Â Americans without health insurance do not get adequate care by visiting the emergency room. The law requires emergency rooms to determine if a patient is in near-term danger of death or serious injury. Then they treat the emergent condition. They are not required to cure disease.
If an uninsured person shows up at an emergency room with late-stage cancer, the emergency room will determine whether that patient is in imminent danger of dying, but it is not going to start a round of chemotherapy to fix the cancer. A patient who arrives in a coma because of untreated diabetes will be treated for the coma. An uninsured diabetic in the process of going blind will not be treated for retinopathy.
•Â Insurance companies cause their share of hurt, but it's not because of their earnings. Aetna, Cigna and UnitedHealth make between 3 and 4 percent profit margins. Locally, insurers make about 2 percent. That just isn't that much. Microsoft's profit margin is 25 percent. Coca Cola's is 20 percent. Procter & Gamble's is 17 percent.
The major component of health care spending is payroll, most of it for doctors, nurses and other medical providers. Spending on drugs and medical equipment takes a big piece. Waste, fraud and inefficiency take another big piece. Medical malpractice lawsuits, defensive medicine and liability insurance together account for only about 1 percent of spending.
Former British Member of Parliament Tony Benn said last week in an interview with Democracy Now that Britain established its national health service in 1948 because a healthy population is in the national interest and the health service achieved that goal at an acceptable cost. The American system of employer-based insurance evolved from World War II-era wage and price controls. It was never consciously constructed to achieve anything other than a richer benefit package for employees. Where it is today happened by chance, not design.
Congress and the president have handed us a chance to talk about what kind of health system serves the national interest. Let's not lose the opportunity by hiding from the facts behind comforting and nonsensical mythologies.