On the Contrary

Did you ever wonder what it would be like if healthcare was not a concern in your life?  That is the way it works for most of the rest of the industrialized world.  They pay a lot less than we do and they have better outcomes and this is from just about any study you look at.  Medical expenses are the leading cause for personal bankruptcies.  So comes the push for revamping healthcare and universal care.  But the first thing you hear is we can’t afford universal care.  Oh really?  We have universal care by default and we end up treating people who can’t afford treatment when it is the most expensive time to treat them, at end of life.  In other words we already pay for it and by delaying payment until these people are truly sick, it is many times more expensive than it has to be.

It has been estimated by most studies that the United States pays about 25%-35% more than most other countries and this cost is the result of administration costs of private insurers.  This number compares favorably with the lower costs of Medicare which, like these other country’s systems, is a single payer system.  So with all this data, why don’t we move to a single payer system?

Well there are three reinforcing factors.  First is the mantra of most Republicans that most of us unthinkingly accept and that is that anything government does, they do poorly.  Said another way, be afraid, socialized medicine.  We have seen this attitude in the GM bankruptcy.  The government has now a 60% ownership share of GM, yet the President disavows any government intervention in running GM.  This is a funny attitude considering that it was under private stockholder ownership and CEO leadership that ran this company into the ground.  Republicans have a new talking point about healthcare that says you don’t want the government between you and your doctor, a reflection of this fear the government attitude.  But right now the person you have between you and your doctor is a high six-figure health insurance company executive who needs to maximize profits for his company.  Which one do you think has your best interests at heart?

The second factor is the idea that in a single payer system we lose the key attribute of competition to keep prices down and service up.  But where this single payer system is most effective they have both by allowing their governments to fund the system through taxes, and the providers to be private firms/doctors vying for both your business and the government’s funding (Public funding/Private providers).  Think about a really well run HMO like Kaiser Permanente of Northern California.  You contract with them for a fixed price and they provide care. Administration costs are minimal because they don’t itemize your billing (count number of tissues you sneezed into) and they don’t spend administrative dollars to deny care (except in experimental medicine and that is going to be a problem where ever you turn).  You get aggregated with every one else and you pay a flat rate.  They then have a motivation to reduce their costs by keeping you healthy through preventative care and reducing their cost of providing services through streamlining care. If you don’t like your doctor or the care/service you were given, you are free to find another provider.  Nothing changes except who pays the bills and that really doesn’t change (you still do) except that you took the middle man (insurance companies) out of the process.  It could be argued that the present system of providing healthcare incentivizes high costs because the more a doctor does, the more he is paid by the insurance companies.  In the world of lawyering this is called billable hours.  The more billable hours you have, the more you make.  Our present system (outside of HMO’s) incentivizes doing too many procedures.

So why is this so hard?  Because in the final analysis, the third factor preventing reform is that there is a lot of money at stake.  Health insurance companies make very nice profits and they have bought and paid for our Congress.  Try to remember that all this money flowing around controlling our future could more than cover the costs of a single payer system.  We all pay for this, but somehow since it is hidden in taxes we pay the government, insurance premiums to insurance companies, and the increased cost of our goods and services because we load these costs on our employers, we don’t really understand the high cost we are paying.

The system we are looking for is one in which the motivation is based on excellent service, lowest cost, and preventative medicine available to all our citizens.  The reality is that the system we have now is just the opposite.  We don’t practice preventative medicine for those who are only minimally covered or have no coverage at all.  This saves money for the insurance companies, but hits both our own insurance costs and taxes when these people become seriously sick and must be treated and these costs are passed along to us.

I guess the final argument for the single payer system is that Republicans are adamantly opposed to it because if it is included in any health care plan that comes out of the administration, they feel it will be grossly unfair to the insurance companies.  I find this argument counter intuitive from the folks who think competition is the ultimate goal.  Being afraid that insurance companies cannot compete with a single payer system should tell you all you want to know about insurance companies.

So get rid of the private insurers, move to a single payer system, put the incentives in place to provide quality care, preventative medicine, and more efficient billing and medical record systems.  It is the only way we are going to get a handle on these growing costs.  If you are concerned about the cost, then implement some basic form of health care covered by the government with private insurance to cover any add-ons like dental or eye care.  We could start out cheap and then later catch up with the rest of the world later as we lose our fear of this system.

There are three things (other than torture, See Securely in the Bubble) that I think President Obama must wade into if he really wants to set a new moral and ethical tone for this nation.  President Obama has set out goals for change in America, but he has been hesitant to take a stand on the specifics of these programs.  A case in point is the Stimulus Package where he would say that out of political necessity, he let Congress fill in the details.  Sadly allowing Congress to shape this plan watered it down with way too many tax cuts instead of real spending on infrastructure and he ended up with zero Republican votes.  One could argue that this is the only way you can make things happen in Washington, but if political expediency gets you a watered down version of change, is it really change?

Sooner or later President Obama has to draw a line in the sand and we are all waiting eagerly for him to do it.  It is sad to say, but true, that he could take a lesson from his predecessor, President Bush.  President Bush was not afraid to say exactly what he wanted done and then he got Congress through his bullying to go along.  Sadly on most of this stuff he was wrong, but the lesson on getting things done should be evident.  There are three issues on President Obama’s plate that if he does not take a stand, he will fail us morally and ethically.  They are health care, equal rights for gays and lesbians, and government administration of student loans.  Each is a no-brainer yet each is adrift in Congress in a sea of special interests.

First let’s take health care.  Can anyone believe that we are discussing a revamping of health care and no one who supports a single payer system has been allowed at the table to present that option?  This is morally and ethically depraved.  I will not rehash why the only way forward is a single payer system (See Health Care Wars and Scare Tactics and Reinventing the Wheel – Universal Health Care)), but to allow a Congress that is bought and paid for by the health insurance companies to stymie real change is only another futile game of kick the can down the road.  So where is your moral courage Mr. President?  Where is your demand that whatever comes to your desk will have a single payer option in it?  Sixty percent of our citizens, doctors, nurses, and other health care providers want to see a single payer option so where is your outrage?  If Congress is left to their own means, health care insurers will be protected and history will look back on this as another failed attempt to get serious about change.

Then there are the gay and lesbian issues.  Say what you want Mr. President, this issue boils down to equal rights for all our citizens.  Good, brave Americans are being kicked out of the military because of the misguided Clinton compromise of don’t ask-don’t tell.  Lives are being seriously disrupted and damaged and you could prevent this, and yet you do nothing even though you promised to protect these people.  Is it not time you looked the military in the eye and said grow up?  On the marriage issue, we have this idea that states should decide who can marry whom.  We had this same problem in the civil-rights era and finally the federal government had to standup for the rights of our black citizens when states used the “states rights” argument to deprive many of our citizens of their rights.  When are you finally going to stand up for the rights of our gay and lesbian citizens?  While you dither with what is the most politically expedient thing to do and pacify the generals, real people are being seriously hurt.  People have a right to their religious beliefs, but these beliefs cannot be used to deny others their rights.  It is time you took a stand.  You could issue an executive oder delaying any further actions against gays in the military until you can get the appropriate Congressional action.  All it takes is a little courage.  You don’t have to be reasonable.  Simply look the nation in the eye and say this is wrong and I am ending it.

Finally there is the issue of student loans that have been administered by the private sector (banks) where the government guarantees the loans, buys the loans back, takes all the risk, and the banks have been raking in a fortune in fees.  These fees, in the billions of dollars, could have been turned into thousands of additional aid for students to go to college.  Talk about corporate welfare.  So this no-brainer screams for the government to deal out the loans directly, save the money in fees and put thousands of deserving kids into college instead of corporate welfare for the banks.  President Obama has taken a sort-of stand on this one, but the banking lobby is once again doing its work in Congress and this may also be stymied.  So Mr. President why don’t you stand up and shame the banks?  Point out that they are stealing from our kids and their future?  Is it inconvenient during saving the banks with massive bail outs to force a little tough love?  Most of us would welcome it.

Bottom line Mr. President is that we elected someone to lead.  We know Congress is bought and paid for and they need adult supervision.  So when is it you are finally going to give us some instead of some halfway measure that gets us nowhere?  It is time to take the reins.  It is time to be the leader we voted for.

So if we are so stupid, Mr. Smarty Pants, what are your answers?  I am so glad you asked, because as I have said before, the answers are easy, implementing them will be the bitch.  They will be a bitch because there are so many vested interests that will lose when the status quo is upset.  Nobody likes change and the unknown.  In the future we will all gain, but it is the shortsighted pocketbook mentality that drives a nation of stupid people.  That would be ours right now.  So for what it is worth, here are the solutions.  Note, I didn’t say my solutions.  These are the solutions and they as obvious as the nose on your face.  But they will require self-discipline, pain, and sacrifice in the short term, which is something this nation has been sorely lacking in:

Energy and Global Warming – T. Boone Pickens gets it.  We can quibble about whether we move to natural gas or electric for our trucks (and he does have a point here), but overall the message is simple.  We need a massive investment in alternative energy NOW.  We also need massive investments and streamlining of the regulatory process for nuclear energy.  This is not some energy credits that will allow the marketplace to work its wonder in 20 years or so.  This is a massive government investment to get there as soon as possible.  Price of gasoline needs to be stabilized at between $4 to $5 per gallon with the excess funneled into this program.  Every day we wait and quibble about drilling or pumping the National Strategic Petroleum Reserve are days we further our own demise.

Healthcare – Single payer system.  What is so hard about that?  Say it slowly.  It does not mean doctors work for the government (in England they do, in Japan they do not).  It does not mean you have to be screened before you see a specialist (some countries do, others don’t).  It can mean whatever we what it too, but we need to take profit out of denying people health care.  It won’t cure the problem of rising healthcare costs, but it will reduce it by at least 30% as we take the private for profit boys out of the loop.  If  healthcare is a moral obligation, this is the only way to get there.  I hate to break to those that thinks government is most inefficient way to provide healthcare, but Medicare is the cheapest system for administration in the United States (5% versus 30% or more for private insurers).

Taxes – Everybody has to pay their fair share.  That means businesses too.  We need to realign taxes so we can actually say that.  We have to make massive investments in our future (R&D, education, infrastructure, etc.).  Taxes are not going to get less but they can be spread so that businesses do not get a free ride on the backs of middle America who are losing ground on their life style.  Here is an idea that will never float:  Value Added Tax.  We only pay taxes on what we spend.  If we consume more, we get taxed more.  You don’t want to pay taxes, don’t buy anything.  Income tax and record keeping would be a thing of the past.  Maybe it won’t work, but let’s have a real discussion without the vested interests fighting to maintain their protected positions.

Economy – Clearly we can’t continue cutting taxes, especially when 2/3 of all business don’t pay any according to a GAO study.  It is not stimulating our economy.  What will stimulate it are jobs with people with spending money to buy things, preferably things produced here.  That would require two things, a hard look at our trade agreements to make sure they give us a level playing field; don’t penalize our producers for paying minimum wage or complying with environmental regulations.  And the second would be a massive investment program by the government in alternate energy and infrastructure.  You heard me right,  spend to earn.   There are some really good studies out there on just what kind of a balanced spending plan would help the most, but I have to tell you, cutting taxes is on the bottom of every list.

Education – We need a national curriculum and a national test.  Local school board’s ability to water down educational requirements and teach junk science that suits their religious purposes is hurting the most important resource we have, human capital.  Advanced education has to be available to all who can qualify which means a whole lot more funding of higher education institutions.  Four years of college at a state university should be free.  We should be tailoring our aid to students in career fields that will help our country in the future (e.g. engineering, math, and science).  Everyone should have a liberal education including basic classics, art, and music.  The truly great thoughts are captured in great literature.

Military and Foreign Affairs – The Georgia thing should have a focusing effect, but Americans are so easily frightened that the focus may be on the wrong thing.  John McMean comes out with a bellicose in your face approach to Russia which is what we did for the last 50 years, and he is characterized as showing his experience in foreign affairs.  The reality is that the French and the European Union have been trying to negotiate something while we are truly toothless following the John McMean politics of yesteryear.  John McMean’s approach to foreign affairs is a strong military.  It doesn’t work.  The best military in the world is the one you don’t have to use.  Times are a changing and we need to work with nations to resolve problems.  John McMean’s approach is to fight the problem with the problem, nationalism.  Armed conflicts are not going to solve the problem and will only bankrupt us.  The bottom line here is that we can scale back our military spending, especially on those high tech toys.  We have to engage other nations and only use our military for effect.  We have to look at places like Iraq and Afghanistan and wonder if that is where we want to use all our resources.  We have to look at Russia and think about what they have to lose with their power play.  Right now everybody is knee jerking to politics of old.  I think the Russians, if they continue this kind of behavior may find themselves way over extended and bogged down in local politics.  Anybody remember the Soviet occupation of Afghanistan?

So what we need is a new direction.  But when people are afraid they like to revert to what they know.  The trouble is what they know is failing them and it is becoming blatantly obvious.  Will they let go and try a new approach?  Only if America wants to be a power and a leader again.  Otherwise we can continue to pick leaders who offer us yesterday’s solution and we can continue to decline.  It’s up to you.

Since the media won’t start focusing on issues that really matter, I thought I would tackle one a week for a while and see if it sparks any discussion.  Here is a question for you: How much of an American new car price is health insurance for the employees?  It has been estimated that the average price per car is $1500.  Any wonder why healthcare is a cost that makes our businesses less competitive than their counterparts around the world?

I was at a dinner the other night and over a nice Petite Syrah I said that health care is the sleeping dog that is the real issue in the next election and one of the most important issues to the common voter.  This was an important issue to my host who had recently been successfully treated for cancer and once he looses his firm’s (which he is part owner) health insurance after he retires, he is uninsurable.  I asked him what he planned to do and he said he would work until Medicare covered him.  It was his only option.  I pointed out that we had one of the worst healthcare systems in the civilized world.  He strongly disagreed with me on that point.  It turned out that like most disagreements, it was over semantics.

I argued that studies showed that our health care costs on the average at least 30% more than in any other industrialized country.  The U.S. spends more on medical care any other nation, averaging $7000 per person, yet our infant mortality rate, maternal mortality rate, and life expectancy is rated one of the worst in the industrialized world.  As Nickols Kristof pointed out in his editorial Monday morning in the New York Times, “If we had as good a child mortality rate as France, Germany and Italy, we would save 12,000 children a year.  An American mother has almost three times the risk of losing a child as a mother in the Czech Republic.  According to a new report from Save the Children, a woman in the U.S. has a 1-in-71 chance of losing a child before his or her fifth birthday.  Given this argument I challenged my host on how he could disagree with me.  He said, “Oh you misunderstand me.  By best I mean we have the best technology in the world, and the best care, if you can afford it.”

And this is the crux of the issue.  We can’t afford it, not just the poor, but more and more of middle America every day.  We are one of the only nations that do not provide universal health care and we require employers to fund our coverage.  It’s a double whammy.  First we have a large and growing uninsured population and second we keep hanging these costs on businesses that, in a highly competitive global market, could put them out of business.  Add to that the extremely high cost of medical insurance caused by the “competitive” insurance companies burying you in paperwork so they don’t have to pay your claim and you understand that our medical care system is rapidly crumbling.  Clearly big changes are coming and here are our choices:
The existing system is made up of “competing” insurance companies that in theory fight with each other to gain a market share by providing the lowest premiums while presenting you with comprehensive health care.  So much for theory: The reality is that the insurance companies compete to cherry pick enrollees that do not have major medical problems , reducing costs and maximizing profits.  Their overhead at reviewing claims and doing their best to deny them is what has driven our system to be one of the most expensive in the world.  The bureaucracy and paperwork is driving doctors out of business and the cost to administrate these programs through the roof.  So the status quo is no longer tolerable.

There are two other options, both with a goal of reaching universal coverage, but the first one leaves the well connected insurance companies in place and the other one that does away with them.  First things first:  The first approach basically differs only in who they initially cover and the plan basically requires all insurance companies to cover all comers more or less.  They fund this usually by charging employers, workers, hospitals, shifting some to other existing programs, and doctors.  Usually everyone is required to carry health insurance.  They differ in who gets charged how much, limits put on insurance company amounts that can go to administration, and varying requirements on who insurance companies can refuse (means you pick up the bill in tax payments).  My problem with this approach is that it doesn’t solve the problem.  For profit medical care has been a disaster and is getting worse.  What it does solve is getting more people covered in the short term without an all out war with the insurance companies.  It still puts the burden of employee healthcare on business and does not address how we reduce the administrative burden on doctors.

The other approach is the single payer system, usually the government.  In this system we establish a fair tax system and health care is paid for by the government.  Before you go running screaming “Socialized Medicine! Socialized Medicine!” exactly what do you think Medicare is?  Many Americans are now traveling to foreign countries to have surgeries because they are cheaper there and even though they don’t have the profit motive, most survive.  Of course it does away with the insurance companies or in another scenario, the government can contract out the single payer to keep them efficient according to the capitalist theory of efficiency.  This has not worked well for almost all government services that have been contracted out and I would think expanding Medicare would probably be a good model since their costs are at least 30% less than the insurance industry in managing health care payments.   For my money this is the only way to go.  The rest of the civilized world has figured this out and for their money they get better care.  So who is going to propose it?

Don’t hold your breath.  The insurance industry has big pockets (because they are making tons of money and it will be their ox that is gored) and politicians do not say the obvious because it will hurt their campaign contributions until there is no other choice.  So in the meantime watch which candidate provides a plan that leans toward covering all children, with universal care a goal, and focuses on reducing administration costs by covering all comers and promoting preventive medicine.  It will take another 20 years before that system collapses and we face the reality of a single payer system.  In our system we believe that all people have a right to life, liberty, and the pursuit of happiness.  If your health is a function of your pocket book then all three are in jeopardy.