Health Services – Capitulating Out The Gate

In the news today is that “The Republicans Have A Health Care Plan!”.

The problem is that it capitulates right out the gate. It is rightly, as Rand Paul calls it, “Obamacare Lite”.

The essential structure of Obamacare is kept, along with mandates and penalties, but gets tinkered around the edges with the dropping of some specific rules and having the penalty from the mandate be paid to the insurance companies rather than the government.

OK, “the question not asked”: Why in heck is the provision of Health Services (it isn’t “care”… it is a service provided by people paid wages) a U.S. Federal responsibility? Where is that in the Constitution?

IMHO, the only correct thing for the Federal government to do is to declare that Health Insurance Companies can sell in any State, doing business as they wish, and with each State having whatever the State government wants in terms of regulations, State provision, Subsidy, etc.

Wash the Federal Government hands of it and walk away.

The Federal Government does not provide my lawn mowing services, my car washing services, my car repair services, my home insurance, my auto insurance, my food services. It just is not their job to be a national service provider.

The Peculiar Problems Of Health Services

There are a few particular and peculiar aspects of Health Services that causes much of the “problem” in providing them. These issues lead to unequal distribution of outcomes and needs along with unequal access to services. They do need some kind of fix, but that “fix” is at core a welfare program. Money must be taken from one person (or company) and given to another for services that the Money-Bags does not get.

Most of the fight is over who is the Money-Bags and who gets the money.

The largest consumers of Health Services are those who are old, nearing the End Of Life (EOL), those with chronic (pre-existing) conditions, and those who suffer unexpected and catastrophic injury or illness (think car wreck or onset of ALS.

Of those three classes, two are very predictable. Old Age and Existing conditions. Insurance is NOT about paying for what is predictable, it is about paying for what is an individual surprise (but predictable on a statistical basis for a population). What is not insurance, is welfare. Transfer payments from the Money-Bags to the Money-Sinks.

To ignore that is to get the kind of crap that is Obamacare.

One example: I’ve been in an Ambulance once. My Mother-In-Law had not been in one at all by my age, that I know of. When she reached about 75, the Ambulance rides started. At least a dozen. Each followed by one or more days in the hospital. Sometimes intensive care, always the Emergency Room. That is a fairly typical Health Services consumption profile. Very little for the first 90% of life, a huge amount as EOL approaches.

Similarly, folks with Diabetes have a fairly clear health serviced consumption profile. “Prognosis” if you will. Ditto Cancer patients.

So what Obamacare does is force the young and healthy to buy incredibly expensive “insurance” that they do not need in order to fleece them for the money to provide welfare health services to those with EOL and Preexisting Conditions high expenditures. That isn’t insurance, that is welfare. It then layers on all sorts of stupid penalties, fees, whatever if you don’t “voluntarily” submit. Governments are not for the purpose of coercion of the voter, IMHO.

IF you want a Medical Services Welfare Program, go ahead and set it up and use general fund taxes to pay for it. Much of anything else is just a lie. Lies don’t work well in the long run.

Additional problems:

There is no limit on how much a person will spend for medical procedures when they are paid for by someone else. It can cost tens of thousands of dollars to add a day or two to an ending life. Few folks will voluntarily say no to more life. Similarly, the technology of “fixing things” pushes forward faster than the ability to pay for those fixes. We can now replace almost all the bones of the body. Synthetic organs are being developed. Total cost to repair someone as they wear out can exceed their lifetime ability to create. When that happens on a population basis, the nation goes bankrupt.

Letting the AMA practice Occupational Birth Control on the number of medical doctors is just a monopoly by a trade union. Build as many medical schools as can be filled with students and the cost of medical care WILL drop. There are many times more bright and gifted students who would make great doctors than there are medical school slots for them.

Letting malpractice lawyers game the system as an ersatz form of welfare / wealth redistribution is just crazy. It makes for many rich lawyers, some compensation for actual injuries, and astounding increases in medical costs. At one point I knew an anesthesiologist who had malpractice insurance costs equal to about 1/2 his annual pay. He was good at his job. But some folks DO die or have failures under anesthesia. The simple fact is that medicine is NOT a perfect technology. Instead of recognizing this and having each person accept their risks like adults, we have set up a system to “compensate” them in some kind of “social justice” way, while making lawyers rich in the process. Get that out of the system and costs will drop by about 1/2. IF you want such an injury compensation system, set one up but without the lawyers cut. Set standard payments for typical known bad outcomes and cut the checks. It would save all the legal costs AND eliminate the randomness of Lawyer Roulette for the injured parties.

Over the years, the billing practices at hospitals has evolved to “3rd Party” the costs from those who did not have enough money to those with private health insurance. This was another kind of back door welfare program, and it is why a “small tray” for the ER that ought to cost about $10 runs closer to $100 last I looked. (some minor bandages, scissors and tape and such). I worked in Patient Accounting for a couple of years, so got to see it up close. Medicare doesn’t pay enough? They pay $50 for “FOO” and you charge the private health insurance $150 to “make up the difference”. Simple fix: Mandate that ALL parties pay the same price for a service. A billing code has ONE price at any one facility. Private insurance costs will plummet and the true cost of welfare will be visible, and can be planned for properly.

Insurance companies try to dump anyone who costs too much (as do employers, BTW, so if you have a spouse with high medical costs and that raises the insurance rates, the employer knows and will try to remove that cost…) Now you have a choice. Let them not cover preexisting conditions and have lower insurance costs, or require that they take all applicants regardless of medical status and have higher insurance costs. Doing it 1/2 way like in Obamacare Lite is just silly. Force coverage for preexisting most of the time, but have a penalty if the insurance lapses? Punishes people who are ill, does NOT reduce costs (since they still get treatment and most folks will stay covered), adds red tape. Sigh. Either admit you are going to provide a welfare transfer payment to those folks, or leave them exposed to lack of treatment and / or high expenses.

The alternative is what is called “Adverse Selection”. Almost everyone with lots of expensive service demands will sign up for the “reduce my costs” welfare “insurance”, while those who don’t need it will buy none, paying out of pocket being cheaper, or go to a different provider if available (even if insurance companies are forbidden from offering lower cost plans to the healthy, Doctors can make pre-paid medical service contracts and select for the healthier clients). This eventually loads up the “insurance” with lots of excess costs and the company goes out of business (or leaves that market). To avoid Adverse Selection, you must either have some kind of preexisting condition exclusion or a clear Welfare provision. Trying to dodge that issue is what causes most of the mess in the present systems.

It is all about who pays and who gets treatment. The “Single Payer” approach says anyone in the tax rake pays and everyone gets treatment. The Free Market says everyone pays their own way for what they can afford. Real insurance says everyone pays according to their average statistical risk, and gets what is the usual payment for that expected risk if it hits them; everything else is excluded. Welfare says “soak somebody to pay the unfortunate”. Trying to mix those into one “system” is what creates chaos.

In Conclusion

I’ve lived under each of the major systems for some part of my life. The first few decades were “pay as you go” with no Medicare / Medicaid and few folks buying private health insurance. The local doctors had an office in the first floor of their home and lived upstairs. It worked reasonably well. “Indigents” got “free” medical care at the County Hospital. Some folks just did without medical services. Some folks paid for lots of stuff they didn’t need but wanted (rather like now…).

The major issue was folks at EOL running out of money and going bankrupt due to their unwillingness to say “I’m going to die in a year anyway, just let me go”. So we’ve instituted Medicare. The idea being to unburden the EOL folks from that worry.

Then we instituted Medicaid for the same reason for folks with chronic / surprise medical problems beyond their means.

That just left the folks who were a little moneyed, but not moneyed enough, hitting the wall (and paying the bills). As Medicare and Medicaid cut back how much they would pay for procedures (and the odd failure to pay) more of the costs got “3rd Partied” onto those with Private Insurance. I was working in Patient Accounting watching that happen. Private insurance costs began to rocket up.

Now we have Obamacare. The purpose of it was to force more healthy folks to pay into the Welfare System of Services while making it easier for those who wanted services to get them without paying (much). It also tried some ill advised Social Manipulation via things like mandating nuns get birth control coverage and pay for abortions. It is now in freefall due to the massive increase in costs to the system from all those folks with preexisting conditions and whatever getting welfare payments (as bill payments) and all the rest of us unable to actually use our “insurance” as the deductibles are incredible.

Essentially, it became “catastrophic coverage” for me. I had “Blue something”… Shield? Whatever… and the deductible went to $5000 per year plus some other things. I just don’t use $5000 a year of medical care. And that was AFTER paying about $8000? a year in premiums. Sorry, but I sure don’t need $1000 / month of medical services. Cheaper to just say no. Many folks did that math, and a whole lot of adverse selection set in.

So now we have a very complicated and very broken Medical Welfare System masquerading as “insurance”, festooned with a phonebook worth of rules, regulations, fees, mandates, PITA “savings accounts” (mixing the IRS and Income Taxes with Medical care? You think that’s a good idea?), whatever.

All because folks will not admit to the truth. It is a WELFARE system and a WELFARE problem, not a Medical Care problem. And certainly not insurance.

So the Republicans are continuing this lie with Obamacare Lite. It stinks.

IF you really want a national Medical Welfare System, admit it, and built a simple clean one.

IF you really do not want a national Medical Welfare System, don’t keep 1/2 of one around. Kill and bury it.

But be honest about what you are doing and stop calling welfare insurance.

Subscribe to feed

Advertisement