Tuesday, February 21, 2017

Repeal and Replace

Repeal & replace or repair. While there is importance to these words, they can be misleading. Sleight-of-hand is the tool of the magician ... and the politician and the subway thief. A band of entertainers enters your subway car and does magic tricks as their buddies relieve you of your wallet and other valuables. Those skilled at sleight-of-hand are never easy to anticipate and generate a lot of fun before they do their harm.

Repeal and replace gets the political base all fired up. Some people prefer to say repair but even that word elicits a political war cry. My eyes grow weary reading the endless minutiae. The Democrats will fight to the end over either repeal or replace. Republicans will argue the timing of the repeal and replace as if they were deciding which sit-com to watch first.

But stop sniffing a minute and realize that these words are there to inflame while the real issue is the improvement of the national healthcare system. D or R, we all believe that the system can be improved. Before Obama radically altered the system, most of us would have agreed that the system could be improved. And today, I think we know that healthcare isn’t perfect.

So why blab repeal and replace when what we all really want is improvement. Of course, we don’t agree on exactly what needs to be improved just as many of us held different opinions about Meathead in All in the Family. We are a nation of free thinkers. We love to disagree. Most bars would go out of business if we all agreed on everything.  

As we go about improving healthcare, it wouldn’t hurt to start out with some shared goals. We might not agree on the ways to reach those goals but let’s at least find some common ground. For example, most of us would agree that hospital gowns should have backs to them. No one likes a butt sticking out. And then there is the total avoidance of JD as a painkiller. That seems silly.

So now we have a place to start. Let’s move on. Another shared goal is access to healthcare. Let’s vote. Should we advocate limited access or wide access to healthcare? Everything else the same, let’s try to have a system that is available to most of us.

Second, let’s have a system that is affordable. Again it is easy to agree. Do we want a system that no one can afford, or do we want most people to be able to buy healthcare without selling the family's glug glug collection?

Third, to attain these goals we know there must be a mixture of market provision and government assistance. This is our tradition and is nothing new. We buy cars and cabbages in the free market yet we also have an extensive income supplement program for those with less capacity to purchase. We liberals and conservatives argue about the balance of market versus supplement but we pretty much agree that both are necessary.

Fourth, it doesn’t take Albert Einstein to understand that society must be able to afford this balance of market and supplement. Our hearts cannot rule our heads. Too much supplement doesn’t automatically make us Greeks but it could weaken our overall economic strength. 

Fifth, if the market is to provide healthcare then attention must be paid to the purveyors of healthcare – doctors, nurses, hospitals, insurance companies, pharmaceutical and medical device makers. There is no market without supply. Suppliers must want to provide their goods and services. At the same time, since parts of their earnings come from government supplements to the system, some supervision over their participation and prices is necessary.

Insurance will likely continue to be the basis of the healthcare system in the USA. Insurance markets exist in other venues – houses, automobiles, life and other financial products, and so on. Insurance has well-known principles. A major one is that many people pay into the system while others receive benefits. For example, good drivers pay for auto insurance each year and get nothing but piece of mind in return. But after some maniac who tries to change lanes with a margin of three feet going 90 miles per hour rams into you, then State Farm pays you to have your wrecked Lada replaced with a lovely Ford Edsel.

That’s the way insurance works. Some folks pay and some folks receive. If there are too few of the former and too many of the latter, then you have a problem. It makes absolutely no sense to let people enroll in insurance after they have a wreck. So any plan for health insurance in the USA will have to address ways to make people want to participate in the system when they are not ill. It seems to work for autos. I am not sure why we can’t find a way for healthcare.

It also seems related that people who find themselves out of a healthcare plan would be allowed to transition to another one. If someone has very serious conditions there should be an affordable way for them to find and keep insurance. Kids on parents' plans similarly need to be covered.

The above does not seem far out to me. Replace? Repeal? Keep your eye on the ball. We need a better healthcare system. Period. Healthcare reform always starts with something. Then you improve it. Now is no different from the past. Except for maybe the fact that people in both parties seem to have more fun screaming like banshees than actually doing something good for the country. 

9 comments:

  1. (1)Everyone, providers and consumers alike, must have "skin in the game".
    (2)"Rationing" is not an "expletive deleted" but a much needed component. The question is "How" and by "Whom"
    (3) "Coverage" and "Access" are not interchangeable synonyms.
    We go nowhere without inclusion of the 3 points above.

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    1. Thanks JCB -- excellent succinct summary.

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  2. Larry, I found your post today interesting. You may not know that Arlen Langvardt and I spent 5 years researching healthcare reform from 2005-2010, my last 5 years at IU. We published several papers in law journals and co-edited a special edition of Business Horizons at Catherine Dalton’s request with all invited articles from several leading scholars in the field. One argument we made was that a good healthcare reform should accomplish 3 fundamental goals: (1) significantly expand coverage; (2) materially improve the quality of healthcare; and (3) substantially reduce the cost of healthcare. If that sounds like the Holy Grail, we argued it wasn’t. The Swiss have a high-quality care, private insurance system that basically covers everyone for 2/3 of what we spend on GDP for healthcare. Unfortunately, neither the Democrats nor the GOP were interested in doing what was best for the country. Both parties wanted principally to use healthcare as a tool for gaining political advantage. The greatest impediment to efficacious healthcare reform is selfishness. Maybe that is a another way of saying much of what you said in your post. John Hill

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  3. Larry, I found your post today interesting. You may not know that Arlen Langvardt and I spent 5 years researching healthcare reform from 2005-2010, my last 5 years at IU. We published several papers in law journals and co-edited a special edition of Business Horizons at Catherine Dalton’s request with all invited articles from several leading scholars in the field. One argument we made was that a good healthcare reform should accomplish 3 fundamental goals: (1) significantly expand coverage; (2) materially improve the quality of healthcare; and (3) substantially reduce the cost of healthcare. If that sounds like the Holy Grail, we argued it wasn’t. The Swiss have a high-quality care, private insurance system that basically covers everyone for 2/3 of what we spend on GDP for healthcare. Unfortunately, neither the Democrats nor the GOP were interested in doing what was best for the country. Both parties wanted principally to use healthcare as a tool for gaining political advantage. The greatest impediment to efficacious healthcare reform is selfishness. Maybe that is a another way of saying much of what you said in your post.

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    1. John, as in the response from JCB above, it never hurts to find better and better ways to say similar things. I hear more frequently that the problem we face these days is self-serving ideological politicians. If we all recognize that as the problem, why is it so difficult to solve? Maybe democracy needs a facelift in 2017?

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  4. Dear LSD. Here’s a revolutionary proposal for universal access to healthcare insurance that fits your needs and pocketbook.

    Develop a vending machine for every 7-11, gas station, shopping center, voting precinct, drivers’ license office, etc. offering a menu of choices from which to select types and extent of coverage, deductibles/copay amounts, height/weight, whether cig smoker or JD imbiber, medications, diseases, and amount or range desiring to pay. The insurer will reply with coverage and premium commensurate with your physical situation. All you’d need for a binder is a credit or debit card. If you have neither, choose the option to receive an invoice if you want to pay by check or other means.

    This is a beautiful solution. 24/7 access to insurance designed specifically to your situation and at a price you select. No precondition exclusions or age limitations, available in any state—no need to pay for birth control if you’re over 70, register to vote and get health insurance and renew your driver’s license all at one-stop-shopping or while gassing up your fossil fuel polluter. Heck, maybe we could even set up a virtual on-line vending machine (oops, I think that’s already been tried) if you can’t make it to one of the aforementioned locations. If you don’t want health insurance don’t press the “Add to Cart and Buy” button. It’ll be like Burger King—“You can have it your way!”—either want it and buy it or not—no taxman to garnish your pay or tax refund.

    Ah-h-h-h, but what if you can’t pay the premium but want/need the insurance? Darn, therein lies the problem. Guess, we’ll just have to rely on the lender/payer of last resort that’s been around since 1913—the generous good ol taxpayer. Hooha for him/her! There’s your govomit assistance.

    Just think . . . Rs and Ds won’t have to argue, complain, vilify, stomp, gnash teeth and pull hair, etc. over whether to repeal and/or replace. Just build the machine and they will come.

    Ah-h-h-h, but that doesn’t really lower the cost of the healthcare—does it?—only addresses access to insurance. Getting healthcare providers to be more effective and efficient to lower the cost of healthcare is an entirely different problem, eh?

    I see a parallel between the increasing cost of education and student loans with the cost of healthcare. The former have increased because the education system and D.C. have arranged (er, screwed . . . ) for the taxpayer to pay the bill in the case of default. I bet if colleges were the lenders and responsible for the quality of the product and collecting the debt that the quality of the product would improve and the cost decrease—get the taxpayer out of the picture. Health insurance has had the same effect on the cost of healthcare: Providers have increased their costs and/or been unmotivated to be more effective/efficient because taxpayers’ insurance and/or the taxpayer will absorb the cost/excesses. Commonality = the taxpayer left holding the bag. Hooha for us!

    Mr. Hill mentions Switzerland . . . . let’s go!

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    1. International comparisons are tempting but sometimes misleading. If you like high tax rates and yodeling then you might also like the healthcare system in Switzerland. Unfortunately what works for the Swiss might not work for us. Whether it is healthcare specifically or welfare in general, countries that have very large and diversified populations have different challenges than small countries with very homogeneous populations. You compound that problem in the USA today as politics has pushed the discussions to the fringes and rationality has gone out with the 8 track player.

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  5. Re Swiss taxes: Taxes in Switzerland vary from canton to canton, but the highest total tax rate (fed, canton, municipal and church) on single people earning 500K CHF is 125K, the lowest 57K, a range of 25% down to 11.4%.

    RE Swiss population diversity: Approx. 1/4 of the population was born outside Switzerland. Along with Austria, Switzerland has the highest proportion of immigrants in the western world. Total pop = approx. 8 million, registered foreigners approx. 1 million. 10% of the population speaks an immigrant language.

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    1. John, I stick with my general point that international comparisons are often misleading. But your points about Switzerland are indeed interesting and I now see that Switzerland does not fit the mold of high taxes and homogeneous population. Still I doubt we in the US could adopt a Swiss model for healthcare. I would guess that we would need a lot more subsidy than the Swiss allow.

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