Michael G. Roskin: Health Care’s Dirty Secret
Thursday, March 30, 2017 9:53 AM
The dirty little secret about health care reform is that it’s impossible. Yep, can’t be done. No insurance can support an extremely expensive medical system at low cost. If it costs a lot, users must pay a lot, either as individuals, through insurance (paid by individuals) or through taxes (ditto). “Reform” just shifts from one basket to another. The nation cannot avoid its aggregate medical costs nor push them back, any more than King Canute got the tide to recede.
Republicans have a point: Obamacare is wobbling. Premiums and deductibles are soaring, and insurers are withdrawing from some states. If unmodified, it could put itself out of business. Some Republicans suggest that as a strategy, but they will catch mass blame for deliberately running it into insolvency. Democrats will accuse Republicans of “sabotaging” Obamacare by denying funding.
But people forget that pre-Obamacare, our health care system was also collapsing. Costs zoomed out of control. Many people had neither insurance nor established physicians so they overloaded emergency rooms but were unable to pay. Hospitals tottered under uncovered costs. Businesses groaned under company health costs.
Health care costs devour 17 (some say 18) percent of GDP, and bringing costs down with federal caps would enrage powerful medical, hospital and pharmaceutical interests, who would withdraw their services. Basically, federal programs consist of trying to pay for ever-rising medical costs; they keep feeding the beast. Cost hold-downs have slowed growth but not reversed it.
We are in a high-stakes poker game in which consumers must put in all their chips. Across the table, Big Medicine, Big Hospital, Big Insurance and Big Pharma just grin and say, “I’ll see you and raise you.” There’s no way you can keep up with the big guys; they’ll always raise you.
Trump promised to replace Obamacare with something “far less expensive and far better.” Impossible, and the measure just pulled from a House vote would have delivered nothing of the sort. Fewer would be covered, and premiums and deductibles would rise. Actually, Maine’s Sen. Susan Collins proposes a more interesting and flexible health care plan — if anyone is listening.
Many years ago, a University of Chicago economist suggested turning health care into a market by making its participants compete. Doctors would advertise their medical-school ranking, their patient death rate and their fees, so consumers could shop for care and prices that suited them. Well, it works for toaster ovens. The late Nobel economist Kenneth Arrow, however, found that medical care does not form a market because its components do not compete.
Republicans claim they can be induced to compete. Led by Rep. David Brat (R-Virginia), who opposed Ryancare, they would strip away federal mandates and payments and let a market function. But this takes no account of technological advances in medical care, each costlier than the one before, and an aging population, which consumes more health care. Can we limit treatments to the proven and cost-effective and meds to generics? Try that on the public.
Dental care — because it’s not as vital — may be a bit more competitive than medical care. Patients are more likely to shop among dentists and treatments than they are to shop physicians and procedures. I could say no to dental implants but not to an aortic valve replacement.
In the 1970s, when our three kids were little, we had only catastrophic coverage. But our small-town family doctor charged $6 a visit, later raised to $10, and we often just phoned in our child’s symptoms, and the nurse, who knew all the illnesses going around, phoned an inexpensive prescription to the pharmacy 100 yards from our house. That’s how they cured my walking pneumonia in 1977. Sigh, but we ain’t going back to that. Those prices had to rise and medical insurance skyrocketed, pushing individual practitioners into group practices.
Most advanced countries have better outcomes at lower costs, but they have very different cultural and legal histories, namely, they’re more obedient than Americans. Most European systems combine private and public insurance. Singapore holds down costs by encouraging shopping for best deals. Japan limits the costs of tests and treatments. Where that’s done in U.S. Medicare, many physicians chafe under it and avoid Medicare patients.
With Obamacare still in place, Republicans could copy Britain’s Tories’ return to power in the 1950s. They did not repeal the National Health Service passed by a Labour government in 1948. Instead, they boast that they administer it better than Labour, adding some co-pays and supplemental private insurance. Brits like the NHS, and Conservatives have governed most of the time since.
The failure to repeal Obamacare has actually boosted Medicaid. Many of the 19 states that refused to expand their Medicaid programs with federal funds from Obamacare — Gov. LePage vetoed expansion several times — are reconsidering: Since Obamacare stays, take the money. A November referendum will let Mainers decide. Medicaid’s growth over 62 years moves the U.S. closer to a single-payer system. Hey, Republicans, meet irony.