Saturday, March 20, 2010

The Health Care Recipe

On this weekend of what will apparently be the deciding vote on the future of health care reform in this country, it's interesting to understand some of the history and human nature involved with the recipe for health care that we are cooking. What we are trying to prepare here is a dish from the tax exclusion of employer provided health benefits. 

This all began under a rather famous progressive President, Franklin Delano Roosevelt, whose administration during WWII instituted wage and price controls to keep corporations from profiteering from the war ("excess" profits were taxed at an extremely high rate) and to keep them using such profits in a bidding war for employees. Employer provided health benefits were exempt from these laws however, so companies plowed profits into such plans to retain their best and brightest. 

Hence today, if you try and buy private health insurance, you do it with money that you are taxed on. If you receive it from an employer, the money is untaxed ... clearly a better bargain. Human behavior then makes its way into the recipe, by following the golden rule that anything provided to a person for free will be considered of little or no value. In the days of low-deductible, low co-pay insurance, there can therefore be no harm in abusing the use of something that costs you nothing. 

As a consequence, people and doctors took full advantage of this "free" service provided by employers. The government re-entered the process with Medicare and Medicaid. Well intentioned as the programs might have been, they provided further "free" medical care to those already not covered under employer programs and encouraged further abuse of the system. Not only did they cater to the potential abuse of a program which the patient didn't seem to directly pay for, but they contributed additionally by setting fixed benefit payments structures for certain procedures. This had the doubly negative consequences of readmitting government price controls to a part of the process and allowing (or forcing) doctors to recover lost revenue by charging higher prices to those not covered by these government programs. 

Added then to the ingredients of this were the efforts of trial lawyers, who sought to maintain the confusion between honest human error and criminal behavior for the purposes of personal financial gain. Capitalizing on a combination of greed (personal and professional), carefully bought and paid for tort law, and the natural sympathy of juries for those they feel have been wronged; they turned medical malpractice into a winning lottery ticket. Pain and suffering were turned into potential free rides for those unlucky enough to have been injured, but lucky enough to have a good case and better lawyer. This liability lottery in turn led to malpractice insurance rates that further drove up the cost of medicine and a massive increase in testing procedures (and their billable costs) in a vain attempt to cover the posteriors of doctors against future lawsuits. 

The final ingredient of course is the creativity of the human mind. Given time, opportunity, and the opportunity to make a profit by doing so; Man (and Woman) will seek ways to extend their own existence and that of their fellows through and increase of medical science. New technology, new drugs, and new treatment procedures will inevitably drive up the cost of medicine and the length of time that a given human being has access to it. 

Stir such mixture together and bake in a Congress that has no concept of fiscal responsibility and you get the spiraling increases in the cost of medical care in this country today. 

 There is a further truth here however and since I know of no other way to do so, I will just say it: "Government has never been able to control the cost of any good or service, only the payment given for it." Thus the recipe for health care reform currently on the table seeks to change the nature of the result without changing any of the ingredients used. It does not take into account the nature of the cooks or the way that the dish has been prepared for over 60 years. In a argument far too typical of government policy, they tell us however that this recipe will undoubtedly achieve a better and more palatable result if we just make it in a much larger batch.

1 comment:

Roland Hansen said...

I have heard that Tim Higgins' Cookbook has many recipes, all of them creative.