I had a question about what I would consider a good health-care reform bill. So, I figured I'd spell it out.
Any meaningful reform of health care would involve:
1. Universality. I am not a person who will ever say that anything is "too expensive". That is not an absolute statement. What's too expensive for a crackhead living on the sidewalk may not be too expensive for Bill Gates. So, whether something is "too expensive" or not depends on what sort of resources are available.
An interstate highway system was something that was a stretch to afford in the 1950s. However, it would have been cost-prohibitive in 1910. As the economy grows, we, as a nation, have the ability to afford larger and more expensive undertakings.
This highlights my belief in stimulating economic activity. Rather than having a mind-set of trying to fight for slices of the pie, the best path has always been to make the pie bigger. Or, in the infamous words of GWB, "make the pie higher".
I think our economy is large enough, now, that we can implement universal health care without bankrupting ourselves. In fact, universal health care is pretty much our only shot at NOT bankrupting ourselves.
So, any meaningful health care reform would involve providing coverage to every person, regardless of ability to pay. More on that later.
2. Funding via a flat-tax on income. Health care should be funded by a line-item in the federal tax code, the same way medicare is. We pay 2.9% for Medicare taxes, and our employers contribute another 2.9%. There is also no cap on the wages that are subject to Medicare tax. We could fully and completely fund the incremental cost of universal health care by increasing this tax burden from 2.9% to 3.9% for both taxpayer and employer.
I would also make other changes to the tax code, such as making ALL INCOME subject to Medicare taxes. As the system currently is written, Medicare and Social Security are regressive taxes that hit people whose income is 100% derived from wages harder than it hits people who have some portion of their income in, say, stock dividends.
Granted, the tax implications are a bit complicated, and beyond the scope of this blog posting, but I believe that all income is income, and should be treated as such unless quickly re-invested in an investment of similar characteristics.
Because we have this complicated system where wages and investment income are treated differently, we are now using the tax code to PAY MONEY to low wage earners. A huge percentage of the US population files a tax return every year not to pay taxes, but to get government entitlements in the form of refundable tax credits.
It's welfare, which I abhor. But it's been implemented to negate the effect of regressive taxes, which I abhor. Our current tax code simply piles evil on top of evil rather than simply saying that if you have income (regardless of source), you need to pay tax on it.
3. Negotiated Pricing. Every business in America has the ability to negotiate with its vendors. Some vendors are tougher than others. Some won't negotiate much. Some will negotiate a lot. However, every day, in every venue, a person with money can negotiate pricing on things they want to buy. I once astounded a guy who I had a roofing business with, by negotiating a lower price on roofing shovels at the cash register of a lumberyard.
However, lobbyists have been busy trying to get laws written that prevent the US government: the nation's largest health-care buyer, from being able to negotiate rates.
The end result is that for pharmaceuticals, every other industrialized country pays, on average, about 30% less for prescription drugs. Because our congresspeople have sold us out to lobbyists, we can't even get the same rates every other industrialized country gets.
As for medicare pricing schedules, and other things that health-providers abhor, I don't think anybody should be FORCED to take government-health patients. But if you control that much business, you should be able to negotiate rates. As I've ranted about previously, doctors offices are some of the most poorly run businesses I see. Customer service is hideous. Their back-office function is a wreck. The only thing approximating efficiency is the rate at which doctors see patients.
Like any business that doesn't have to be efficient, doctor's practices are not. They don't like the squeeze, but they should be using it as impetus to make themselves better. They aren't. Which tells me they're not being squeezed hard enough.
Bottom line: simply being able to negotiate our purchasing contracts would mean that we'd save 30% on our pharmaceutical costs with the stroke of a pen. The same type of savings could probably be achieved throughout the health-care system.
4. Total government health-care expenditure pegged to a percent of GDP. Canada pays for 100% of all the health-care required in their country with 11% of GDP. I would say that we should peg ours at about 10%. Flat-out, our government health-care spend should never exceed 10% of GDP.
Since this means that we could not spend every penny on every thing, then we'd have to make some choices as to where the government should best spend its health-care money.
5. Death panels. I want them. Not every health-care dollar has the same impact. We spend the greatest portion of our health-care money on end-of-life care. The reality is that human beings get sick. Human beings die. We hate it when they do. That's no reason to throw a half million dollars at every person with a terminal condition on the hopes that we can prolong their lives for a few weeks at zero quality of life.
What if you WANT to keep gramps hooked up to a machine in a vegetative state? Good for you. Pay for it yourself.
Where money is involved, you need to make choices and some of those choices are hard. I have elderly relatives and I love them dearly. However, if I have to choose between, say, health-care for a newborn child for 20 years, and a liver transplant for an 87 year old, only one of those choices makes any sense at all.
England, frankly, has tackled this rather daunting and difficult task and has done a respectable, though imperfect, job of prioritizing health spending based on impact on quality of life.
People distrust the government, and I don't blame them, but unless we simply want to open our wallets and let health care spending grow to infinity, we have to have cost-containment.
Again, I am not saying that a person shouldn't be able to spend THEIR OWN money on this sort of thing. If you really want to squeeze 3 more weeks of life out of auntie Gertrude so she can live in a vegetative state being fed by a tube and breathing with a ventilator, you can spend your own $300,000 to do it, or have a charity car-wash and wash 150,000 cars, or whatever.
However, your desire to want to throw vast sums of money at minimal health outcomes should not come at other people's expense.
6. Streamlining of administration and proliferation of best-practices. All over the country, there are pockets of innovation where ideas that save money and produce better health-outcomes are being sprouted every day. Nobody really cares. Doctors make money by providing services. So, they aren't looking for a way to reduce services.
One hospital in Chicago took a common problem: an ER patient complaining of chest-pain, and broke it down into a simple questionairre with a half-dozen questions on it. In the vast majority of cases, instead of a battery of tests, the prudent thing to do was to give the patient aspirin and send them home with a list of other symptoms they should look for. The difference in cost? Less than a dollar, versus six figures. The outcome? Patients who were diagnosed using the new set of questions, and who were usually sent home with aspirin, had identical health-outcomes to patients who were given the battery of tests.
While the experiment was being conducted, the doctors whined a blue-streak that this was not the way medicine could be practiced. That it was coming between doctor and patient. That it was taking away a doctor's judgement in a situation.
Sound familiar? The doctors whine about these same things at EVERY attempt to proliferate best-practices in their industry. The basic argument? We don't want to do what's best. We want to do what we feel like doing.
Not many other people have the luxury of saying that at work. However, we've let doctors get away with it for a while, now.
Bottom line: there ARE best practices that save money and save lives. Doctors, as a profession, are extremely resistant to any suggestion that standardized practices have any benefit at all. The doctors are wrong.
7. Some form of copays, but very, very, very modest ones. As any ER doctor or nurse will tell you, if you have patients who do not have to pay anything for medical care, some percentage of them will abuse the priviledge. I literally remember an ER visit where I was being stitched up and an indigent patient in the area next to mine hung around complaining about "high blood pressure" until she was given a sandwich, at which point, she left.
So, there needs to be some sort of copay, but not a big one. Literally, a co-pay of $5 will go a long ways towards eliminating abuse of universal health care. A hospital in the 80s began a practice of asking for a 25 cent copay for indigent patients in their ER and it cut down unnecessary visits by 90%+.
Things that are provided at no cost are perceived as having no value. There needs to be some cost to the users of health-care. Not for economic reasons, but for behavioral ones.
That's the basic gist of what I'd like to see. Remarkably, Obama's plan had some of these provisions. (It did not, contrary to popular belief, have the Death Panel provision), but Max Baucus has put his own interests ahead of the interests of the human beings who live in this great nation and made sure that the resulting health-care bill is simply the stupidest thing to hit Washington since... well... Max Baucus.
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