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Economic dishonesty in health care debate - part 2
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Yesterday my article discussed how the claims that health care "costs" kept rising were inaccurate. It is only one of the many arguments used in the health care debate that is less than honest. Another which conservatives love is to claim that any public plan will require "rationing" of health care.
The problem is, in the economic sense, we already ration health care. How many arguments for public health care are complaints that some people cannot receive a treatment because of an inability to pay? The people making that argument are basically pointing out that in the US, the ability to pay for a procedure or treatment is used to "ration" the use of that treatment. If conservatives are not willing to admit to that part of the debate, the rest of their argument is limited in power.
The more accurate way to make this argument would be to question if revising the method of rationing from the economic ability to pay, to some political or wait list method is preferred. Its clear from reading articles about the health care systems in Canada and the UK, that there are tradeoffs that are made by both nations to keep their health care spending down. Thomas Sowell pointed this out in a recent article when he noted:
In Canada, 27 percent of the people who have surgery wait four months or more. In Britain, 38 percent wait that long. But only 5 percent of Americans wait that long for surgery.
Turning the argument about "rationing" into one of availability is probably more accurate, and more understandable. And there are enough horror stories from the government managed systems in Canada and the UK to point out. I do not remember where I saw it, but there was a recent article about a baby born in Canada prematurely. The Canadian hospitals do not have the Neo-natal equipment necessary to save the child, so the child was transported to a hospital in Buffalo, NY, for treatment. Obviously, a choice had been made previously in Canada that the price of installing and maintaining the equipment and expertise necessary to operate it was in excess of available funding. In an economic sense, the care was "rationed" out of existence in Canada, although fortunately the availability of the equipment in the US prevented this premature baby from becoming a statistic.
And although I'm trying not to be heartless, unborn babies have become statistics in some cases due to the economic decisions made as part of keeping health care costs down. UK hospitals have been known to turn away women who are in labor due to a lack of beds in maternity wards, and if the stories I have read over the last six months are accurate, there have been at least three deaths of both mother and child due to delays in getting them to see a doctor when complications set in. Again it was the effects of the decisions to reduce cost, which created the lack of available treatments.
The health care debate is going to remain nasty and emotional. Everyone wants to know they will be healthy or can be healed if they become suddenly ill or injured, and having a price put on that health by a doctor can be a very upsetting experience. Unfortunately there are economic realities that are proof against any system. Too many people have heard someone say "supply equals demand" without understanding the full statement, rather than the three words that end it. The full phrase is actually: "For almost all products, there exists some price level at which supply equals demand". For health care, we see that most people are willing to pay a high price for their own health, but they resent having to pay it, even though it’s the only way to guarantee that care is supplied at the levels they continue to demand. Nations like Canada and the UK have attempted to get around this problem by limiting repayments and disbursements, and in doing so, effectively limiting price. It works, but most consumers of health care in both nations have noted that many services are not available or only available after long waits due to short supplies. It is due to the fact that those nations have chosen to accept an explicit rationing rather than the economic rationing by price the US uses.
Conservatives need to avoid calling it "rationing". The argument they are making is that should health care reform result in reduced payments for specific treatments and to individual doctors, the economic incentives to provide care will be reduced and likely result in a reduction in the availability of some treatments.
After all, the government is not going to sit down and put together a giant spreadsheet where they say each hospital can only perform so much of each treatment a month. However, if the government tries to cut the amount of money given to hospitals and doctors, they will see a reduction in the number of doctors and see hospitals put less capital investment into new treatments and equipment. The VA system already shows this occurring and has for many years. The 1992 movie "Article 99" is a great example of a hospital fighting with reduced funding, although a huge part of the plot was that corruption in the hospital administration amplified the funding shortages.
The debate will rage on, but honest approaches to the debate will help both sides make it clear not only what they want to accomplish, but the economic limitations to achieving "universal and perfect" health care while lowering the percentage of money spent on health care back to the 5-6% people claim they want. The market has already shown us that we cannot have both universal coverage and new medical advances without paying the price for this luxury. Its time the debaters explains how they plan to trump the market.
