Rationality
By Wade Gibson, Guest Writer
Issue date: 9/9/09 Section: Features
How much should the United States spend on healthcare? Players in the current debate like to say there's nothing intrinsically wrong with spending money to keep Americans healthy. While that is true in one sense, there is a limit. Imagine you ran a corporation. While you would like the healthiest workforce possible, you wouldn't want to spend so much on healthcare that it crowded out other expenses, such as R&D or quality control.
The analogy is clear: at some point, the U.S. can spend so much on healthcare that it harms our ability to grow and progress as a nation. With health costs approaching 20% of GDP, we may be at that point. Perhaps if we knew we were spending the money efficiently, it would be worthwhile. But U.S. per capita healthcare spending is double that of our peer nations, and to generally worse outcomes (e.g., life expectancy, infant mortality). If you ran our hypothetical corporation, you wouldn't buy a health plan that provided worse care at twice the price.
The United States must figure out a way to control health costs; currently, we ration heavily by wealth. Nearly 50 million Americans lack health insurance; millions more are at risk of losing their insurance with their jobs; millions more have insurance but stand to lose it should they develop a preexisting condition that bars them from affordable insurance. For those without insurance, treatment is limited, and consequently, tens of thousands die each year.
We have contracted out healthcare to insurance companies which-by setting premiums, identifying preexisting conditions, deciding which treatments are not covered-determine what care we receive and thus to a fair extent, who will live and die. Insurance companies do not make these decisions based on what will make Americans live long and healthy lives; they seek to maximize profit, and that means paying for the least care possible. There is a fundamental conflict of incentives.
If we must control health costs, we are left with but one legitimate actor to decide coverage: the U.S. government. Our democratically elected government already makes such tough decisions: it weighs the added safety of straighter, wider roads against their budgetary costs; it balances the benefits of sending troops to protect our allies against the toll in lives. Does Aetna have the legitimacy to send our brothers and sisters off to foreign wars?
You may counter that our government is incapable of making such decisions about healthcare. To argue that, however, you must assert our government cannot accomplish something every other rich nation's government has. And, you must explain why our government's success in providing healthcare to veterans and the aged does not apply to the rest of the country. Satisfaction with both Medicare and Medicaid is substantially higher than with private insurers. So, while the inability argument is not impossible, it is quite difficult. To advance it is to cast a vote of no confidence in a government that has accomplished far greater things. We did, after all, send a man to the moon, and I believe we defeated fascism, rebuilt Europe, and bested communism as well.
Our government of the people deserves a vote of confidence. Through regulation and a public option, we can restrict health insurers' broad power to make life-and-death decisions in the name of profit. Instead of rationing by wealth, we can set coverage by what helps all Americans live long and healthy lives. Tough decisions will be involved: for instance, the taxpayer may not cover hip replacements for ninety-year-olds. The actor making these decisions, however, will be one whose responsibility is to the American people, rather than to corporate stockholders. And, Americans will still have the option to buy private coverage, as wealthy Europeans do now. Of course, private insurers fear we would prefer public coverage to private-perhaps that should tell us something.
A former Congressional staffer and management consultant, Wade Gibson is a student at Yale Law School.
The analogy is clear: at some point, the U.S. can spend so much on healthcare that it harms our ability to grow and progress as a nation. With health costs approaching 20% of GDP, we may be at that point. Perhaps if we knew we were spending the money efficiently, it would be worthwhile. But U.S. per capita healthcare spending is double that of our peer nations, and to generally worse outcomes (e.g., life expectancy, infant mortality). If you ran our hypothetical corporation, you wouldn't buy a health plan that provided worse care at twice the price.
The United States must figure out a way to control health costs; currently, we ration heavily by wealth. Nearly 50 million Americans lack health insurance; millions more are at risk of losing their insurance with their jobs; millions more have insurance but stand to lose it should they develop a preexisting condition that bars them from affordable insurance. For those without insurance, treatment is limited, and consequently, tens of thousands die each year.
We have contracted out healthcare to insurance companies which-by setting premiums, identifying preexisting conditions, deciding which treatments are not covered-determine what care we receive and thus to a fair extent, who will live and die. Insurance companies do not make these decisions based on what will make Americans live long and healthy lives; they seek to maximize profit, and that means paying for the least care possible. There is a fundamental conflict of incentives.
If we must control health costs, we are left with but one legitimate actor to decide coverage: the U.S. government. Our democratically elected government already makes such tough decisions: it weighs the added safety of straighter, wider roads against their budgetary costs; it balances the benefits of sending troops to protect our allies against the toll in lives. Does Aetna have the legitimacy to send our brothers and sisters off to foreign wars?
You may counter that our government is incapable of making such decisions about healthcare. To argue that, however, you must assert our government cannot accomplish something every other rich nation's government has. And, you must explain why our government's success in providing healthcare to veterans and the aged does not apply to the rest of the country. Satisfaction with both Medicare and Medicaid is substantially higher than with private insurers. So, while the inability argument is not impossible, it is quite difficult. To advance it is to cast a vote of no confidence in a government that has accomplished far greater things. We did, after all, send a man to the moon, and I believe we defeated fascism, rebuilt Europe, and bested communism as well.
Our government of the people deserves a vote of confidence. Through regulation and a public option, we can restrict health insurers' broad power to make life-and-death decisions in the name of profit. Instead of rationing by wealth, we can set coverage by what helps all Americans live long and healthy lives. Tough decisions will be involved: for instance, the taxpayer may not cover hip replacements for ninety-year-olds. The actor making these decisions, however, will be one whose responsibility is to the American people, rather than to corporate stockholders. And, Americans will still have the option to buy private coverage, as wealthy Europeans do now. Of course, private insurers fear we would prefer public coverage to private-perhaps that should tell us something.
A former Congressional staffer and management consultant, Wade Gibson is a student at Yale Law School.
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