Tuesday, September 29, 2009

Framing the Discussion: A Look at Health Care

I can't find or remember the exact quotation, but in A People's History of the United States Howard Zinn quotes Noam Chomsky, reminding us that the best way to squash dissent is not, in fact, to try to limit freedoms. Rather, the best way to ensure that the policy you as a government, a corporate entity, or a political party want is to allow an impassioned and heated discussion within a very narrow field of opinion. As the U.S. Senate voted down a public option today, I cannot help but weigh in from this perspective: the difference between the bill with the public option and without may seem momentus, but it is not. Indeed, the debate about health care in America has been framed brilliantly, so that the range of opinions currently in circulation in the media and in the congress is so outrageously narrow that the almost constant incendiary articles and opinions and debates about the subject seem absurd.

I would characterize the extreme ends of the current debate thus: on the one hand - the generally Republican side (but more on parties is sure to come) - we have a position that says we should mandate insurance coverage for every American, including assessing fines to those who fail to purchase insurance when they can afford it (according to who, we might ask), granting stipends to those who can't. On the other hand, we have a position that says we should mandate insurance coverage for every American, and we should provide public insurance option for anyone who wants to opt-in, but in a way that does not undercut the competitiveness of existing insurance companies. I recognize that the situation is more complex than this, but I think it's a fair description of what we might call the "extremes" in this debate.

What these two plans have in common is this: they are different from what we are doing now primarily because they both require every American to have health insurance. They differ from each other in that, in one, Americans are asked to purchase insurance from private companies, whereas in the other, they are given the option of purchasing insurance from the government. Without getting into the politics of those options, it seems to me that this is a fairly insignificant difference. Sure, the public option may be cheaper than health insurance company rates, and may have fewer absurd situations where coverage is denied for no reason, but it is impossible that the proposition would pass if it posed a serious threat to insurance company profits. No, there is almost no difference between what the Democrats and the Republicans are offering in this debate, because there is no discussion of the two broader extremes of radical reform, both of which, I'll argue in a second, make more sense than the Democratic and Republican options. This should come as no surprise, however, since both sides of the debate are being funded, essentially, by the same interests, and it pays to remember: the health insurance companies have already won.

I want to engage in a little thought experiment, but first I need to introduce what I'll call the "Libertarian" option and the "Progressive" option. Both these perspectives fall well outside the current debate, but they represent what all the crazy "fringe" leftists and rightists actually want. The Libertarian option I would say is this: entirely deregulate the health care industry. Eliminate all protections, barriers to entrance, and moral requirements (what few there are) the government has imposed. While this may sound callous to most of us - to me, for example, the argument is actually not absurd. The idea is, if it were easier to form an insurance company, or a hospital, or a broader health care corporation, then there would be more competition and less collusion than there is now, leading to a higher quality of service.

On the other hand, there is the Universal Health Care argument. This is the tried and true method that almost every other country in the world currently uses: health care is run entirely by the government, and coverage is guarenteed for every citizen. The argument here is that health care is a human right and a moral imperative, and we simply cannot leave it to the vagaries of profit-motive and personal ambition. Making health an economic decision, the argument goes, is wrong. The quality of service, here, may not be as high for the wealthiest citizens as it is under other models, but the overall quality is much higher (by analogy, Honda may not make the finest automobiles in the world, but it's better to have a bunch of Civics running around than a few Aston Martins and a bunch of horse-drawn carts).

So let's run the thought experiment. I'm going to do a lot of approximation here, but my point should be clear by the end. Let's say it costs 100 economic units to provide health care for every American. In our current system, 20% of people aren't covered, so we're only paying 80 of those units (though that is driven higher by people delaying coverage due to cost concerns). On the other hand, health insurance companies charge a lot for overhead, and make tremendous profits, so let's say we're actually paying something more like 130 units (50 units for profits and administration). That's as things stand.

Under the Republican model, we'd have this: 100 units base cost, and all 100 units being paid, plus additional cost for expanded overhead and comprable profits. So our total cost is now 160 units.

Under the Democratic model, we're in a similar boat: 100 units base bost, all 100 being paid. Profits probably decrease a bit, but government beauracracy increases overhead significantly, so we're probably somewhere around 170 units.

As you can see - if you buy my premises - there's not a significant difference here. The Republicans may decry the cost of Obama-care, but the alternative is just as expensive.

How about the "Libertarian" plan? We're probably going to spend something like 90 units - I think fewer people would choose to forgo insurance if there was more competition in the insurance industry. Lower prices result in smaller profits, too, and overhead decreases with the formation of smaller, sleeker companies. So let's say the overall cost is 120 units (20 for overall profit, 10 for overhead).

Universal Health Care? Now we're covering all 100 units, but there's no profit, and while there is overhead and beauracracy, it's not as complicated because there's only one supplier. Let's guestimate 15 units for administration. So we're at 115 units and everyone is covered.

I'm sure there are studies that actually do this math, and I'd be shocked if the results don't match mine. Universal, single-payer health care covers everyone for less money than any other plan. Why isn't it on the table? Because health insurance companies go caput, and the fact that they are fighting to survive means they're willing to spend endless resources to maintain their position. Where they've been most effective, however, is not in shaping policy (if it were up to them, we'd have a hybrid of all of the most profitable practices possible), but in framing the debate. Which side are you on, Democrat or Republican?

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