Fixing Healthcare: A Better Way Forward

The United States health care system is broken. At least that’s what we hear. But how could that be possible in a nation that leads the world in technology, education and medicine? Generally, the term “broken” suggest that something does not function as intended. If the intent of the health care system is to increase the physical well-being of all American citizens then success must be supported by two essential pillars. First, the industry must provide quality care – educated physicians, advanced testing and treatments, and well staffed and well equipped hospitals and clinics. Second, it must be accessible to the population as a whole, irrespective of gender, age, ethnicity, religion or socioeconomic status. If either of these pillars are weakened the entire health care system can indeed be considered broken. This must be our focus then, in discovering the weaknesses of the system and how it can be strengthened in such a way that does not compromise the liberties of the parties involved.

First, we have to diagnose the faults and identify the causes. Regarding the first pillar, the quality of health care in America is bar-none. A person can receive a broad range of treatments for just about any medical or cosmetic reason, and can be served by top-notch physicians with state-of-the-art technological equipment – as long as they can pay for it. That particular detail reveals the marbled and scattered fractures in our second pillar. The unfortunate side effect of Capitalism is that there are those who have and others who have not, and when it comes to health care, those in the latter camp – it is commonly believed – are left in the dust. But this supposition is somewhat of a misconception. If it were true then the second pillar would not be simply fractured, it would be toppling over.

The reality is that even those who have no insurance and no ability to pay for care at all will still receive treatment in America. No person who walks into a hospital with a serious condition will be turned away and left to suffer or die. The true problem then in the system is the unnecessary financial burden that is forced upon those who do pay. Taxes and insurance premiums have risen to such levels that it is nearly impossible for a healthy individual who works for a moderate income, abides by the laws, and desires to live financially independent of the government to afford basic health insurance. It becomes even more difficult for a family. The uninsured number is up to 40 million in America – largely because insurance is simply too expensive for many average citizens.

Essam Girgawy, a Houston area physician, explained to me in a personal interview a few key factors that hike up the price of health care. One is the large number of individuals who cannot or will not take care of themselves and do not have insurance, but but are treated just as any other. He refers to them as “professional patients” – especially those who claim disability from their conditions even though they are entirely able to work. In these cases the hospital will admit the individual when necessary, which can cost upwards of $1,000 per day, and the physician works for free. The hospital also covers medicine and testing. However, uninsured patients are typically taken to county hospitals, which are allowed to claim large amount of money from the federal government for charity work. Essentially, the taxpayers are footing the bill. In this game the patient is the winner, the hospital comes out even and the true victims are the doctors and taxpayers – to be clear who these taxpayers are, they are almost entirely middle and upper class citizens who also pay for their own insurance.

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The reality is that even those who have no insurance and no ability to pay for care at all will still receive treatment in America.  The true problem then in the system is the unnecessary financial burden that is forced upon those who do pay.

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Another large cost in the industry, according to Dr. Girgawy, stems from the way in which Americans view the value of life itself and the rights that come with it. We believe that people should be at liberty to do whatever they wish to pursue their own happiness and quality of life as long as it does not harm another. Most of us  value our lives and are willing to spend money to better it, and in some cases save it.  Is it worth the cost for an eighty-five year old man to receive a new hip transplant when his remaining years are so few? Maybe, or maybe not – but I sure want to be able to decide for myself when I am eighty-five. What about that costly CT scan that the doctor recommends when I think it is only a headache but he says it could be a brain tumor? If I value my life over my money I would probably have the test done. Most of us can agree with these feelings, and thus Americans spend lots of money on unnecessary tests, procedures and treatments to make sure they are living long and living well.  It’s a classic case of “I like having that freedom, but I don’t like you having it” thinking.

Many people today advocate nationalized health care such as that which is offered in countries like Canada, Italy or France, but this model does little to address the root problems while placing additional burdens of higher taxes and heavy regulation to the public. Supporters of such a proposal do not believe that some should receive better quality than others simply by the size of their pocketbook, but the principle difference is not whether we believe in favoritism but whether or not one views quality health care as a right or a privilege. If a man, walking alone on a country road, falls and injures himself, does he have a right to receive treatment from the first person who comes by? If someone should discover this man and attend to him is it for any reason other than his own good will and generosity? Is he under any obligation other than that of his own moral motivation? Therefore I believe that treatment of illness or injury is not a right but a privilege. One does not demand it – you either make a trade agreement or you receive it as a charitable gift. Those who receive care through insurance are from the former camp, while those who receive it off of the taxpayer’s dime are of the latter – although a tax can hardly be called a charitable gift.

In addition to this argument against nationalized or socialized healthcare it is important to heed the implications of such an arrangement. When government assumes the financial responsibilities of something it also assumes control. When the decision concerning that hip replacement comes into question we can be sure that with an honest cost-benefit analysis conducted by a bureaucrat in a distant federal agency and measured by a blanket policy guideline, the odds are against it. One must wonder what quality of care, facilities and equipment would be offered by taxpayer money – think DPS offices and public schools –  or whether the best physicians will have incentive to use their talents in a system that not only refuses to reward them, but makes it near impossible for them to make their own judgments about the best treatments for an individual without the heavy hand of government calling the shots from the corner of the room. We have enjoyed a fast, efficient, accurate, ever-advancing and relatively comfortable health care industry in America – a trend which I believe will cease abruptly upon any change to nationalize it.

While this proposal would surely be accessible, it would no longer retain its quality, thus it is an even trade from one broken system for another, and either way we still have the middle and upper classes paying for the treatment of an ever-growing class of government-dependent “professional patients.”

If nationalizing the health care industry solves one problem and creates another it is because it does not address the root of the problem. As I have pointed out, the true victims of our fractured system are not the underprivileged, as they receive the benefits of it without having to pay into it. Instead the burden lies on moderate-income families, and the true objective in “fixing” this system requires a four-fold plan. 1) Reduce the sheer number of individuals who receive free treatment; 2) Reduce the cost involved in treating these individuals; 3) Address the root causes of illness and injury in America; and 4) Apply reasonable regulations to the major players such as pharmaceutical and insurance companies to reduce price gauging. While I support free-market principles, it is important to consider that patients often do not understand the details of their conditions and what treatments are available and appropriate, and perhaps most importantly, they often have no idea what a fair market price is for such treatments. In an industry with this level of consumer ignorance there must be some sort of oversight protection. Free-market principles only work when consumers have leverage, which is too often not the case when it comes to the medical industry.

A summary of the plan which the Obama administration is proposing is provided from the whitehouse.gov website. The plan is to address the healthcare crisis with the following steps. For each one I have identified the winning and losing party and whether or not I consider it a good, fair, or bad policy, depending on whether or not the root problem is being addressed:
Require insurance companies to cover pre-existing conditions. (Insurance companies will pass added cost to customers, resulting in fewer insured citizens. No one wins. Bad policy.)

Provide tax credit to small businesses who offer health insurance to employees. (Essentially, taxpayers are funding the insurance. Low-income employees win, mid to upper income employees lose. Bad policy.)

Allow the federal government to cover part of the cost of businesses so they can lower premiums. (Same concept. Taxpayers foot the bill again. Low-income employees are the only ones who gain while everyone else loses. Bad policy.)

Prevent insurers from overcharging doctors for malpractice insurance, and invest in methods of reducing medical errors. (This is too vague to judge, but if done properly it could be a fair policy.)

Require large employers to make a meaningful contribution toward employees healthcare. (What is “meaningful?” This isn’t even passing on taxpayer money, it is simply forcing companies to pay out, which they will after a round of layoffs and a reduction in salaries. Bad policy.)

Establish a National Health Insurance Exchange with a range of private insurance plans and a new public plan modeled after that which members of Congress receive. (If the private insurance plans are managed independently of the government this plan would be fair. The fact that the only government offered plan is one that congress receives makes it a bad policy. We should be trying to reduce costs, not handing out expensive policies on the government dollar.)

Provide a tax credit to cover premiums of low-income patients. (Again, taxpayer money to pay for low-income treatments. More of the same. Bad policy.)

Lower standards of medicines from other nations. (I cannot be sure exactly where our standards are today, but if cheap medicine does not work it is only an added expense. However, there is not enough data to judge the policy)

Use generic drugs in public programs. (This reduces the cost of what would likely be treatment to low-income patients. Good policy.)

Take on drug companies that block cheaper medicines from the market. (Drugs require incredible amounts of money to research and produce. If regulations can be passed in such a way that still allows drug companies their due profit I may say it is a fair policy.)

Require hospitals to collect and report health care cost and quality data. (This could be a helpful step in making the industry more efficient. However, it is an added cost to hospitals and may invite the public into cost-benefit debates that stunt the industry. Fair policy)

Reduce cost of catastrophic illnesses for employers and their employees. (Everyone would receive benefits from this, but it is not necessary that the federal government initiate it. Employers could easily create company-wide insurance funds just as some companies do today, such as Starbucks. In the end the government is simply forcing the program on companies who may not want it and expanding its own power unnecessarily. Bad policy for the sheer arrogance of it.)

Increase competition in insurance market by reducing anticompetitive activity. (While this is vague, the principle of increasing competition is attractive. This is the same reason that we do not allow monopolies. However, implying a more invasive government with a lack of details makes me hesitant. Fair policy.)

Obama’s plan includes a couple of great ideas if they are executed with caution and moderation. However, he does not hesitate to display his belief in government to solve all of man’s problems and his desire to expand government power to tackle them. Therefore I have little reason to believe his approach will be moderate or cautious, and every reason to believe that his plan for rescuing America from its healthcare crisis will leave us no better than before, but rather worse, as middle and upper income families unwillingly hand over an even larger percentage of their earnings to pay for free treatment of others.  The policies summarized above are more of an attempt to redistribute wealth than to fix the problems that plague our system.

To evaluate whether Obama’s plan will have any positive influence on the crisis I will refer back to the factors which I have previously outlined. To what extent do these proposals reduce the number of individuals who receive free treatment? Not at all. In fact, it is likely to increase them. Does it reduce the cost involved in treating these individuals? Perhaps slightly by using generic drugs, but providing a top-quality insurance plan such as that which congressmen enjoy leads me to believe cost reduction is unlikely. And what of the third factor? Does Obama’s plan address the root causes of illness and injury in America? No. But to be fair, the only true way to do so would be to control people’s actions and lower risky behavior, which is already done to a reasonable extent by government agencies and sin taxes. Lastly, does the plan apply reasonable regulations to the major players such as pharmaceutical and insurance companies to reduce price gauging? Definitely! Perhaps there is no better single area where expertise and enthusiasm abounds in the Obama camp than that of government regulations and capping profits.

I would not call this a thorough plan of action. It is an ideologically one-sided approach where nearly all significant benefit goes to low-income families at the expense of everyone else, and only slightly reduces the overall cost of healthcare in the United States. The semi-nationalized nature of the plan opens doors for larger and more powerful government – always a bad play in my book.

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Many in the middle class are being sold the idea of lowering their cost by simply voting money out of the pockets of the rich. The only real solution is to lower that burden and allow the insured and uninsured to be served separately…

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What then, is the solution? While I could not possibly claim to be an expert on the medical industry there may be other options by which we can achieve each of my four objectives for a cheaper and more economically just system.

First, we have to be honest about the nature of any society. In any random group of people you will have some that are educated, motivated and talented. They will excel in nearly anything they put their passions to and will likely be both financially secure and happy with their work. The majority of the people will be moderately educated, and will display enough skills to hold a good job and take care of their families, but they would like to have a little more financial freedom. Then there is a relatively small percentage that resists responsibility and depends on others to get them through life. If they have any skills they fail to apply them. It is difficult for them to even hold a job, much less a good one. The reality is that these different types of people will always be with us, and no social program will change that. So to approach the problem of too many people using the system without paying for it is a difficult one, unless you simply turn them away. But most of us agree that basic and essential needs should be taken care of.

Part of the solution to the first problem though, is attacking the second. My proposal would be to eliminate free visits to expensive hospitals that are traditionally paid by insured patients and provide a way for the uninsured to be treated at a significantly lower cost. Opening government-run clinics in low-income areas would accomplish this in a way that would combine bi-partisan ideas by serving individuals in need through fiscally responsible means. These clinics would be designed from top to bottom for the exclusive purpose of providing outpatient care at low cost overhead. They would use older equipment and generic medicines, and would be staffed with medical students, nurses and volunteer physicians, with only one head doctor for supervision and consultation. Patients using the facility would understand that the care they receive will be lower quality and comfort than that of private hospitals, but their treatment will be free of charge. Private hospitals will be given federal funding to add a public healthcare wing to their facilities, which will treat those who require overnight admission. Again, it will be staffed and equipped at a significantly lower cost, with few of the comforts and pleasures that are available to regular guests. Hospitals would receive tax credit to cover the cost of treating patients in the public healthcare wing. It is unlikely that people who can afford better quality healthcare will be interested in using these clinics, thereby providing a means-tested welfare mechanism. In addition, these clinics and the doctors that work with them can be provided protections against the abuse of medical malpractice suits, further lowering costs.

The second major step in reducing all healthcare costs would be to work closely with pharmaceutical drug companies to lower the prices of high-dollar medicine, and to relax medical malpractice regulations and rewards to discourage lawsuit abuse across the industry to bring down the cost of physicians insurance. These changes will spur a drop in prices for every doctor visit and every prescription.

By implementing these plans we could drop the cost of treating low-income citizens considerably, and lower the cost of general healthcare to middle and upper classes via lower out-of-pocket expenses, lower insurance premiums and a lower tax burden. The result would be that as insurance drops its price tag, more Americans will be able to afford health insurance. There would be no need for a government health plan, as the public clinics would make it unnecessary.

Much of the illusion of our broken system is that it is inaccessible to the uninsured, but I have found that not to be true. The question is not whether a person can be treated, it is who is going to pay for it? Our current system creates an enormous burden on the majority of the population while the minority receives costly treatments for free. Many in the middle class are being sold the idea of lowering their cost by simply voting money out of the pockets of the rich. The only real solution is to lower that burden and allow the insured and uninsured to be served separately, with facilities and staff that are managed for the purpose of providing basic care to those who cannot pay for it. Combined with lower costs throughout the industry this plan could build a more affordable and more efficient healthcare system in the United States without damaging the private healthcare system and without raising taxes on U.S. citizens.

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