Recently I sent an e-mail to a number of friends describing one person's experience with the overly bureaucratic healthcare system in Canada. Recently, in response to intractable problems in the public sector, Canadians decided to allow a private option. One response in particular stood out; it was brief but contained the core of the Democratic argument for Obamacare:
This is not the experience of the many associates I have in Ontario. If this claim is legitimate I feel for this fellow. No system is perfect. Our system is discriminatory and not available to all. The quality of our care is also not necessarily world class overall either.
First of all, the comment that "our care is also not necessarily world class overall either" is simply incorrect. There are reasons people form around the world come to America for care that they cannot receive at home. But leaving such notions aside, there is much to agree with in mu friend's brief note. It is a banal truth that "No system is perfect." If that were the end of it, there would be nothing t o discuss. However, the idea that "Our system is discriminatory and not available to all" is worth parsing.
I do not know what my friend means by claiming our system is discriminatory. If by discriminatory he means that not every person can have access to any Doctor, I suppose there is some obvious truth to that. Otherwise I am at a loss. No one can be turned away from an Emergency Room. No one is denied Medical care because they lack the means to pay. Certainly, if someone has enough money they can afford to go to the best institutions and the most renowned Doctors (who often do not accept most insurance.) People routinely go "out of network" for care when they are dissatisfied with their treatments. Because their insurance premiums have been held down by using only approved in-network Physicians who accept lower fees for the privilege, the patients are expected to pay a premium to go out of network. This, however, is hardly discriminatory except in the most literal meaning of the word. Again, I am at a loss to understand what is discriminatory about American Medicine.
It seems to me that the issues we should be addressing when examining our healthcare system are two fold.
1) How do we allocate scarce Medical resources?
2) How do we expand most rapidly the pool of scarce resources?
Those who propose wholesale reform of the healthcare financing system are making a systematic error. Obamacare treats the healthcare pie as a zero sum system; they assume that the healthcare pie can only expand very slowly and that resources will remain limited forever. For that reason none of the proposals in Congress address the supply side of medical care but only the demand side. In fact, by attempting to expand the pool of patients for whom healthcare will be divorced from the actual cost of their care, the current plans will make the scarcity far worse, and permanent.
Were we to address Problem 2 and work on ways to increase the size of the pie, we could ultimately make healthcare more affordable and more available.
For example, there are a great many very bright young people who would at one time have been planning careers in the financial industry who are now faced with the necessity of changing career paths. Many of them are quite talented in math and science (Physics PhDs have had an affinity for jobs as Wall Street "Quants") and could become Doctors, Nurses, and other healthcare professionals. The problem for the brightest, best students, is that going to Medical School means facing up to a $200,000 debt as an entry fee to a field where the compensation is being pared away year by year. Obamacare will make this worse; fees to Doctors will have to either continue to decrease of fail to keep pace with expenses all the while the Doctors are expected to see more and more patients. This is a formula for less Doctors, not more.
Beyond the supply of Doctors, there is the fact that healthcare is becoming an Information Science with all the implications that that has for the price curve. When any technology become an Information technology, the price of new developments always starts out very high, available only tot he wealthy, early adopters, and soon makes its way down the socioeconomic ladder. The first cell phones were prohibitively expensive and barely functional devices. Now they can be made so cheaply that you can buy a disposable phone for a dollar. New medications start off very expensive (much of the expense caused by our overly conservative regulatory regimen) and rapidly descend in price. When Lipitor was first developed, it was available to a limited number of patients; now Statins are available to anyone who might need or benefit from one.
Where the proponents of Obamacare make their error is to assume that fairness requires that we upend a system that works for most people and provides innovation that makes the lives of everyone better. There are many tweaks we should entertain before deciding on wholesale changes that will make the system function less efficiently and, as a bonus, damage the prospects of innovation. If I were convinced Obamacare would be efficient, fair, and increase innovation, I would be fully supportive; if anyone can tell me a government program that has increased efficiency, fairness, and innovation, I'd be delighted to hear of it. It would be a first.
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