This is part 3 of my article on The Health Care System.
Most of this information comes from articles written by the Flint Hills Center for Public Policy located in Wichita, www.flinhills.org, and 1-316-634-0218.
My first two articles gave a brief history of how we have arrived at our current system of health care and who pays for it. I find it interesting the problems that we Americans faced after WW 2 are still with us in some form or another, but now affects a whole bunch more people.
Consumer-Driven Care Lowers Costs
There are two operative models for health care reform. The first is more government spending, This has been the goal of politicians, government agencies and lobbyists intent on providing universal health insurance and the rationing of health care. The desire for universal health insurance stems from legitimate fears; a growing uninsured population, high cost of coverage, the denial of private coverage for all manner of preexisting conditions, and the slowing of employer provided insurance by large employers.
In their considerations for health care reform, however, too little attention is given to consumer-driven reforms, which should not only reduce costs of care, but also empower individuals, transform the way health insurance is delivered, and allow for price transparency. Part of the reason is structural: the system has no real imperative to change, even though most practitioners, politicians and stakeholders will tell you the system is broken.
We could change the tax code to favor individuals and consumers not the providers and employers. We could change the tax code to allow individuals to get the $10,000-15,000 deduction (not credit) and you will empower a consumer-driven health revolution.
Make health insurance actual insurance. Most states require automobile drivers to purchase auto insurance. This insurance covers liability, collisions and other practical considerations, which impinge on our ability to afford repairs after accidents. Homeowner insurance works the same way-if a tornado strikes your home you are covered. Insurance is about covering risk.
As the postwar era it was routine to cover doctor visits and routine health expenses, But why should it? When you take your car in for repair or an oil change you don’t expect insurance to cover it. When you paint your house, do you expect insurance to cover the paint job?
I know a doctor visit is not the same as an oil change but the principle is the same. In one goes to the doctor for the flu or a scheduled check-up, why should we want insurance to pay the bill? Indeed the cost and bureaucracy associated with insurance paperwork is in part one of the biggest cost increases for doctor’s offices. If individuals paid up front for services without insurance, the effect would be to lower costs-less processing of insurance paperwork would reduce the number of employee hours dedicated to bureaucracy, reduce staff, and lower the cost of care.
Health Savings Accounts (HSAs), which offer high deductible health insurance for individuals and families, are one way to get at the problem. If one goes to the doctor and has a HSA you pay from that account. You are paying with money you had saved. Thus you will spend it more wisely, after-all it is your money you are spending not some third-party payer’s money.
Ethical philosopher Garrett Hardin gave a name to an old idea that is called “The Tragedy of the Commons”. In an article published in Science, in December 1968, Hardin used the example of Boston Commons, and described how when everyone owns one resource; it is most generally overused.
The example he gave had to do with sheep grazing in colonial times. Since no one owned the property; it was used in common by the community, and no one was responsible for maintaining it. Thus the sheep overgrazed and ruined the land. No one had a stake in the common area being conserved for future needs because no one individually owned the property.
The tragedy of the commons principle applies to health care as well. When someone else is paying for a service one is less responsible for how the service is used. If one receives insurance from a third party payer, whether that payer is an employer, government entity or a private insurance company, one is less responsible for how that insurance is used. Conversely when one is responsible for the cost of health care one receives, one will use that care more responsibly.
We need to take a hard look at promoting wellness such as to incentivize employees to quit smoking, either by offering raises or bonuses if it can be proven that one has stopped smoking, or to disincentivize by requiring higher insurance premiums for those that continue to smoke. Or perhaps a more radical approach, that requires those who smoke to pay health insurance out of their own pocket and they may quickly see the benefits of kicking the habit.
The same concept could be used to address, physical fitness (health club memberships) and weight loss.
One of the central reasons for higher health insurance costs, and thereby lack of access to insurance among those who cannot afford it or choose to not purchase it, are the mandates placed on insurance companies by states. This includes services for a variety of illnesses such as bone mass measurement, maternity coverage, mental health coverage, oral surgery, physical therapists and chiropractors and many more, Kansas had 37 mandates as of 2006.
There is certainly much more to be debated before the answers to health insurance are provided. Do we want the same entity that provides us the compassion of the IRS or tax assessor being the one that decides what health insurance we have? Let me know what you think. What would you do?
I consider it an honor and privilege to be your State Representative in Topeka, I can be reached in person or at home 1115 Rim Rock Road El Dorado 67042 316-321-2087, or johng@carlisleinc.net, grange@house.state.ks.us, or my website www.johngrange.net. Thank you, John.
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