Sunday Editorial: The big pool
He didn’t come to St. Louis to walk the fault line in modern medicine. But that’s essentially what happened when Sen. Barack Obama, the presumptive Democratic presidential candidate, visited with cardiac patients at Barnes-Jewish Hospital last week.
Cardiac care units like the one he toured are where the incredible technological prowess of modern medicine comes face to face with some of its most fundamental and intractable problems.
One of those problems is cost, and cost was at the center of Mr. Obama’s public remarks, and of the Republican response. Mr. Obama touted his voluntary national health insurance plan that he said would make care more accessible and affordable to millions of middle-class Americans. His presumed opponent, Sen. John McCain of Arizona, has criticized Mr. Obama’s proposal as expensive and unwieldy.
But without reasonably good health insurance, the cost of the medical miracles that are performed at cardiac centers like the one at BJH are out of reach for a growing number of Americans.
Americans spent a collective $76.5 billion to treat heart problems in 2005. That’s more than the combined total spent on diabetes, high cholesterol and infectious diseases such as AIDS.
The largest single share of spending on heart problems, $48.4 billion, was for care delivered in a hospital. That covers some of the most dramatic procedures modern medicine has to offer, and also some of the costliest.
On the day Mr. Obama made his Barnes-Jewish tour, the journal Health Affairs reported that between 2003 and 2007, the number of people with inadequate insurance coverage grew by 60 percent. In total, researchers reported, 42 percent of U.S. adults are either uninsured or under-insured — that is, they have out-of-pocket medical expenses greater than 10 percent of their income.
Most of the newly under-insured are working families earning more than twice the poverty level, about $34,340 for a family of three. Many became under-insured when their employers’ health benefit plans began to impose higher deductibles and greater cost-sharing.
Higher deductibles and cost-sharing are exactly the kind of changes that conservative groups and Mr. McCain tout as cures for runaway health spending. Mr. McCain would encourage more people to buy health insurance on their own, instead of getting it as a benefit at work. He also champions medical savings accounts that make people responsible for a bigger share of health costs to reduce “unnecessary care.”
But as Mr. Obama no doubt saw during his visit to Barnes-Jewish Hospital, not much “unnecessary care” goes on in cardiac care units. Patients there are very sick; the care they receive is a life-saving necessity few could afford on their own.
The real effect of higher deductibles and greater cost-sharing is to make people delay getting care until their health problems are more advanced — and, therefore, more difficult and expensive to treat.
Insurance works best when it allows the greatest number of people to pool their risks. Not everyone has the same degree of risk. But they receive the same protection. That’s why a national health insurance program like Medicare makes sense.
Mr. Obama’s plans falls short of that. It wouldn’t provide universal coverage, for example, which is where real economic efficiencies occur.
But his idea of widening the insurance pool and protecting the growing number of families who face economic disaster should serious illness strike is a big step in the right direction.
(J. B. Forbes/ Post-Dispatch photo)
Because we don’t have unlimited money, and we’d all like to live forever, healthcare will inevitably be rationed somehow. The question is, how will this happen? Under the Democratic plan, as with all “universal” plans, rationing will be determined politically. Under Republican plans, it will be done by the market.
Certainly, modern medicine has performed many a miracle. Cancer, strokes, and heart disease, all killers half a century ago, are largely treatable diseases today. Because of this, we are living longer than ever, and bankrupting our healthcare and social security budgets in the process. If we are going to provide universal health insurance, we’ll need a 20% income tax surcharge and a social security retirement age of about 80. Plenty of politicians want to give away free healthcare. Is anyone willing to give away a dose of reality with it?
When liberal editorial writers start comparing how much we spend on one thing versus how little others have, it makes me very nervous as that will be the analog for how socialized medicine will work. Sorry, we’re spending too much on bypasses for old folks and we need to spend more on prevention for young folks. So, we will now have to ration bypass operations. Everyone knows, although no one wants to admit that rationing is the only way it can work. You can’t jam ten pounds of …something…into a five pound bag.
That notwithstanding, insurance pools are a good idea. Jim Talent spent his entire career in Congress trying to pass it. I am all for free market solutions and government intervention should be used only when the free market cannot, for whatever reason, do the job. The free market is incapable of providing insurance to those who cannot get insurance. Example: a fifty year old with cancer. The price would be out of reach for most people. Can you blame the insurance companies for not wanting to take a customer knowing they are going to face huge losses? So, the free market in this situation does not work. Allowing high risk patients to pool under the direction of the government, but possibly administered by the private sector could be a way to solve this. No one should be forced to become bankrupt because they lost the lucky gene contest.
My big question is whatever system we move towards is whether a private system will also be permitted to exist side-by-side as is the case in the UK. There, private insurance accounts for about 40% of the population. Without it, the other 60% could not be covered. The NHS system there is pretty bad. The private system is excellent. There are private hospitals, surgery centers, and public doctors are allowed to work a day a week privately on which day they make the bulk of their incomes. I am very interested to see if the neosocialists will allow us to have a two-tiered system, one being better than the other based on ability to pay, or whether they will demand everyone enjoys one crappy system?
Flyover - The 50 year old with cancer would be covered if he had insurance before the cancer struck. That is the very purpose of insurance: To pay for unanticipated, catastrophic events. The problem is, people want to say, “I’m healthy, I don’t need insurance” and then purchase insurance coverage from their bed in the cardiac ICU.
For those on the left who don’t understand how insurance works, let me explain: Most of the insured must pay premiums which exceed the cost of their claims. The degree of this excess depends upon the actuarial experience of the group, which depends upon who you allow into the group and what sort of benefits you pay. If you have mandated coverage and prohibit exclusion of preexisting conditions, many healthy people will wait until they get sick to purchase coverage, freeloading off the group, and driving premiums much higher. The left’s answer to this, of course, is to require that everyone have health insurance. That results in two problems: First, some truly can’t afford the premium, and second, some would rather spend their money on other things.
Ultimately, the left’s answer to this problem is government paid universal coverage, with deductibles and co-payments set at a very low level. This is popular amongst the constituencies of the left, who are always happy to have “somebody else” pay. But it takes away the right of every American to choose what sort of healthcare they want to purchase, and moves health insurance coverage from the economic to the political arena.
Nick,
I agree if the 50 year old had insurance, he’d be covered. However, many people get sick and cannot work and COBRA coverage only lasts 18 months. Or, what about someone who was laid off? You know how this country discriminates against white males over 50, it is nearly impossible to get a job, so you wouldn’t have insurance. Say you were laid off, during that period, you were diagnosed with cancer, no insurance company will accept you at that point. I agree there is a lot of controversey about how many people are uninsured. I agree with you that many healthy people in their 20’s would rather spend the money on vacations, etc. and I am not talking about them. I also realize a large number of the uninsured are illegal aliens. That is why I favor, once we secure the borders, that any program to admit foreign workers be coupled with a rule that requires their employer to provide at least some base level coverage, otherwise, we are all subsidizing that employer. I am in complete agreement that those who can afford to buy insurance ought to buy it. I am not concerned about irresponsibility. I am concerned about protecting people who cannot get insurance under any circumstances dur to an illness that is beyond their control.
In 2006 according to the census bureau the federal government spent $1.16 Trillion on social security, medicare and medicaid. The one year increase of spending on the three averaged $170 for every person living in the US.
We all know that no other country in the world spends dollars on 90 year olds like the US.
We know that no politician is touching the growing deficits in medicare or medicaid. They wouldn’t get elected if they did.
We know that actuaries are telling the 40 year olds that they will not get back in dollarswhat they are paying currently in payroll taxes.
It is easy to talk about universal healthcare when you print money to cover deficits and the politicians don’t tell the 60 percent who are paying what the costs will be. Do we want to put ourselves at the mercy of the government without the costs being spelled out?
Since the hospitals are non-profits making obscene profits,which is taking tax dollars out of the government pool, why doesn’t BJC just pay for the operations for the uninsured. Isn’t that the way the non-profit part is supposed to work. And that doesn’t mean they can make poor people go bankrupt and put in on their credit cards, just pay for it. Period.
For that 50 year old man with cancer whose COBRA just ran out, he can get coverage from the Missouri Health Insurance Pool. The pre-existing condition exclusion is waived if you go directly from your COBRA plan to MHIP. Premiums for a 50-54 year old range from $529 to $1,003 a month, depending upon deductible.
Flyover…
Guaranteed, it will be two-tiered. Catastrophic coverage for everyone and better coverage for those that can pay. What better approach would exist?
Nick…
It always amazes me that the right thinks it is the only side that has economic ‘revelations’ or understanding. Quit parsing. It depends on the person. It’s not to hard to figure out.
I used to cover the hospital beat as a print reporter. How much do you think is added to health insurance costs due to excessive duplication of services and equipment between hospitals?