A THOUGHT ON HEALTH CARE
By Publius II
The nation’s vast middle class has failed to make much economic progress over the past two decades. Much of the blame can be laid on cost inflation in a health care system that today obliterates close to 18% of GDP or $2.5 trillion. In 1960 health care ate up 5% of GDP or less than a third of today’s bite.
That huge lump of money has delivered the following grim results. There is an obesity epidemic. This ailment leads to diabetes and several other serious diseases, some of them chronic or life-threatening.
A little-known cause of this epidemic lies in the fact that away back in pre-history people had very little to eat. Whenever it was available they gorged. Today food is everywhere, but the tendency persists.
Anti-depressants and many other chemicals are a multi-billion dollar industry. Infant mortality, life expectancy and survival rates for heart attacks are worse than the OECD averages (30 richest nations).
The unpublicized big kicker is that the system does not deliver health because it is not designed to do this. What it does deliver is helping nature to cure illnesses and repair injuries, and it does this with inexcusable lacks of efficiency (cost) and effectiveness (quality). There are several reasons for this situation.
The first reason concerns inefficiency. People don’t know what they are really paying for care. A combination of ignorance and feeling miserable tempts sick or injured patients and their doctors to order the steak and lobster when a plate of beans would often do just as well. People of average means who would not think of ordering this combination in a restaurant do not hesitate to do so when sick.
About 84 cents of every dollar is spent by either an employer, an insurance company or the government. No prize for guessing where these funds come from. Employer payments deduct about 8% from each worker’s wage. Whether sick or well, insurance premiums go from worker to company. He/she also pays deductibles and co-payments: the other 16 cents. And then there are the eternal taxes.
In 2009 the average per capita total cost of health care was about $6,950. The patient who orders the steak and lobster is not out-of-pocket 84% of this, or $5,838, but he/she pays it anyway. Those people who think they like the current system might want to think again. Many are doing this, which is encouraging.
A second reason lies in fee-for-service medical care. The more tests, drugs and procedures doctors order the more money they make (earn?). Not only this, but many live in fear of malpractice lawsuits, which causes them to order still more chemicals, procedures and devices. And many if not most of these extras do nothing to cure or even cause improvement in patients’ conditions.
A third reason lies in politics, which all too often ignores economics. The Center for Public Integrity has shown that Big Pharma’s lobbyists have dragged money bags containing over a billion dollars into congressional offices during the past 15 years. This mass of dirty money has bought big drug companies practically every unearned special advantage in the marketplace that they wanted. Put plainly and simply, this is rotten corruption. Current reporting on the health debate almost never mentions this huge barrier to progress in getting a useful bill passed.
In Today’s Washington dirty dollars outvote citizens roughly 250 times over. The Center predicted that Big Pharma would cause a blizzard of bucks to invade congressional offices aimed at stopping any real action toward reform. And this is just one industry with an interest in maintaining the status quo. Another fierce lobby is the American Trial Lawyers Association, which will fight tort reform (would make medical malpractice suits rare and reasonable) with megabucks.
A fourth reason can be found in the health insurance industry. The principle that supports insurance has policy holders self-insuring minor accidents or illnesses while contributing premium dollars into a pool. The insurance company invests the money in safe securities to help the pool grow. When unanticipated and catastrophic events happen that holders can’t handle the pool is ready to help.
Today’s health insurance industry thrusts itself into every routine office visit, every prescription drug and every procedure no matter how trivial. Because different companies have different ways of handling claims there are battalions of workers shuffling paper, feeding data into computers, producing and checking records, correcting mistakes and who knows what else. This is expensive.
By definition government is force. In 1993 Hillary Clinton pushed what came to be called “Hillarycare” hard. The first lady was determined to see that every citizen had coverage, even if she had to force-feed millions of them.
The late and former presidential candidate Harry Browne in his book Why Government Doesn’t Work described this health care debate. Compassion, right, and fairness were mentioned frequently. But he said, “——– I never heard the words force or coercion in public discussion ——.” He examined the Health Security Act and found the word prison mentioned 7 times, penalty 111 times, fine 6, force 83, prohibit 47, mandatory 24, limit 231, obligation 51 and require 901.
Against this background citizens found the melodramatic President Obama wading in with grand speeches as he took it to the people. He staked a large portion of his dwindling political capital on a solution to the health care problem. No one denies there is a problem. But he used a rhetorical flame thrower to attack it head-on. Publius II thinks his aim is inaccurate, and he is obviously not alone in this.
Mrs. Clinton and her army of pushers used a top-down, one-size-fits-all approach to the problem. They interviewed citizens, nearly all of whom objected to some parts of the proposed Act. Eventually it went down. Today’s opposition is again not limited to the lobbies. Citizens also don’t want top-down care forced on them. Apparently the Hillarycare experience has taught them a lesson.
In spite of this truth the president and democrats in a seriously split Congress have become force-feeders. Small wonder their political capitals are headed south.
The kicker here has been accurately described by the Economist (6/27/09):
“The problem with Congress is that it is a many-headed monster, ill-suited to making hard choices or producing neat solutions. Individual members of Congress are more concerned with their own districts than with the future of the republic. The chairmen of committees are obsessed with defending their turf. The house is dominated by veteran liberals, who are well to the left of the electorate, and the senate is full of prima donnas.” Someone should ask where does public service fit into this disastrous scenario. Publius II is asking.
Due to human nature every citizen is interested in improving his/her life. Being healthy is an integral part of a better life. Therefore there exists an inherent behavioral incentive toward health. In fact, a trend in this direction exists in the culture today in spite of a “health care” system that is aimed elsewhere. Companies have gyms, marketers flog healthy ingredients in food, governments pass laws restricting smoking, etc.
Publius II’s recommendation builds on this trend because it delivers health to everyone who responds to the incentive. However, this means that a person should seize the initiative and not wait for some company to invent a chemical panacea or a miracle doctor to banish all ailments.
Or wait for BIG GOVERNMENT to force a top-down, one-size-fits-all miracle cure on the populace. Every body is different. But today’s system has a patient seeing doctor after doctor all too briefly so none of them have an opportunity to get to know that body as well as its owner. Furthermore a person’s health is like his/her religious belief: it is deeply integral to his being. Government does not do a top-down number on his religion. So how can it do one on health care?
So the focus of the recommendation is on the individual. The fact that the Constitution deals with individual rights and incentives is not a coincidence. This document was created by the Founding Fathers and then discussed and debated by the people before giving their approval. It belongs to the nation’s citizens and not the government. Only thinking people understand this vital fact.
Obamacare is an updated incarnation of Hillarycare. Now, there was indeed a huge amount of debate beforehand, and debate is a vital part of the democratic process. But was it really debate? Or was it just batches of cheap shots flying back and forth, much like two big flatscreen TVs tuned to different channels and facing each other with their volumes at the max?
Publius II’s new system would revolve around the individual person, who would compile a unique plan through exercise of the free choices that are part of democracy. It would include the ingredients of holistic health: body, mind, heart and spirit. The person would adjust these ingredients and the mix over time as his/her life continued to improve thru his own efforts. Pocket Gofer 1 elaborates.
Resources would be available, which would seldom resemble those available today. Individual decisions within the plan would be made to utilize which ones how intensively and for how long.
Because the recommended system has never been tried Publius II needs to speculate. However, in a democracy every new idea originates in a tiny minority: one concerned citizen. The only truth available now is that the system and its parts would evolve with the changing needs of its customers (not patients; the emphasis would have switched to health).
In any free market companies must remain competitive or fail. In the case of health the system’s components must provide customer satisfaction at a reasonable cost, meeting the competition and, finally, realizing some profit. (If a firm became unprofitable the taxpayer would not be forced to bail it out.)
Begin with the physiological, or “body” component. Discussion of suggested resources begins with a General Health and Fitness Company. Several would compete for the custom of a person or family by offering a contract that helps the customer fulfill his/her holistic health plan (body, mind, heart and spirit) at a competitive price.
The agreement would last for, say, three years after which a customer who is not satisfied would look elsewhere. This possibility would motivate the staff to work hard in order to keep that customer. Without employer involvement a change of job would pose no problem. Furthermore a typical worker would be paid about 8 percent more.
Potential customers would shop around for the best deal. Companies would actively recruit these people as well as provide the best care for existing ones. Professional and technical staff members would also be avid practitioners of health and fitness; no one can effectively sell a product in which he/she does not believe. Outstanding staff members would be paid very well lest they be pirated by the competition.
The contract would provide guidelines to educate the customer regarding holistic health resources. It would encourage the customer to treat minor ailments and injuries at home: “Mother knows best and nature does the rest.” In a healthy society most sickness and injury would be treated in this manner. Not just Mom: the Web and other social media are even today useful resources.
If in the judgment of the customer some professional attention is needed the GHF Company would provide a group of satellite clinics for this purpose. These could be profit centers in themselves or operate under contract to the GHFC, whose manager would see to it that clinical supervisors and staff are competent and customer-oriented. Customers would pay out-of-pocket for home and clinical care. This in itself would motivate people to stay healthy; it is absent today. Furthermore there would be no armies of bureaucrats shuffling paper.
A board of directors consisting primarily of company shareholders would hold both managers’ and supervisors’ feet to the fire. If either continues poor performance after warnings the only way for the company to remain competitive would be to fire one or both.
More serious problems would be handled at the GHFC. A pool consisting of premiums paid under contracts would cover most expenses, with the rest covered by a reasonable copayment. (Note that this arrangement fits the principle of insurance as described above.)
In a healthy society perhaps 70% of problems would be solved at home and another 25% at satellite clinics. Nearly all the remainder would be referred to a GHFC. Some of these customers would require a routine surgical treatment: for instance, a hernia. There would be specialist hospitals established for this type of treatment. Because they are geared only for this procedure they can do it exceptionally well and at about one-third the cost of the same at a GHFC.
Trips to GHFCs and specialist hospitals would be rare and inexpensive. The cost reduction would be substantial, to understate the case. Many if not most customers would pass their entire lives without once visiting a GHFC or specialty hospital overnight as a patient.
Satellite clinics would help customers maintain chronic illnesses. GHFCs could combine to provide funds for research toward cures for these and life-threatening illnesses. Research companies would compete for funds. Those that delivered results would attract more money. The mapping of the human genome, consisting of some 3 billion genes, is complete. Research will soon emphasize prevention and treatment of hereditary diseases by modifying individual genes in a customer.
Foundations would be established and operated to help churches and charities provide assistance to poor people. They would no longer clog the expensive emergency rooms of hospitals. Retired professionals could volunteer to help.
As time passes a successful GHFC would welcome healthier and hence fewer customers to its doors. Talented professional staff people and their assistants would find time on their hands. For any good manager this provides an opportunity to increase the number of customers. The additional revenue would more than cover cost increases. Therefore top talent could be paid excellent salaries and monthly premiums charged to customers could be reduced as the company became more competitive. A virtuous cycle would be established.
In contrast, a top-down government bureaucracy has no competition to keep it shaped up. It would seek to generate more patients so that it can write memos justifying still more taxpayer money, promotions and perks for bureaucrats. They thrive on problems and not solutions. There is no concern with cost control because they figure the taxpayer’s wallet has no bottom. Expanding coverage is all-important (as can be seen in the current Obamacare law).
Publius II’s recommended system seeks to save the customer/taxpayer money while the present system is a proven expert at taking more of it. President Obama has promised that the new government plan will be “budget neutral,” but he can’t stop bureaucrats from being bureaucrats.
Take Medicare, invented in 1965 by Big Government. In that year Congress projected its cost to be around $12 billion in 1990 dollars. The actual cost in 1990 was $98 billion and estimates in 1997 ranged up to $200 billion. Waste and fraud siphon off around $60 billion. Allowing for inflation, today’s seniors are on average medically out-of-pocket more than they were before 1965.
Physiological health naturally includes fitness. A GHFC would see that satellite clinics maintain gyms with full equipment and clean locker rooms. Customers would work with hired consultants trained in holistic health concepts to produce a plan which would change with increasing fitness and over the long term.
Consultants, websites, fitness periodicals and medical research people would combine to generate and update reams of information on the subject. Today’s resources include walking, jogging, swimming, rowing, canoeing, hiking, climbing, athletic teams, individual sports, weight training, etc. A customer would be encouraged to select a combination that he/she would enjoy.
Information resources would also include diet. They would help a customer eat a balanced diet consisting of food and drink that is healthy and liked. Such a diet should be varied and change over time with the changing needs of an aging body. An occasional steak-and-lobster holiday would be included if desired.
Old does not have to mean sick. While there are several countries where life spans exceed those in the US, citizens are living longer here. Today millions of seniors have been stashed in retirement facilities where nurses and assistants give each several chemicals daily. As a life this is not for much.
Even with family nearby (and many have not) oldsters living like this cannot help but feel useless. They tend to focus on the past while the world passes them by. Fenced off from the dynamics of today’s world they get grouchy. Relations with younger family members can become strained. Finally, in the future with longer life spans and baby boomers retiring there will be millions more of them than today.
Under Publius II’s recommended system these folks would on average remain healthy and fit well into their 80s, 90s and beyond. They would be found jogging through neighborhoods and doing many things done today by people half their age.
They would stay “with it” as the world changes. Not only this, but young relatives, friends and many others would be enthusiastically tapping into a fount of wisdom on offer. This wisdom would be shared with equal enthusiasm. (Note that the discussion is leading toward consideration of the heart.) Curmudgeons male and female would cease to be such when they have no time to get grouchy. Drugs? They would be mostly history.
A customer’s mind and heart can be discussed together. With a good education system a person could learn to like to think and learn. When this activity is fun the person would be motivated to continue thinking and learning throughout life. See PG10.
Imagine a 102-year-old student. A story about President Theodore Roosevelt has him going to the home of retired Chief Justice Oliver Wendell Holmes. When the butler showed him into Holmes’s study he found him reading Plato. Asked why he was reading Plato, Justice Holmes replied: “To improve my mind, Mr. President.” When this visit took place Holmes was 94 years old.
Furthermore a person could learn about him/herself. He would come to like himself (self-esteem, not narcissism). With this inner comfort he could more easily reach out in friendship to others, even if they don’t look, act, think or believe in ways similar to his.
This positive outlook would help him to believe that even people who behave foolishly are by nature good and want to do good. This attitude is critically important to the building and continuing success of democracy in any society. Attitudes don’t change overnight. But in a society consisting of citizens whose thinking is guided by the precepts of holistic health the potential for attitude change exists. People with the most diverse interests could be united in a common cause: maintaining and improving good government.
This is the attitude that is needed to cause the divorce, juvenile delinquency and incarceration rates to drop like stones. An educated person with this attitude loves him/herself to where he can truly love another, in large part because he knows how to receive through giving. Getting married is easy. Staying married is one of life’s great challenges. The illegal drug business would vanish along with today’s depression epidemic.
When turning to the spiritual component of holistic health the observation about beliefs (third paragraph above) comes into play. Some, perhaps most, thinking people see a difference between a religious person and a spiritual person. The latter attends a religious service occasionally or not at all, and yet through thinking and contemplation he/she may feel as close to a Supreme Being as does his/her religious counterpart.
In this environment the Islamist militant’s cry of “Death to the Infidel!” has no meaning. A person’s beliefs lie deep within him/her. Unless he chooses to broadcast them there is no way to identify an infidel. (This is not to bash Islam, which is a peaceful religion. The explanation why most terrorists are Muslim is another story. See PGs 11 and 18.)
Recall that every good idea originates in one concerned citizen. Similarly, every new religion or denomination begins life as perceived heresy. During the seventh century many reacted in this way to the advent of Islam, which meant that the peaceful Prophet Mohammad was forced to fight 2-3 times during his life.
Clerics in churches, mosques, temples, and synagogues would encourage members of their congregations to reach out in friendship to others of different beliefs in neighborhoods, communities, states, nations and thruout the world. Officials in good governments would encourage the same.
The aftermath of Hurricane Katrina is a good example. Some 100 years ago, when government had no extra taxpayer money, private individuals responded to disasters with open hearts and in good spirit. The Bush government did not respond immediately to the thousands who were in desperate straits after Katrina devastated New Orleans in August 2005.
When it did the bureaucrats fouled up the job. The lack of heart and spirit was not the difficulty. Rather, red tape and turf battles took priority over human lives. Private churches and charities rushed in and invited the bureaucrats to bug out so they could get the job done right. There is a lesson in this.
As stated in the beginning of this essay, health care costs $2.5 trillion today, or close to 18% of GDP. Speculating, the recommended system when up and running might cost 2% of GDP or $278 billion or $772 per person instead of $6,950. The extra $6,178 could be saved toward a child’s college education or for retirement. (Pocket Gofer 1 elaborates.)
In conclusion, the individual citizen knows better than anyone else what is good for him/her. Young ones may not, but good parenting, schools and religious institutions would provide guidance as a child matures. Without Big Government as an all-intrusive nanny and with institutions supporting personal freedom a young citizen would have an opportunity to make mistakes, learn from them, become fully adult, carve out his/her destiny and take responsibility for it.
The only other requirement would be response to an incentive that only democracy can provide. Today entrepreneurs find gaps in an over-regulated marketplace and seize the initiative to create new products, services and companies. They are responding to incentives. Pocket Gofer 1 shows how incentives toward good health can work.
The same would exist for everyone in the challenge of life in the new Land of Opportunity. Publius II prays for this society to become real. PG1 has details.