Wednesday, August 19, 2009

The Myth of 'Universal Health Care'

The primary axiom of economics is "There is no such thing as a free lunch." In other words, you can't generate something from nothing, and everything has costs, either in money, time, or lost opportunity to pursue other options. This is like the law of gravity -- dependable, reproducible, and utterly immutable.

How then, can those advocating "universal health care" declare that a government-run health care plan in the United States will be a panacea fixing all ills of our system while having no downsides? Let's look at it in detail. The current health care reform proposals which include a government "universal care" option are said by the proponents to:

1) Cover 46 million additional Americans (by the advocates' count);

2) Increase the standard of care;

3) Reduce costs.

Let's take these in order. First, 46 million newly covered persons. Given the current US population of approximately 320 million, if we do the math we find that the newly covered adds about 17% to the total number of people with health care coverage. This is where the trouble starts.

Most analysts agree that there is a shortage in health care professionals in the United States. Lab techs, nurses, physicians' assistants, and particularly doctors are in somewhat short supply, particularly in rural areas. So we can assume that increasing the patient rolls by 17% will aggravate this problem by approximately that same amount.

So now we're at (2). How exactly do we increase the standard of care by increasing the patient-to-doctor ratio? That seems counter-intuitive at best, and wholly dishonest at worst. You can't get the same standard of care, much less better, with a smaller relative force of healthcare workers.

The partial answer to "universal health" advocates, is (3)...cost reductions. unfortunately, the current bills "recover costs" by raiding $500 billion from Medicare, and raising taxes another $500 billion or more on those making over $200,000 per year. So, we're saving money by spending more and taking money away care?!? In what universe does this make any sense?

To make matters worse, the Congressional Budget Office, the arbiter of what things actually cost in congressional bills, has little good to say about any of this. They anticipate $1.6 trillion in costs over the next ten years. The savings in "preventive care" envisioned in the bill are actually determined by the CBO to cost more. This is because, for example, if you screen a thousand people using a $3 test to catch a problem that costs $10,000 to fix, and two of them have the problem, you've spent $10,000 more than if you just spent the $20,000 to fix the two people that actually have the problem. Preventive care only works if it specifically targets people actually at risk...which is what doctors do now.

Additionally, there is a lot of data suggesting that the 46 million number of uncovered people is misleading. Up to 16 million of them are young people that choose to not buy insurance because they simply don't think they will have health problems and don't want to incur the expense. Another 16 million or so are people who could afford insurance yet choose not to buy it, either because they don't want the expense, or choose to be self insured through savings or medical savings accounts. That leaves about 14 million people, or about 4.5% of the population. So we're going to go into crippling debt and risk the quality of health care in the US in order to cover less than 5% of the population? That's fiscal insanity.

What proponents of "universal health care" actually advocate is universally poor health care. Rather than have a general population with an excellent standard of care, but with some issues, they'd trade for a substantially lower standard of care for all. The fact is, we already have universal health care in the USA. By law, no person in the US is denied life-saving medical care, regardless of their ability to pay. Not every person has health insurance, but all have access to health care.

It's obvious this debate is not really about health care, but rather is about control. Who will control your access to health care? Will it be you, based on your interest in your own health and your willingness to pay for it? Or will it be a bunch of government officials deciding what is best for you, with or without your consent? It's clear which direction leads to the most freedom, for patients, doctors, hospitals, and all the health-related businesses that create jobs and value to the patient. Choose wisely.