Originally Posted by Flames Fan, Ph.D.
re: US debt and healthcare spending
These two elements are intertwined and I think they make for an interesting discussion regarding society and policy.
The big push from the right in the US is to turn healthcare into a free market enterprise. This is embodied in policies such as Paul Ryan's voucher system and other little initiatives like selling insurance across state lines. Both policies are really a means to minimize any governmental healthcare spending without regard for public health. Yet for those who haven't delved into and investigated the proposals, they seem on the surface to be ways for people to "empower" themselves in regards to their health choices. For example, Ryan's voucher system is designed, by definition, to trail the rate of inflation in the healthcare sector, in turn pretending like it can put downward pressure on prices. This is proven wrong by simple history: people in the US are much more likely to not be able to afford healthcare, and they are overwhelmingly constrained by their budgets, yet healthcare inflation in the US has always outpaced simple inflation. So Ryan's plan is really just to limit government spending, period, without regard for healthcare; he'll just give people less and less money over time. Other initiatives like selling across state lines are similar dog whistles that allow the government to offload costs. Since states do not have any baseline requirements for healthcare policies, opening up cross-border policy shopping would simply mean that a healthy person would buy a $5/month policy from some state (probably texas) and this would suck up all the healthy policyholders. Those with congenital chronic diseases would be pooled together (and, in turn, apart from the healthy pool) and be left with insurmountable monthly premiums*. So really, those advocating for such policies are, at their root, advocating for government to completely shed any role in national healthcare in favour of letting the "market economy" handle it. If that's their motive, it's fine; if they advocate it in the sense of improving the system, then they're lose and heavily deluded.
The major problem is that healthcare is not well served by a purely market economy initiative. People do NOT have the power to make appropriate choices, simply because 1) your health needs are too complicated to understand unless you have extensive training (and difficult even then), and 2) the point when you need healthcare is often the time when you're least capable of making rational decisions.
In regards to 1, this refers to the difficulty in determining what is important for coverage. Comprehensive coverage (any and all incidents) would put you into a high risk / chronic treatment pool where your premiums would be insurmountable. So in effect, people will begin to try and check off what they need and what they perceive they don't. But this is where the danger is, and why this type of situation is not one that citizens should want to engage private companies for. If a simple mortgage agreement is as complex as it is, then consider one that pertains to your health coverage and what part is covered and what isn't. How much coverage do you want for kidney failure? Heart failure? Do you want coverage for hypertension? If your heart failure is due to chronic hypertension, and you didn't get coverage for chronic illnesses, will your insurance cover it? How long until a policy maker wants to take a blood sample and see if you're at higher risk for chronic hypertension, and they want to tailor your costs along this risk? Spleen issues? Do you want to cover traumatic brain injury? Stroke? Is your stroke secondary to persistent hypertension that you're not covered for? Basically, none of us can make all of these decisions in an informed manner, which a purely private enterprise would force us to do. In effect, it would result in a system of the rich getting full coverage and the middle class and lower class taking minimal coverage that sends them into bankruptcy at the moment of an urgent medical need.
In regards to 2, people in the low coverage would be forced into choices at the time of their injury / illness that would be impossible to make. If your husband is having a heart attack, are you going to shop for the best hospital while he's on the floor of your living room? What if your policy doesn't cover the ambulance? If you don't have healthcare coverage at all, and all healthcare providers are private, does society let you expire on your living room carpet? Perhaps dramatized, but the point is that, unlike buying a flat screen TV, the moment of choice for healthcare is sudden and highly of consequence.
In short, healthcare is no place for pure market economics, yet the US is in a tug and war between people who want to treat it like buying a TV versus people who want to treat it as an area of profligate spending that shall not be touched. Compounding this point is that the world's healthcare system relies heavily on the US subsidizing the research and costly drug development that is improving healthcare and healthcare delivery. Countries like canada, england and france can keep their costs down in part by telling a company like Pfizer that they can only sell drug X at price Y. These prices will often not allow meaningful cost recovery for the company, meaning that they in turn raise prices in the US system to help subsidize low priced sales in other countries. So to a certain degree, for spending to decrease in the US, spending in countries like Canada needs to increase.
So really the choices to be made in healthcare vs the debt are very complex and are not well captured by left wing and right wing sloganeering. My preference is to begin to implement regional / cooperative initiatives like those in the ACA so that we can begin to figure out what works and what doesn't.
* the best analogy I can think of is an auto insurance market where, once you make a claim, you're moved out of the zero claims pool and into the "those who have made claims" pool. As you continue to segregate low risk and high risk, the low risk pay less and less and the high risk pay more and more.
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