Thursday, June 18, 2009

A useful role for government in health care reform

OK, we have to wrap this up: I don't think there's anyone in America that doesn't agree that the health care system is in serious need of reform. I also think most people would agree that, when it works, our health care system is the best in the world. It just doesn't work that way for many. The goal of reformers, therefore, should be to preserve the quality of care that is available in America to some... and make it more available to more people.

I don't believe that government can achieve this goal by providing health insurance or health care itself. Government provided health care sounds like eternity in line at the DMV, only with people coughing, hacking and sometimes passing out.

On the other hand, sitting back and wishing for the "market" to work all by itself is foolish, too.

First, right now, there is no real easy-to-define "market" for health insurance and health care. Some people provide their health insurance, as I did for many years. But most people don't see or feel what it really costs for health care: Either their employer provides it (O! You dwindling few!)... or the State provides it (Medicaid and Medicare)... or the Bankruptcy Court dismisses it (for those uninsured who guessed wrong about the state of their health).

There are (to borrow a recent, but still hackneyed phrase) 'green shoots' of a market in phenomena such as nurse practitioners beginning to staff 'clinics' in pharmacy chain stores.

Sound government policy, I'd submit, would be to wean Americans off the employer-provided system and introduce an individual-based one.

Now I've railed here against some of the horrible companies I've seen providing individual coverage: Thieves and liars are some of the nicest things I've called some of them. So it may seem strange for me to suggest that this can be a model for us to follow.

But this is where government can play a constructive, useful role.

Government can be a nifty referee, prescribing mandatory rules for coverage and providing a level playing field for consumers and holding insurers accountable for misconduct through -- are you ready for it? -- the court system.

Government can insist on uniform standards for all health insurance policies: All policies must cover preexisting conditions, for example, or insure over genetic tendencies. Prohibit health insurers from 'negotiating' prices for services: Make doctors and hospitals charge what they need and compete with other hospitals and doctors on cost and/or quality of care. And let's take Medicare and Medicaid out of negotiating prices, too. If a hospital wants to charge $3,000 to Blue Cross for an overnight stay, it can't charge $3,500 to Aetna -- or $10,000 to an uninsured person.

But what would keep doctors and hospitals from jacking prices through the stratosphere? Shame alone won't work. We seem to live in a post-shame world. But we can require (regulation) that non-profit hospitals must truly be non-profit, or forfeit that status. And we can permit health insurers hire their own doctors and run their own hospitals. The new Blue Cross might be able to pay (say) 75% of any insured's hospitalization at any place the insured chooses -- but 85% of the hospitalization if the surgery is done at the Blue Cross owned hospital. Here again, government could set the upper and lower percentages and thereby be helpful. That's appropriate regulation. Within this regulatory framework, people could make decisions appropriate to their own circumstances and prices would be controlled.

Even if uniform health insurance standards were prescribed at the national level, I'd like to see health insurance contracts enforceable in the state courts -- and no diversity removals, either. Let local communities decide, in jury trials, whether one of their neighbors has tried to cheat the insurer... or vice versa.

The meaningful threat of an attorney fee award can be a significant deterrent to an insurer that might be tempted to boost profits by failing to provide contracted coverage.

Encourage the formation of doctor-owned malpractice carriers... even tort lawyer-owned malpractice carriers. But prohibit malpractice insurers and health insurers from being jointly owned. That's useful regulation. Health insurers that run hospitals or hire doctors would be subject to the same malpractice risks as any other hospital or employer of physicians. Don't cap malpractice recoveries but, rather, insist that malpractice insurers have the right and duty to settle cases where settlement is indicated. Don't brand doctors with the Mark of Cain because of a malpractice settlement -- but beef up state medical boards to weed out incompetent doctors. Regulation, again.

Some people will surely be unable to provide coverage for themselves or their families, no matter what price the policy. Government will in effect be picking up the tab for these people whether it is through charity hospitals (e.g., Cook County Hospital) or by setting up its own clinics and hospitals or by paying for services obtained. I'm willing to bet, however, that -- government being as incompetent in most things as it is -- most people, if they have a meaningful, reasonably-priced alternative, will choose anything other than government health care every time.

I've been trying for three days now to think of an analogy to show what I think government can and can not do.

This is the best I've come up with. I know some lawyers, both plaintiff and defense lawyers, who know more medicine than most doctors. They can diagnose and evaluate with the best doctor you could find. That's how they can evaluate cases, taking good ones, or settling bad ones. Yet, I wouldn't let one of those lawyers near me for treatment, not even with a 10 foot thermometer. Just because a lawyer has extensive medical knowledge does not make him or her a doctor. In a way similar to my lawyer acquaintances, government can develop expertise in regulating health insurance and health care -- especially if it permits the nation's lawyers to keep the players honest -- but government can't provide health care.

As we are about, I am afraid, to find out.


Dave said...

I like it; except, the market thing. Markets work when there is adequate supply to meet demand and will self regulate only when supply can grow to meet demand or demand will drop in reaction to high priced limited supply.

Even under our current disfunctional system there is a lot of unsatisfied demand. Create a market that requires that demand be satisfied (universal eligibility) without adequate supply will cause the price to skyrocket. That will reduce demand; but, that defeats the purpose - people will go without care or drop into the government supplied safety net - we're back where we are now.

I think your plan needs a plan to encourage increased supply.

I think I said all that correctly.

The Curmudgeon said...

Dave -- that's a good point. My daughter, who's in nursing school, keeps telling us about layoffs among nurses. There are health care blogs linked in the Sidebar where you can see that what she's reporting is not fundamentally different from what others are experiencing elsewhere in the country. And, yet, we read about 'critical shortages' of nurses.

But, on the other hand (I'm now starting to sound like Tevye in Fiddler on the Roof), nursing schools are increasingly selective -- turning away all but the best students.

Sounds like the way medical schools were a generation ago, doesn't it? Despite an alleged shortage of doctors, kids couldn't find a place in the United States to take them.

(Gosh, I wish it were that way with law schools, don't you Dave? I mean, I wish it were that way now......)

But supply of hospitals has been held down -- we have boards that are set up for this purpose in Illinois -- see Tony Rezko and Rod Blagojevich for an example of how well that's worked.

So I agree with you -- lift these controls, too.

Again... decent regulation, within the sphere of things that government might do right....

Jean-Luc Picard said...

Healthcare is never in a perfect way.