What Might Be Done

I feel a trifle overwhelmed at the response to the mental illness post immediately below. All of the issues raised, and kindness expressed, cheers my heart and augments my personal hope for recovery. Of the comments below it seems to me that the most useful to develop further was the polite request of "Sherry" that I offer some notions about solving the difficulties we have with health care.

The difficulties as I see them stem from the fact that medical care is a relatively inelastic demand, so what I would call "faith based" free market ideology simply does not result in a pattern of care and costs that further public health, or serves the public interest, as a whole.

We must firmly grasp that we cannot expect the relations between the public and health care to behave, economically, like competing retail grocery chains where consumer demand has some real leverage on long term prices. This is why I think that some degree of unilateral government intervention in the health care market is inescapably necessary--the real question is where, and how much.

Medical care is comprehensive service over time, which is NOT purchased line item by line item, even though a bill can be itemized that way. It is also a service for which the demand is, as I said above, relatively inelastic. When you need it you need it, whatever the price, and when you don't need it, you don't purchase it for fun and pleasure.

As consumers we are divided into two broad groups, the generally sick and the generally well. The paradigm for the generally well is the college population, who are not "insured" while in school, but have access to the minimum medical care they usually need through the school health center, which is funded collectively just like the school library. The paradigm for the generally sick are the folks on Medicare, the elderly and the disabled. Most of the rest of us alternate between these two populations, as our luck inclines.

The generally well can get by with little or no care. But the vast majority of Americans would be bankrupted by being generally sick and having to pay out of pocket for the expenses. This is what "medical insurance coverage" is all about: getting the generally well to pay collectively for what the generally sick cannot pay for out of pocket individually. So what politicians and press persist in mislabeling a "health care problem" is actually a health insurance problem: as American consumers we have the best health care that nobody can really afford.

The cost of insurance to consumers is actually driven up by the intensity of the competition among carriers in the presence of inelastic demand for care. The function of insurance is to cover a big enough pool of consumers to successfully defray the average cost to each. Competition has fragmented the coverage into smaller and smaller pools, with every business, no matter what it's size or capacity, trying to merely insure its own employees, and constantly being duped with premiums that are deliberately made lower than costs in the first year of coverage to entice business, then steadily raised beyond costs to defray the carriers' first year losses.

As more and more people lose health insurance through this process, the amount of "charity care" steadily increases. And this is not just a matter of people with NO health insurance. The number of expense types systematically excluded from health plans as "non-covered expenses" to "cut costs" has steadily risen, as has the pressure to reduce the so called "allowable expense" limits of the services which carriers will pay, and, finally, the benefit percentages themselves have declined. This is at its most dramatic with Medicare and Medicaid, the primary carriers for the part of the population which is generally sickest--the disabled and the elderly. These people also receive a tremendous amount "charity care" of non-covered and "non-allowable" expenses, even though they have some medical coverage.

In my view, this is where government intervention has the most promise. If the government amalgamated all "primary" insurance coverage into a 290 million person pool, funded with tax revenue, with a relatively low benefit percentage (60%-70%), the private carriers could, still, competitively write "secondary" coverage for the balance of expenses at much lower cost to businesses and even at a greater profit to themselves. This is most important. The last thing we want to do with government intervention is to drive the private carriers out of business.

I am much less supportive of government attempts to actually organize the medical care itself. My friends on the conservative end of the spectrum point out repeatedly (and truly) that state-run medical systems experience routine shortages in care supply and long delays in care delivery.

Moreover, the intractable American demand for "choice" in caregivers has to be taken into account. "Free choice" is a part of our culture which, as Liberal as I am, I am loath to lose as any Conservative. It is a deeply emotional American need which all American lawmaking simply must take into account. We might attempt some overall coordination of medical care, but I don't think that, culturally, "national health" systems such as Europe has are for us. Any coordination attempted must proceed slowly, conservatively (with a small "c"), and only AFTER consolidation of the insurance pool has been accomplished and we have seen its effects.

But until we organize matters so that ALL of the generally well pay equally for ALL of the generally sick then the basic problem will not go away: the costs of "charity services" will be shifted unfairly onto those lucky enough to work for companies and institutions that provide health coverage, and shifted unfairly onto those progressive companies and institutions themselves. And this is the major reason why health insurance coverage for ALL of us is slowly, but steadily, contracting.