Healthcare and the Public Option

I'm trying to understand what is being put together by the Congress as a Healthcare Bill. Some arguments I've heard is that this is nothing special. Think Social Security; do you like your Social Security? Another line of discussion says that we've got to insure everyone, so why not a plan on the lines of Medicare?

Let's begin with Social Security (SS), because I believe looking at this institution can provide valuable insights. Why have something like SS, when private companies can, and do, offer life insurance?

Ans: Because only the government can require citizens to pay premiums for such a policy, even when a citizen might prefer not to pay such a premium. In short, it's coercive. Is that good? Yes, in this specific case, I believe coercion is appropriate public policy. Young adults may feel they'll never grow old, or believe they'll be able to take care of themselves in their old age. But, more often than not, that's not what happens. SS helps mitigate the poverty that once dogged older citizens. It is good policy.

Does SS have a downside? Sure, it's under the management of Congress, a vital, but very flawed, institution. SS is nothing more than public live insurance. It requires the payment of a premium, it requires a reserve, and it must operate in a financially sound manner. It doesn't sound complicated, but unfortunately it's not easily done by most of our people in Congress.

However, the consequences of not doing it properly eventually become so severe that whether they like it, or not, in the end, they must raise the retirement age, if that's what's called for. Or, they can raise the premiums (this is generally less politically palatable).

Now, the question becomes as to whether this is equally true for the "public option," or to define it more properly, "a public health insurace program." Ans: Yes and no.

On the "yes" side, there's a great deal to be said for seeing to it that every citizen be able to receive the treatment he, or she, needs for whatever illness they come down with. Extracting from them a premium for such insurance, even thought many young people see themselves as being quite healthy and not needing such insurance would seem to be in the public interest.

But there is a down side. The cost of life insurance, or mandatory life insurance in the case of SS is relatively easy to calculate. It's pretty much all based on life expectancy. The cost of health insurance has been found to be wildly unpredictable and out of most everyone's control. The Medicare that is so widely touted, by some, as a wonderful model for healthcare for all citizens is in serious, serious trouble. It is being kept afloat largely by the great American printing press and, if you see no problem with that, talk to most any responsible economist.

It's all about cost, cost, cost. In America, the cost of medical procedures ranging from colonoscopies to heart surgery can, and does, vary by roughly 50%. In other words, procedures in some areas of the country are 50% more than they are in others, or, looked at another way, they are 33% less in some areas than in others. Either way you're looking at differences that are enormous. I, for one, do not believe this is a situation that can be managed by our legistlators.

What needs to be done, in my opinion, is the following:

1. Have the government step in and require all areas of the country to follow "best practices." If you think that's easy, consider the difficulty that has been encountered in some hospitals when they tried to get their doctors to wash their hands between patients and before approaching a patient. All medical recored should be put on a computerized national healthcare bank. (Yes, I know, everyone will be trying to crack into the president's data, but nevertheless the problem must be addressed.) There is a great deal more than can be said about "best practices," but that's for another blog.

2. Deal with the constant threat of lawsuits against doctors. What complicates this issues is that some doctors richly deserve to be sued out of their practices. Finding ways of weeding out the incompetents will be the challenge.

3. End of life. That's right. It comes to all of us. Call them "death panels" or whatever, but, for some, there will have to be a determination as to when enough is enough.

4. Make the medical insurance companies more competitive. End the barriers between states that prevent insurance companies from competing for business throughout our country.

5. Require all citizens to carry a minimum policy.

In other words, try to improve the healthcare system in our country by easy steps before letting the legistlators to pull out their knives and butcher things up in a way that will be almost impossible to remedy.