Health care's incentives: running the right way?

 

Article first published as Debate over Health Care: Rationing of Intelligence Again on Blogcritics.

Health  care as a public policy issue again resurfaces as Republicans and Democrats spar over what measures to take to ease the federal budget deficit away from financial abyss. As elected Republicans and their party operatives tell it, the fix for our national debt is entitlement reform. Congressman Paul Ryan’s proposed 2012 federal budget, called “Path to Prosperity” (for whom? one may ask), includes an extreme  makeover of Medicare, scaffolded by such slogans as “freedom to choose,” “options,” and “market competition;” what any half-awake observer would call non-sequiturs when considering the factors that actually drive up the cost of medicine.

What is at stake in this debate is a prevailing assumption about the business side of meeting the basic need for physical wellness; one that few have dared to question. Addressing this assumption openly and honestly would force a confrontation with our values as individuals and as a nation.  Very much unlike the approach to health care favored by Dick Armey and Matt Kibbe; writing in a draft-Paul-Ryan-for-president mode, they urged readers of The Wall Street Journal  last week that, because of entitlements, America’s fiscal future hangs in the balance, and that “without substantial Medicare savings the budget cannot be balanced. Period.” Well, that settles it. 

Rather, it’s classic scaremongering misdirection from a couple of fellas who must have nodded off to sleep over the last ten years; while a Republican-dominated Senate, House and White House pushed through a series of unpaid-for tax cuts and borrowing for two wars, vaporizing what was once a federal budget surplus at the beginning of 2001. The non-partisan Center on Budget and Policy Priorities recently confirmed what actual numbers comprise the bulk of the staggering federal deficit. As of 2009, two thirds of the $1.4 trillion well of red ink came from the Bush tax cuts, war borrowing, TARP and the American Recovery and Reinvestment Act.

Not a whisper of reconsideration otherwise will you hear from Republicans bent on dismantling entitlements. And, oddly enough, not a word about the health care crisis afflicting the middle- and working classes; that is until Democrats in Congress finally plastered together enough votes last year to pass the ultra-mediocre Patient Protection and Affordable Care Act . Like a smothered echo of Obamacare, Paul Ryan’s budget scheme pantomimes concern about health care access and affordability, yet leaves the well-oiled health insurance industry untouched and intact.

Rep. Ryan’s remedy for the ills of our health care system is more of the same snake oil the Bush administration attempted to sell this country in 2005, then packaged as privatizing Social Security. The unqualified faith and devotion free marketeers like Ryan express for any accountability-free industry, such zealotry explains simpleton solutions featured in his Path to Prosperity plan:  “Give patients more control over the money this nation spends on health care, and so let competition in the marketplace control costs, improve quality, and expand access.” Indeed, more money in a patient’s hands means one less degree removed from the grip of the policy underwriter’s.

As the recently sustained spike in gas prices demonstrates, the marketplace has little interest in controlling costs. The only control happening is of a captive consumer class dependent on necessities like automobile fuel and health care insurance forced to shell out more of their stagnant salaries. Price structures that exploit such dependency should be labeled for what they are: gouging.

Speaking of gouging, how does raising health insurance premiums from year to year at least 100 percent sound? Personally I know of a private equity firm in Beverly Hills, a small-business client of Anthem Blue Cross, that endured this type of free market favor. The individual clients of the health insurer haven’t fared much better in recent years, seeing their rates rise almost 40 percent each year.

While the health care industry provides treatment and services that meet critical needs common to all citizens, where quality of life and life or death are at stake, it’s not too late to question how said treatment and services are delivered, and for how much.

As this debate illustrates a difficult turning point for this country, I am reminded of another turning point that took place over 40 years ago; a debate not unlike today's. Democrats and Republicans debated which path our nation’s health care system would take: a nationalized program providing care for all citizens or a system that would primarily benefit the medical industry and patient care underwriters. One pivotal moment was a conversation in the Nixon White House between the president and one of his policy advisers, John Ehrlichman. Mentioning a visit he had received  from Edgar Kaiser, CEO of the Kaiser Permanente HMO, Ehrlichman offered a key factor to the president’s “National Health Strategy,” announced on February 18, 1971, the  following day.  Describing Kaiser’s business model, the president’s adviser stated that the CEO was “running his Permanente deal for profit….  All the incentives are toward less medical care because the less care they give them, the more money they make.”

What irony President Nixon summoned the next day by criticizing traditional medical care delivery systems for having “no economic incentive for them to concentrate on keeping people healthy.”  An HMO would offer the alternative of “[a] fixed-price contract for comprehensive care [which] reverses this illogical incentive.” Yet, just the day before, Ehrlichman had sold the president on the idea of Kaiser’s incentives running “the right way,” meaning more revenue for less care.

And here is what has escaped the focus of our national consensus about the cost of medical care: the assumption that its value should be tethered to the impulse of profit making, as well as subservient to the demands of ultra wealthy shareholders and institutional investors. If nationalizing health care is not the means by which we manage to restrain the runaway costs of medicine, there must be other methods, through the tax code or industry regulation, to blunt their fierce momentum.

 

Comments

[JG2040]

The term we should be talking about is fiscal responsibility. It was not until the Republicans took over the House and the Seante in 1994, that this country started to move toward a balance budget. Bill Clinton who continually takes credit for balancing the budget, only did so because the Republicans ran Congress in the last 6 years of his Presidency. The Republicans cut spending, The Republicans reformed welfare. Bill Clinton just signed the legislation because he did not want to face the backlash of the American people if he vetoed it. The 12 years that the Republicans had control over the Congress was the greatest 12 years of low unemployment and high economic growth that we have had in the last 60 years. The economy was in the toilet in 1994 when the Democrats ran congress and quickly went back into the toilet when the Democrats took back control of congress in 2007. The largest deficet that the Bush administration had was in 2008 (when the Democrats controlled both houses of congress which means they held the purse strings) and it was $400 billion. Obama has run up deficits of $1.4 TRILLION, $1.3 TRILLION & $1.5 TRILLION in his first 3 years. The Democrats spend money like there is no tomorrow. And that whole idea of have "to pay" for tax breaks shows your warped mentality. It is not the Governments money. Its the people's money. The top 50% of wage earners pay 98% of the income in this country. The top 5% of wage earners pay 53% of taxes and the top 1% pay 29% of taxes. The upper class and the rich not only pay their fair share of taxes, they pay more than their fair share of taxes. How can President Obama look at someone who is paying over $1 Million in taxes and say 'you are not paying your fair share.' The people who are not paying their fare share are the people who do not pay any taxes. They are not pulling their weight in this country. Those are the people who need to be called out in this country. If you have a healthy mind, a healthy body and a spark of life in you, you should be able to become a productive member of this society, support yourself, support your family and pay taxes. If you are not doing that, then shame on you. You are like a thief, stealing from the society.
You get less of what you tax and more of what you subsidize. We are taxing prosperity and subsidizing poverty. That is why we are a less proseprous country with more poverty.