Chipping In

From an article in the New York Times magazine, we learn of a woman – uninsured, due to a complicated set of circumstances – who suffered a subarachnoid hemorrhage (brain bleed) and spent time in the hospital, and later starting getting bills: $16,000 from the hospital, $50,000 for the air ambulance, $24,000 from a physicians’ group, $54,000 from the same group for additional charges and late fees, and then, another from the hospital for $356,884.42.

The article, which is about “the arcane, sprawling classification system that doctors and hospitals have learned to game” as one big reason for the high cost of health care, is definitely recommended reading. But even if we did nothing about this system or about the other major contributors to the problem – drug prices, too much  testing, high price tags on basic procedures – even if the woman’s bills for hundreds of thousands of dollars were totally legitimate – there is something we could do: Chip in and help her pay the bills. If we did that, it would cost each of us a couple of bucks and save her a fortune – indeed, save her from total financial ruin. And if we chipped in to buy her insurance against those medical bills, as opposed to paying the bills themselves, it would cost not bucks but pennies.

This is something we already do with national defense, roads and bridges, schools, police protection, parks and libraries, sewers and sanitation, water treatment, air traffic control, and on and on -- things too numerous to mention. We chip in. We pay for them collectively. We pool our money to buy things we want and need but which it makes no sense to buy as individuals.

It’s called taxation.

(Also included in that list, by the way, is keeping old people out of penury by giving them money -- Social Security -- and by helping them pay for health care -- Medicare. The idea that people “pay into” these systems and are therefore merely retrieving the money they contributed and to which they are therefore entitled when they get old is a myth. In fact, people pay taxes to the federal treasury – it doesn’t matter what names those taxes are given – and part of that money is then paid out, from the federal budget, for social security and Medicare benefits, in exactly the same way that money comes out of the budget to pay for an aircraft carrier.)

But, I digress. The point here is this: People may kvetch about paying taxes and about government spending – something everyone is against in the abstract -- but they want the things that tax dollars buy. It’s that simple. The idea that one group of people is more “fiscally conservative” than another is fiction. The argument is never whether tax dollars are going to be collected and spent. The argument is always about how -- which of the things those dollars buy is more important to me as opposed to the ones that are more important to you.

The obvious question: What’s more important than health care? Needless to say, it is essential to our well-being. But more than that, its high cost is a terrible problem, and the two previous administrations were right in giving it high priority. It puts millions of Americans on the brink of financial catastrophe and/or deprives them of medical care altogether, it exercises undue influence over where and how we live and work and what we do for a living, and it sucks billions of dollars to itself at the expense of all other sectors of the economy. Given the demonstrated inability of the health industry or any outside actors to stabilize costs let alone bring them back to earth, the contention here is that including health insurance on the list of things we spend tax dollars on is therefore a not unreasonable idea. Why not “chip in” for health care?

Would that mean a tax increase? Sure, assuming we can’t find offsetting savings in other areas. (The betting here is we can’t, as those “other areas” tend to have powerful constituencies). But it’s important to understand this: We are already paying that “tax.” We may not call it a tax, but whether it’s in the form of health insurance we buy on our own or higher prices charged by employers that buy it for us, it’s money leaving our wallets. Just like the money we pay to the tax collector, it’s money we have no choice but to part with. Either way, we’re gonna pay. But there is considerable likelihood that we would pay less because of the preventive care that such a system would pick up the tab for and because of the elimination of insurance company overhead and hospital billing costs. So from a financial outlay standpoint, it appears it would be, at worst, a wash.

As for reducing medical costs within the existing system to any meaningful extent as a way to get this problem under control, it appears that for the time being at least, we will have to play it as it lays, so to speak – get people insured against costs as they now stand, and then take up the challenge of reducing costs. And a challenge it is, because the business of health care, for a variety of seemingly intractable reasons, has shown itself to be unresponsive to the normal pressures of a free market. Under the current system, in which there is zero price competition, costs are not going to go down and therefore the price of insurance isn’t going to go down, either. (Free market enthusiasts cite the example of Lasik surgery, the cost of which, due to competition, has come down considerably over the years. But Lasik is elective and people can shop around at their leisure for the low-cost provider. With things like cancer care, cardiac surgery, and organ transplants – well, not so much.)

What’s being suggested here is not socialized medicine or a government takeover of health care, an accusation that critics draw like a gun whenever this subject comes up. The government would own no facilities or employ any medical personnel. It would simply pick up the tab for insurance – as it already does, efficiently and effectively, with Medicare. For people who object to Medicare on principle, the question is this: Would you like to be paying the medical bills of your elderly parents and having them live in your basement because they can’t afford their own housing? Medicare is a system that the overwhelming majority of Americans believe in and view with gratitude and relief. Thank God for Medicare, is what just about everyone says as they approach old age.

We all chip in for insurance for seniors. Why not chip in for insurance for everyone?

(Note: For an in-depth discussion of why the American health care system is unresponsive to normal free market forces, Flyover can recommend the book “An American Sickness: How Healthcare Became Big Business and How You Can Take it Back” by Elisabeth Rosenthal. Here is a review in the New York Times Book Review.)