The Boston Globe Sunday, June 25, 2000
THE SOLUTION ON HEALTH CARE – UNIVERSAL COVERAGE
by Robert Kuttner
Item: The World Health Organization has ranked the United States
health care system 37th among nations, at the bottom of the list of
advanced industrial countries. The United States ranks last, even though
it spends a higher percent of its national income on health than any
other country.
Item: Congress remains deadlocked on the Patients' Bill of Rights. Most
Democrats want to give consumers the right to sue a managed care
company for malpractice if the company wrongfully second-guesses the
doctor, in effect practicing medicine without a license. Republicans
oppose this measure, seconded by the insurance industry.
Item: In Massachusetts, insurance companies that sell Medigap
insurance (to cover what Medicare does not) want rate hikes of as much
as 40 percent. As this kind of such insurance becomes more
unaffordable, only people who are very sick, or very affluent, or both,
buy it - which then requires further rate hikes.
Item: The House Republicans have approved a bill to offer partial
prescription drug coverage to people eligible for Medicare but without
controlling drug prices. The actual insurance would be sold by private
insurance companies. Most drug costs would still be paid out of pocket.
Item: A Wall Street Journal investigation reports that two major
companies that sell long-term care insurance signed up elderly people at
low rates that turned out to be too good to be true. Then, when the
companies had to pay out costly claims, they jacked up the premiums to
the point where many of the subscribers who needed the care could not
afford to continue the coverage.
What do all these stories have in common? They testify to the
failure
of market forces to allocate health care either efficiently or fairly.
The basic principle of insurance is what economists call the law
of
large numbers. If you want to manage risks, it makes sense to spread
them around to a very large group.
In the case of health insurance, the largest available group is
the
entire population. That way, the well subsidize the sick, the young
subsidize the old, and nobody fears losing coverage when they are sick
or old.
But when private insurance companies carve up the population,
they
maximize their profits in a fashion that is socially perverse. They try
to
enroll the people least likely to get sick.
Or if they are unlucky enough to end up covering sick people,
they
often discourage doctors from providing costly treatments.
It makes no economic sense to divide the population into
different
population pools for purposes of health care. The result is not greater
patient choice but greater limits on choice.
The one plan that consistently lets any patient choose any
doctor is
Medicare, our one universal program. It is the for-profit HMOs that tell
you whom you can't see or what treatment you can't have. These same
managed care companies don't want Congress to pass a patients' rights
bill; that would limit their ability to dictate the withholding of care.
Take the case of drugs. Prescription drugs are the
fastest-rising cost
in the health care budget. Elderly people now spend more on drugs than
they do on doctors. Drugs are often the most cost-effective and painless
treatment available, but most older Americans lack full prescription
drug
coverage.
A great deal of the research behind new drugs is borne by
taxpayers
via government-funded research. Yet much of the benefit goes to private
drug companies that benefit from generous patent protection as well as
public research dollars.
Year after year they keep prices high and usually enjoy the
highest
profit margins of any industry.
So it's no surprise that we spend more and get less for our
health
dollar. The fragmented, for-profit health industry leaves tens of
millions
of Americans uninsured and underinsured. It gives insurers incentives to
discriminate against the sick. It leaves drug prices far higher they
ought
to be.
The solution to all of this is universal coverage. Then no
insurance
company would spend a nickel on marketing or on dividing the sick from
the well or on thinking up incentives to divide doctors from patients,
because everyone would be insured. People who needed prescription
drugs would get them.
There would still be difficult ethical dilemmas of how far to go
with
costly heroics, but we would be spending every available penny far more
efficiently and humanely.
The vast majority of Americans want universal coverage; the big
exceptions are the insurance and pharmaceutical industries.
It makes you wonder who is running the country.
Robert Kuttner is co-editor of The American Prospect. His column
appears regularly in the Globe.
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