Medicare for All

I am returning to a subject I haven't addressed for a long time.  Back in 2013 I wrote:  http://sigma5.blogspot.com/2013/02/medical-costs.html.  About a year later I sort of addressed the same subject with:  http://sigma5.blogspot.com/2014/03/fixing-healthcaregov.html.  But this latter post was more about politics and technology than it was about medicine.

A lot has changed since then, right?  The first post was written in the middle of the Obamacare fight and that was ages ago.  Obamacare has been the law of the land for several years now, which actually has improved things.  Even so, remarkably little has changed.

"Medicare for All" is an eye catcher when it comes to a subject line.  But it  is misleading as I am not going to confine myself to just it.  Instead, in this post I am going to take a broad look at health care as a whole.  And one reason is that so little has changed is that there is so much noise and BS surrounding the subject.  And I like to write posts where I cut through noise and baloney and get to the real story.

And it turns out we can now start with a simple question for which we now know the answer.  The question is:

Is it okay for many people in the US to have poor to non-existent health care?

Republicans say "yes" and Democrats say "no".  This conclusion is borne out by the debate that surrounded Obamacare and the actions subsequent to its passage and implementation.  An argument can be made that Obamacare is flawed and needs fixing.   Republicans have made that argument all along the line from then to now.  It is a reasonable position.  After all, I agree with it.  Pretty much everybody agrees with it.  There is literally nobody, from Obama on down that thinks it can't be improved.

And we can divide the way it should be improved into two general approaches.  The first approach is espoused by the group that thinks it is a good foundation but various fixes and improvements should be implemented on top of it.  Vice President Biden and lots of others support this approach.  Then there is another group who start with the position that it has major problems.  This group says it should be scrapped and replaced with something else.  President Trump says he is in this group.  He is joined by a large majority of Republicans.

So where's the problem?  Republicans have been advocating for a "repeal and replace" strategy all along the line.  The problem is that in the entire time since President Obama proposed the plan that eventually became Obamacare, and right up to the present day, no Republican replacement plan has been brought forward.  None!  On the other hand, several serious attempts have been made to repeal Obamacare without including a replacement.

And it is instructive to review the history of where Obamacare came from.  Early in the Clinton Administration, a proposal was brought forward and championed by then First Lady Hillary Clinton.  It was a pretty good proposal.  And all along Mrs. Clinton said "if you have ideas for improvements, bring them forward".  For a long time Republicans engaged in a "death by a thousand cuts" strategy where they said "we don't like this" and "we don't like that".  However, they never proposed an alternative or a fix.

Late in the process they finally rolled out the outline of a plan to replace Mrs. Clinton's plan wholesale with a plan of their own..  It was produced by the Heritage Foundation, a conservative think tank.  It was introduced at the last minute and, frankly, was not a serious proposal.  But afterward, whenever anyone got serious about a major change to health care they would trot it out and say "this is our plan"..

Then a Republican Governor, Mitt Romney, got serious about health care.  He dusted off the Heritage Foundation plan, fleshed, it out, and tuned it up.  Then he got it implemented in the state of Massachusetts.  A Republican Governor implemented a Republican healthcare plan.  President Obama was serious about doing something about healthcare.  He figured that if he took Romneycare, tweaked it slightly, and proposed it as his healthcare initiatives, Republicans would embrace it.  It was, after all, a Republican plan through and through.  That plan is what is now generally referred to as Obamacare.

He expected it to be embraced by Republicans.  That was a reasonable expectation.  After all, it was their plan.  He probably thought resistance would come from Democrats.  But not one Republican voted for Romneycare/Obamacare.  Nor did Republicans make a serious effort to engage with it.  They instead engaged in a "resist everything, block everything" campaign, even though it was their plan.  Their strategy came very close to being successful in blocking President Obama's efforts to pass it into law.

Since then Republicans have made countless efforts to "repeal and replace" Obamacare.  Except they haven't proposed a replacement.  The reason for this is simple.  Any proposal they made would be less popular with their base than Obamacare.  The only conclusion that can be drawn from all this is that Republicans are okay with many Americans having poor to nonexistent health care.  That's what the current system delivers and they have made no effort to change it so that coverage is broadened.

So that leaves the Democrats.  One complaint, then and now, is that Obamacare does not cover everyone.  This was because his team made the calculation that any "universal coverage" version couldn't get passed.  Given how close Obamacare came to not passing this is a reasonable position.  None of the "no" voters voted "no" because it did not include universal coverage.  And, as a side note, Romneycare provides near universal coverage in Massachusetts.  The provisions of Roimneycare that would make Obamacare near universal, were left out in the first place, repealed later, or struck down in the courts by Republican judges.

It is possible to provide universal or near universal health care.  Lots of countries have done it.  And it can be done in several different ways.  In my 2013 post I mentioned a book called "The Healing of America" by T. R. Reid.  Amazon sells a Kindle copy for $13 and a paperback copy for a little over $16.  In it he examines the health care systems in use in 6 countries.  Some of the six plans he reviewed are cheaper.  Some are more expensive.  Some countries run the whole thing as a government operation.  Some countries insert insurance companies into the middle.  No two countries do it exactly the same way.

But in all of the cases Mr. Reid examined, everybody is covered, it is cheaper than the US system, and it doesn't matter whether you look at the pre-Obamacare US or the post-Obamacare US.  And, most critically, citizens of all six countries like their system better than Americans like ours, and citizens in all six countries are healthier and live longer than Americans.

What Mr. Reid did is what's called in business circles, "going to school on the competition".  You study what others are doing, you see how their system works, you see what it does well and what it does badly, and you go from there.  This works best for systems that have been up and running for a while.  That way you can see how well they work, not just in the beginning, but over time.  All the health care systems Mr. Reid studied have been in place in their present form for many years.

The smartest thing the US could do would be to adopt a system that is based on parts that are found in the systems of these other countries that look like they would work well in the US.  This process should result in looking at ideas that otherwise don't get discussed in the US.  Studying the strengths and weaknesses of each system, which Mr. Reid did in his book, would allow us to implement proven "best practices" while simultaneously avoiding common mistakes others have made.  The reason we don't do this is politics, pure and simple.

What we have is a bunch of people of power and influence who have adopted a position and are not interested in learning why it might be wrong.  So they do the political equivalent of putting their fingers in their ears and shouting "la, la, la, la, la" loudly, any time somebody tries to inject anything sensible into the debate.

This, in a nutshell, is the strategy Republicans have adopted on the subject.  They have had quite a bit of success with it.  At no time did Republicans admit that Obamacare was a Republican plan originally created by a conservative think tank, for instance.

Now, there's lot of nonsense on the other side of the aisle.  And I am now going to get into some of it.  Let's start with the most fundamental truth about healthcare:

Health care inevitably eventually puts a price on life.  Further, it puts a price on quality of life.

I have seen this time and time again in my lifetime.  When I was a kid, health care was cheap.  It isn't any more.  What has happened in the interim is that a whole bunch of people have come up with a whole lot of ways to improve health.  But, on average, these improvements and innovations keep getting more and more expensive.

Everybody was poor during the Great Depression.  If you were in the medicine business and you were pushing an expensive treatment, people would chose to die.  In many cases the decision was forced on them because they literally didn't have the money.

I grew up some time later.  But the overhang of that behavior was still around.  Medicine was plain and cheap back then.  But the "plain and cheap" medicine of the time produced a lot of people dying who wouldn't today.  Or they were sick a lot of the time from things we can now prevent or cure.

We now have a vaccine that prevents people from getting Polio, a disease that killed some people and left lots of others confined to something called an "iron lung" for the rest of their lives..  We also have ways to treat things like infectious diseases that used to sicken almost everybody and kill far too many.  The Polio vaccine was introduced when I was a kid.  It was cheap.  Many of the medical innovations of the time were cheap.

But people found more and more ways to spend more and more money to develop the next medical improvement.  So, soon you had the thousand dollar drug.  That led over time to drugs that can cost a million or more dollars.  After all, you can't put a price on life, right?  It turns out, however, that people are very reluctant to fork over their hard earned tax dollars or insurance dollars, to pay for an expensive cure for somebody they don't know or don't like.

There are some good reasons for the steady increase in the cost of health care, and some bad ones.  But the trend has so far proved unstoppable.  Someone can always come up with a new treatment that saves live or improves quality of life but costs more, often much more, than the old treatment.  At some point someone has got to sweep in and say "no".  We are going to let that person die.  Or we aren't going to improve the quality of life for that person.

No one wants to make these kinds of decisions.  We as a society have figured out dozens of ways to avoid having to directly answer the question of who should live and who should die.  And then there is the "bright line" problem.  There is no bright line between things that are too expensive and things that, while expensive, seem worth the cost.

There are always procedures that are a little more expensive or a little less expensive than other procedures.  But one way or another something draws the line and some things fall below the line and are provided and other things are deemed to be above the line and are not.  And "not paid for" means someone dies or suffers an impaired quality of life.  So,

Medicine is always rationed.  The only thing we are really arguing about is who sets the rationing rules and what they are.

Someone, who opposes some change to health policy will say "that's rationing -- we can't do that".  If the person saying it is knowledgeable on the subject, then they know it is a lie.  Any "expert" who is unwilling to say "there will always be rationing" is purposefully conning the less well informed.  Con men (and women) should not be listened to.

Get over it.  If we are honest, we are never arguing between a "rationing" system and a "not rationing" system.  We are instead arguing either about who does the rationing or about what the rationing rules are, or possibly about both.

Obamacare put in rules requiring insurance policies to cover certain situations.  The most famous example of this is "pre-existing conditions", but there are many others.  Generally speaking, these changes improved the quality of the insurance coverage.  But they also increased costs.  (SPOILER ALERT:  Health care is not free.)  What this did was "ration less but pay more".  It did NOT eliminate rationing.  It just changed the rationing rules.

The primary rationing mechanism used in the US is bureaucrats working for insurance companies.  There was an argument in opposition to Obamacare that went "it will put government bureaucrats in charge of your medical care".  First of all, that wasn't true.  Second of all, if it was true what we were actually doing was shifting the decision from insurance company bureaucrats to government bureaucrats.

In that context, lots of people would have seen the shift from using insurance company bureaucrats to using government bureaucrats as an improvement.  Finally, many of the people pushing this line knew it wasn't true.  Obamacare has taken some discretion out of the hands of insurance company bureaucrats.  But the Insurance people are still the ones making the decisions that deny some people life saving treatment.

Reid in his book makes it clear that a number of systems would result in a system that was cheaper and worked better.  And he is not alone.  That is a broadly shared consensus among those who have studied the health care systems used in other countries.  And, based on the experience of many countries around the world, people would like the new system better than the current one.  So what's the holdup?

Let's start with money.  It seems obvious that cutting red tape and bureaucracy is a good idea.  It should save money.  Okay.  That means you want a British style system where the government does everything.  All the doctors, etc. are government employees.  They have no financial incentive to run you through expensive procedures so they can get a kickback.  And they don't waste their time on forms and paperwork.

Every doctor office dentist office, etc. in the US has at least one person whose full time job is to shuffle paper.  The US system demands vast quantities of paper.  Those paper shufflers are running up costs and not improving the quality of the medical care you get.  But medical offices literally can't stay in business without them.  So now you're sold on the British system, right?  I'm guessing you are adamantly against a government run medical system in spite of the fact that it would be cheaper and work better.

So how about the French system?  Hospitals, doctors, etc. are independent.  There are even insurance companies.  The government provides an "audit" function but doesn't provide any of the actual care.  Well, in France the whole process is strictly regulated.  There are so many regulations that everybody might as well work for the government.  In spite of this, French health care is far better than that found in the US and it's cheaper.  That should give you an idea just how wildly inefficient the US system is.  Pretty much any other system works better and is cheaper.

The Canadian system has gotten some coverage here and there.  It delivers a better quality of service, on average, than the US system.  This is reflected in many ways.  But a simple example is it's popularity.  Most Canadians live near the border.  So they are pretty familiar with the US system.  They are uniform in preferring their system to the US one.

They have good reason for this.  Everyone is covered.  And routine procedures are covered.  So people don't get sick as often.  And when the do get sick, the problem is caught and cured more quickly.  But the Canadians have not figured how to avoid rationing.

Their system covers all reasonably inexpensive and common procedures.  It covers many expensive procedures too.  But one of the ways they keep costs down is by being slow to provide non-life-threatening expensive procedures.  You get them for free but you have to wait.

The US medical system is the best in the world, if you are rich.  If you have money to throw around, the US system will take great care of you.  Some relatively well off Canadians run into this expensive-but-not-life-threatening situation.  Some of them come down to the US where they can get the procedure immediately.  They just have to pay a lot of money.  But if you have the money then it often seems worth it.

So, the US system is the best system, if you are rich.  The Canadian system is better if you are in the middle, financially.  The Canadian system is far superior if you are poor.

So why can't we fix our system.  Well, here's one reason:

People don't like their medical plans.  It doesn't matter if it is an employer provided plan, a union provided plan, a plan from the Obamacare Exchange, or whatever.  What they do like is the team at the doctor's office, clinic, etc., that they have been using for the last few years.  They have built up a level of trust with this particular group of people.  So, they very much want to stick with them.

The thing that scares people about various proposals is that they fear that something MIGHT get in the way of them sticking with the medical professionals that they know.  It's not a chance they want to take.

I'm convinced that if this last issue is addressed in a way that people are convinced will work then they will support the plan, whatever it is.  But doing so is complicated.  And the devil is in the details.

And there are lots of people that want to mess with the details.  They want to make some "minor" tweak so that one group or another ends up making a whole lot of money out of the deal.  And that makes this almost impossible to pull off in a political context.

People know there is a problem.  They just look at any specific "solution" and find reasons to distrust it.  Senator Warren has run into this recently.  She rightly calculates that a fast transition saves money.  So she initially wanted to do it very quickly.

She recently put out an updated plan that stretches things out to three years.  But it also had a lot more detail.  And that additional detail caused a lot of people to conclude that her plan MIGHT get between consumers and their medical team.

The short term concern about having to change doctors, etc. overrode the potential long term benefit of better service at a lower cost (and likely the ability to keep their current doctor).  And that put a lot of people off her plan.  And that caused her standing in the polls to take a big drop.

There are several ways to go that I think would work well in the long run.  But, due to the problem I have just been discussing, I don't see how we get from where we are to one of these plans.  So, is there a way forward?  Yes!

Moving toward the French plan could be done in such a way as to allow people to keep their current medical team.  So that eliminates one roadblock.  All we have to do to get there is to pile enough regulations on top of the current system.  Done correctly, we will end up with something very similar to the French system in the end.

But the whole process (except possibly when we are close to the finish) will be horribly inefficient.  Most of the intermediate steps will increase overall health care costs.  And I don't know how the French fund their current system.

In the US pretty much every company or union is a separate path along which the money flows.  One of the things that is really disruptive about the US system is that changing jobs almost always involves changing health plans and that threatens the connection to the health team.

France, and the other countries have fixed this problem by getting businesses and unions out of the health care business.  When you change employers your health plan doesn't change.  And, therefore, your health team doesn't change.  They do this by using a single payment path that runs through the government.  There would be a lot of resistance by Republicans to this.  Currently, companies and unions oppose it too.

But I think the company/union resistance can be handled by coming up with a good transition method.  For both companies and unions, the health plan is part of the compensation package.  Let's say that the company/union contribution can be zeroed out.  Then if all the money saved went directly to the employee in the form of increased compensation, I think the change could be sold.  If employees are sold on the change then I think both companies and unions would be happy to get out of the health care business.

But, of course, this change would not free any money up to pay for a presumably more expensive (in the short run) health care system.  If nothing else, a new money stream would have to replace the old money stream of company (possibly to union) to insurance company to health care provider path.  The health care people need to get paid somehow.

If we use a government system then inevitably, taxes would have to go up.  Theoretically, the taxes of the employees and union members could go up the same amount as their increased take-home pay without harming them.  But that is hard to do and even harder to sell.  The Warren wealth tax represents an alternative source.  She is already planning on dedicating a large amount from it to cover health care costs.

And I'm sure many of you can lay out your own objections to what I have just laid out.  And the fact that it is so easy to come up with objections to changes in health care is why it has been so hard to improve the system.  But it is important to note that health care costs are going to go up if we do nothing.

They will go up because people will find new, expensive ways to improve one or another aspect of health care.  They will then proceed to find a way to get paid.  But the current system compounds the problem by piling all the inefficiencies and inconsistencies of our current system on top.  The current system magnifies cost increases.

An option that is getting talked up a lot is "Medicare for All".  Now, you need to be 65 or disabled to qualify for Medicare.  And, in theory, it is paid for by Social Security taxes.  The whole thing is calculated so that, on average, a senior citizen has contributed enough over the years to cover the cost of Medicare in his/hers golden years.

But the "Medicare Trust Fund" will run out of money in about a decade, according to most estimates.  So there really isn't enough money to fund the current system.  Medicare expansion proposals vary from lowering the eligibility age by a modest amount to, in the most extreme proposals, opening Medicare up to literally everybody.  Some proposals let people voluntarily opt in to Medicare.  Others make it mandatory.

It is important to understand that Medicare is just a big, government run, insurance plan.  There are no executives pulling in millions but, in terms of analysis, it's an insurance plan.  So it's like France.  So, if we were sensible about these sorts of things, which we are not, we could look to France for ideas about what to do and what not to do.

The reason that people talk about Medicare is that it has a good reputation.  It provides a good quality product with far less overhead than insurance plans.  But there is lots of bureaucracy/paperwork involved.  Those paper shufflers in doctor's offices spend a lot of time dealing with Medicare.  And it is important to understand that Medicare is not the whole solution.

I am on Medicare.  But I also have a "Medicare Supplemental" plan.  Medicare doesn't cover everything.  It just covers a lot of things.  That leaves a lot of gaps.  The combination of Medicare and my supplemental plan provides me with a level of coverage that I am happy with.  Just plain Medicare would fall far short.

The supplemental plan costs money.  I can afford it so I pay.  But what about people who can't pay.  Mostly, the "Medicare for All" people don't talk about this problem.  It's not their fault. There is so much BS and noise being thrown around there really isn't room for a discussion of this issue.

If we could get to a point where the BS and noise people shut up or were shut up then a discussion of this and many other topics would be possible.  (One reason they throw up the BS and noise is because they don't want these subjects discussed sensibly.)  But far too many people powerful people benefit from injecting BS and noise into the discussion of subject after subject for me to believe that is a problem that will be solved soon.

If at this point you are saying to yourself "I hate all the options, even the option of doing nothing" then you have been paying attention.  (And I hope you can now engage with the subject with a clearer understanding.)  But it is important to understand that it is possible to make the current system worse.  A repeal of Obamacare without replacing it with something that is as good or better is just the most obvious example.

But this is a subject, like climate change, where doing nothing is not really an option.  So I applaud all of the people who I think seriously want to improve the situation.  Even if I don't think a plan has much of a chance, just thinking about that plan make a change for the better more likely.

Finally, if you want a "glass half full" way to look at this, here's one.  If you are going to do something about one problem and ignore another one, do something about climate change and ignore health care.  If you think things look bad when you look at the health care landscape, trust me, things look far worse when you look at the climate change landscape.