The right eloquence needs no bell to call the people together and no constable to keep them. ~ Emerson

Wednesday, July 22, 2009

Economics, Healthcare, and Social Justice

We Will Never Achieve Universal Coverage so Long as We View the End of Healthcare Reform as a Viable Tradeoff with the Means

Senator Ted Kennedy of Massachusetts is someone with whom I have often disagreed over the years. Nevertheless, he makes a valid point in the current issue of Newsweek when he observes, “Social justice is often the best economics.”

Such thinking is not always intuitively obvious. Traditionally, we look upon caring for society’s less fortunate, although as noble endeavor, as a “nice to have” rather than a necessity. Charitable causes are those we take up only after first ensuring we have excess funds left over to meet our own needs.

Yet if we are honest with ourselves, there is often a gap between our ability to afford charity and our willingness to do so. It is only human nature to upgrade our own wants to needs and dismiss the needs of others as selfish wants.

It is also human nature to see only the up-front costs associated with a particular action, without acknowledging or under-valuing its long-term rewards. The same is true for the opportunity costs associated with inaction.

In the case of healthcare reform, Kennedy posits, “If we don't reform the system, if we leave things as they are, healthcare inflation will cost far more over the next decade than health-care reform. We will pay far more for far less – with millions more Americans uninsured or underinsured.”

As President Obama pressures Congress to enact healthcare reform this year, three separate bills have emerged between the House and Senate. The Washington Post notes today that a common thread running through all of them is a mandate for every adult American to carry health insurance.

The impact of such a mandate is twofold. First, it means the forty-seven million individuals without health insurance will be required to purchase it (possibly with subsidies) or face financial penalties. Second, it means all but the smallest businesses will be required to contribute to the cost of their employees’ healthcare.

If these bills end up dying, it will be because certain legislators objected to them on the basis they cost too much (i.e. they will contribute too much to the already burgeoning deficit) and they insufficiently contain the drivers causing current healthcare costs to spiral out of control. In addition, there are fears a government-run option – to cover the poorest, oldest, and sickest individuals normally rejected by private insurance – will eventually swallow up private insurance and lead to inefficient, bureaucratic socialized medicine.

These are all practical, reasonable concerns. Republicans and moderate-to-conservative Democrats, sometimes referred to as “Blue Dog Democrats”, are primarily those voicing them in Congress. At the heart of the debate is whether their concerns justify halting healthcare reform in its tracks. Columnist Michael Gerson praises Blue Dog reticence as “a self-correcting mechanism that is Madisonian in its balance and elegance,” whereas columnist Harold Meyerson bemoans their attitude as the reason why “America is now the world's leading can't-do country.”

The problem I see with the cost-conscious crowd is that they apparently view failing to achieve the end of healthcare reform as a viable tradeoff for failing to achieve doing it by their desired means. In other words, quite a few of us view leaving one-sixth of our fellow Americans uninsured as a perfectly acceptable price to leave our red ink ever-so-slightly pinker as well as retain our own coverage without changes.

Yesterday, forty Senators voted, in a losing cause, to continue production of the F-22 fighter jet, despite the fact that neither the Defense Department nor the Pentagon view it as viable weapon for the future, because it will likely mean a loss of jobs which their states cannot afford. Some of those same Senators will undoubtedly also vote against healthcare reform with universal coverage that would help protect their constituents against catastrophic hardships – like losing their jobs – because they cannot afford it either. Why are we forsaking something everyone needs for things nobody does?

Many may object that universal coverage is really the end goal of healthcare reform. A recent poll by Rasmussen found that voters saw controlling costs as a bigger problem than lack of universal coverage in healthcare reform by a whopping forty percent margin. Yet when presented with a choice between health care reform and a tax hike versus no health care reform and no tax hike, the preference for lowest possible cost drops to a mere six percent advantage.

Even with our natural instinct for selfish concerns, most of us recognize the inherent unfairness of the current healthcare system.

The principal goal of healthcare reform is and always has been ensuring a minimum level of basic coverage for all. Pricing of services, who provides/oversees those services, and who pays for it are all aspects of how we achieve that goal.

Our nation and our society possess the wealth to pay for universal healthcare, even in these bleak economic times. The question is how much we are willing to spend and what other things we are willing to forego in order to achieve it.

As Meyerson notes, Blue Dogs and other conservatives seem appalled at “the notion that actual individuals might have to pay to secure the national interest.” They venerate soldiers who give their lives to keep other people’s children free. They stand aghast at giving up a few of their own dollars to keep other people’s children healthy. They call the latter action socialism. I call both actions patriotism.

If healthcare reform requires spending that will increase the deficit, then increase the deficit. If it will require tax hikes on the wealthy and middle class alike, then hike taxes. If it means European-style socialized medicine, then hello socialized medicine. Just get it done and make universal coverage the reality.

None of this means we should not look for ways to reduce costs, improve quality, and increase individual choice – both in the current legislation and in the future. However, we must view these things within the constraint of universal coverage and not as a tradeoff against it, as is too often the case today.

Sometimes positive economic outcomes occur in unexpected ways. The much-maligned healthcare reform initiative in Massachusetts fell short of its goal of universal coverage, with eighty-six thousand of its nearly four million tax filers preferring simply to pay a penalty and opt out. At the same time, the state mandate spurred nearly one hundred and fifty thousand individuals to purchase employee-provided health insurance they had previously avoided as a cost savings. Many of these newly insured were relatively young and healthy, putting more into the system than they took out.

For those grumbling over government intervention, it is hard to see any benefits offsetting the increased price being asked of us – both in terms of dollars and sacrificed individual choice – until it is our spouse or child diagnosed with cancer requiring specialized treatment, our elderly parent diagnosed with Alzheimer’s requiring long-term assisted care.

We take out insurance to protect our immediate families and ourselves. We form governments to protect ourselves as a larger collective. It is understandable human nature to balk at writing out a big check for health insurance, as a family or as a government. It seems the height of pragmatism to go slower. However, we have been using going slower as an excuse for going nowhere too long where healthcare is concerned.

The day a democracy denies social justice to some of its members because it is not economically justifiable is the day it ceases to deserve either justice or democracy.


Hamster said...

It would be more meaningful if you referenced a reputable pollster.
If you believe any poll that Rasmussen puts out you might as well believe in Santa Klaus.
Rasmussen is well known for it’s providing Republicans with the best polling that money can buy.
From widipedia:
Scott Rasmussen was a paid consultant for the 2004 George W. Bush campaign. Rasmussen presidential polling numbers tend to be an outlier among samples taken from other polling organizations. Others have pointed out that the reason Rasmussen’s polls trend more Republican than other mainstream polls is simply that he samples likely voters. [11] John Marshal of Talking Points Memo has said, “The toplines tend to be a bit toward the Republican side of the spectrum, compared to the average of other polls. But if you factor that in they’re pretty reliable. Networks such as MSNBC simply do not use Rasmussen polls. Conversely, conservative media frequently refers to Rasmussen, praising them for being the first to ask about a relevant issue or to ask questions that other polsters do not.

TheBell said...

Hi, Hamster. It has always been my personal observation that Rasmussen tilts more conservative than other polls and I take their results with a grain of salt for that reason. However, in this case, I thought that only made the relatively small dichotomy between fear of socialized medicine and dissatisfaction with the current system that much more striking. Thank you for your reply.