Saving Medicare: a bipartisan compromise
Medicare and Social Security are very popular programs because they have been so successful at lifting our vulnerable elderly population from poverty. As a beneficiary of these programs I can understand why they are liked. But they are in trouble; Medicare in particular, we are told, is unsustainable. The Republican Party platform goes along with their vice-presidential candidate's plan to sustain it by switching to a voucher system; to base it not on defined benefits, as it is currently, but on defined contributions. With the costs of health care continuing to escalate this amounts, in republican speak, to the legitimate rape of our elderly, and often they, as their female counterparts in rape, really have no innate defenses to protect them. Those increased costs under the Republican plan would come down on the elderly; and we're told to role over and enjoy it? Unless the Republicans have something up their sleeves that will reduce the costs of healthcare it is massively unfair. Depending on marketplace pressures, their stock in trade, to fix the problem won't work. It's too good at making money. Why should it stop what it does so well? The government isn't going to buck the money that comes from the system and no one else has the power.
On the other hand Democrats look at successful European programs and inch toward socialized medicine. Having been treated very well and efficiently in a Swedish hospital I am not as averse to that option as most conservatives. Scandinavians also pay for it with a high tax rate on all, but especially the wealthy. In this country that group, together with the bulk of the healthcare industry, who all benefit from its high costs, has successfully sunk any moves in that direction in the past. Even if we chose this direction, and relied on taxes on the wealthy to pay for it, the costs are rising around the world faster than the rest of the economy; the solution is temporary.
Were healthcare a regular industry, like automobiles, we would love to see it grow consistently at near double digit levels, but it's not, and treating it like an industry is a lot of how we got here. Healthcare is a service that we all need at some time or another and needs to be treated as such. Some people also need more of it. Sometimes the reason they need more is their own lifestyle, and many, like the audience that shouted down Paul Ryan's answer, 'that the uninsured can get help at the ER', with "NO!" , balk at covering an others' weaknesses. Sometimes it has to do with where they live. Sometimes it's accidental, or an act of God.
Insuring services is problematic because the demand has no constraints if paid for by the insurer. If we could get someone else to pay for our cars we would all be driving Cadillacs, BMWs, or Lamborghinis; that's why health care is so expensive. That problem was recognized years ago and it led to a variety of regulatory and financial efforts on the part of government, the largest payer for those services since Medicare, to control it--with little success. It's problematic because those choosing a healthier lifestyle may justifiably feel put upon when they are called to help someone who doesn't. It's problematic because it removes the person benefiting from the service from any part in paying for that service. This puts us where we are today, saddled with an overly expensive health care system that strains our ability to pay for it.
This system is complex and adaptive because it is made up of individuals who can read their environments and modify their responses to any imposed restraints in order to continue the high profits. It's like a market in this sense, except that we have removed all of the balancing forces that exist in a market. So what is needed is to find a way to get those forces back to work.
Vouchers are touted to move this direction by giving the individual the responsibility of choosing their insurer, but it's the insurer paying for the service that is the problem. Something else is needed.
Health savings accounts also put the person in charge. They are composed of a savings account and a high deductible insurance policy. The individual is responsible for paying from the savings account for routine health care and the deductible should illness or injury make the insurance part necessary. In current practice any accumulated savings revert to a retirement account at age 65, when the person is eligible for Medicare. As such they are the only mechanism that provides a clear dollar benefit that is an incentive for choosing a better lifestyle and making healthier decisions.
HSAs as they are known are very useful for the healthy in our population who have access to them, but they don't work very well for those who have chronic problems. Conservatives like them because they put the market pressures back into the system. Liberals don't because they are not fair, but they could certainly be made more so. And there is another aspect of HSAs that needs to be looked at, and it never has.
Aaron Antonovsky was an American and Israeli sociologist interested in why some people are healthier than others. He found that healthier people had a better sense of control over their environment; they felt life was meaningful and not just chance. No one has ever tried to put his ideas to a test to see if we could enhance a group's health by enabling them to play with their environment in a healthier way--and this is what HSAs do. We need to know what would happen if a county, or a state, or even Medicaid was set up with government supported, where necessary, HSA's for all of the population and provided primary care physicians who could help these patients make wise decisions in the use of their healthcare dollars.
Adam Smith talked of an invisible hand that guided the market to continued improvement. The lack of transparency in our markets has severely limited, if not destroyed, that function. Setting up a system that is transparent, and educating the patient to enable better decisions, empowers Smith's invisible hand because it empowers the consumer--in Antonovsky's sense--as well as the quality of their choices--which in reality is the invisible hand. We need marketplace medicine, but we need to know how to guide it. Education has always been a community responsibility. Healthcare education is no exception, and it's not socialized medicine.
HSAs provide an opportunity to test these ideas as well as reduce health care costs, which is seen in the areas where they have been implemented. Critics argue that this is because people hesitate to use their own money for preventive services so people wind up with a stage 3 cancer that is harder to treat, or strep throat becomes rheumatic fever. If Public Health were empowered to provide these preventive services as well as the coaching needed for us all to make wiser decisions, healthcare costs would come down as well. In Chicago 's Alternative Medicine Integration Group this kind of medicine is already being practiced, with savings in the range of 60%, and happier patients. If a part of the 60% represents improved health then Antonovsky's idea is borne out. We need a larger scale study.