Continuing the Case for Health Care Reform

Fareed Zakaria is one of the most balanced, sensible reporters and commentators on international affairs going today. Because of this, he brings a global perspective to American domestic issues that many of the pundits lack. In this week's Time Magazine, he has a commentary entitled, “Health Insurance Is for Everyone” (CNN shows about half the article, the entire piece is on Time’s website that is accessed by subscribers).  In it he writes,

The centerpiece of the case against Obamacare is the requirement that everyone buy some kind of health insurance or face stiff penalties--the so-called individual mandate. It is a way of moving toward universal coverage without a government-run or single-payer system. It might surprise Americans to learn that another advanced industrial country, one with a totally private health care system, made precisely the same choice nearly 20 years ago: Switzerland.

Switzerland is not your typical European welfare-state society. It is extremely business-friendly and has always gone its own way, shunning the euro and charting its own course on health care. The country ranks higher than the U.S. on the Heritage Foundation's Index of Economic Freedom.

Twenty years ago, Switzerland had a system very similar to America's--private insurers, private providers--with very similar problems. People didn't buy insurance but ended up in emergency rooms, insurers screened out people with pre-existing conditions, and costs were rising fast. The country came to the conclusion that to make health care work, everyone had to buy insurance. So the Swiss passed an individual mandate and reformed their system along lines very similar to Obamacare. The reform law passed by referendum, narrowly. The result two decades later: quality of care remains very high, everyone has access, and costs have moderated. Switzerland spends 11% of its GDP on health care, compared with 17% in the U.S. Its 8 million people have health care that is not tied to their employers, they can choose among many plans, and they can switch plans every year. Overall satisfaction with the system is high.

Zakaria continues,

The most striking aspect of America's medical system remains how much of an outlier it is in the advanced industrial world. No other nation spends more than 12% of its total economy on health care. We do worse than most other countries on almost every measure of health outcomes: healthy-life expectancy, infant mortality and--crucially--patient satisfaction. Put simply, we have the most expensive, least efficient system of any rich country on the planet. Costs remain high on every level. Recently, the International Federation of Health Plans released a report comparing the prices in various countries of 23 medical services, from a routine checkup to an MRI to a dose of Lipitor. The U.S. had the highest costs in 22 of the 23 cases. An MRI costs $1,080 here; it costs $281 in France.

In 1963, Nobel Prize--winning economist Kenneth Arrow wrote an academic paper explaining why markets don't work well in health care. He argued that unlike with most goods and services, people don't know when they will need health care. And when they do need it--say, in the case of heart failure--the cost is often prohibitive. That means you need some kind of insurance or government-run system.

Now, we could decide as a society that it is O.K. for people who suddenly need health care to get it only if they can pay for it. The market would work just as it works for BMWs: anyone who can afford one can buy one. That would mean that the vast majority of Americans wouldn't be able to pay for a triple bypass or a hip replacement when they needed it. But every rich country in the world--and many not-so-rich ones--has decided that its people should have access to basic health care. Given that value, a pure free-market model simply cannot work.

In the campaigns for president, it seems that the conservatives have changed their tunes on requiring mandate for everyone to be included in health insurance. Zakaria observes,

Catastrophic insurance--covering trauma and serious illnesses--isn't a solution, because it's chronically ill patients, just 5% of the total, who account for 50% of American health care costs. That's why the Heritage Foundation, a conservative think tank, came up with the idea of an individual mandate in the 1980s, proposing that people buy health insurance in exactly the same way that people are required to buy car insurance. That's why Mitt Romney chose this model as a market-friendly system for Massachusetts when he was governor. And that's why Newt Gingrich praised the Massachusetts model as the most important step forward in health care in years. They have all changed their minds, but that is about politics, not economics.

He concludes,

When listening to the debate about American health care, I find that many of the most fervent critics of government involvement argue almost entirely from abstract theoretical propositions about free markets. One can and should reason from principles. But one must also reason from reality, from facts on the ground. And the fact is that about 20 foreign countries provide health care for their citizens in some way or other. All of them--including free-market havens like Switzerland and Taiwan--have found that they need to use an insurance or government-sponsored model. All of them provide universal health care at much, much lower costs than we do and with better results.


Byron Harvey said...

I will resist the strong urge to tackle the argument, except to say that if Zakaria's other facts stack up with the factuality of this one statement, then the whole argument would seem highly dubious. He wrote, "the Heritage Foundation, a conservative think tank, came up with the idea of an individual mandate in the 1980s, proposing that people buy health insurance in exactly the same way that people are required to buy car insurance."

People are categorically not "required to buy car insurance." Again, granting that this seems a minor point, it nonetheless could illustrate a looseness with the facts on the part of Zakaria, and calls into question his credibility.

Bob Robinson said...

Every state but New Hampshire requires drivers to purchase liability insurance. And every state has some form of a financial responsibility requirement (that the person can pay for liability) in order to drive. About.com has a list of each state's required car insurance.

While this requirement is determined by the states, it is pretty much across-the-board that we are required to buy car insurance. This is why companies like Sage Auto are in business, "offering you the highest quality yet cheap car insurance that meets your state's minimum coverage requirements for auto insurance."

Be that as it may, Zakaria is dead right about The Heritage Foundation and conservatives like Newt Gingrich one time supporting an individual mandate. Check out this article from Forbes Magazine: "The Tortuous History of Conservatives and the Individual Mandate"

Bob Robinson said...

...That's "Safe Auto"...

Byron Harvey said...

You missed my point, Bob. No state in the country requires everyone to buy car insurance. None. Zero. Joshua McLean is a 23-year-old young man who is a friend of mine. Sandi Dalton is a 19-year-old friend of mine. Joshua lives in GA, and Sandi in NC. My friend "Miss Dotty" is 95. None of them have car insurance, and none of them is required to purchase it, nor would they be regardless of which state they lived in. Certainly you know why this is the case: they are not drivers.

But this is far, far from a technicality; rather it is the point that makes the point. This Obamanation that is being foisted upon us requires every single person to purchase health insurance, or to face a fine, simply as a result of breathing, which is a right, unlike driving, which is a privilege. Ergo, my comment about Zakaria's shaky grasp on that crucial fact, which raises questions about both his reasoning and his command of the facts in other areas.

Bob Robinson said...

Umm... Byron, I think you misread Zakaria's statment.

Zakaria is reporting that it was the Heritage Foundation that "came up with the idea of an individual mandate in the 1980s, proposing that people buy health insurance in exactly the same way that people are required to buy car insurance."

Zakaria is not making that claim himself, he is reporting that this was the claim of Heritage. Zakaria's point is that the health care system is so broken in America that even the conservatives at one time advocated for the mandate. And this also serves to reveal that those who point at Obama and claim that he conjured up this idea of a mandate as some socialist idea are simply not being factual to history.

In 1989, the Heritage Foundation's Stuart M. Butler gave a lecture titled "Assuring Affordable Health Care for All Americans."

In this lecture, Butler outlined "the Heritage plan." What was Point #2? "Mandate all households to obtain adequate insurance."

Butler's statement under point #2:
"Many states now require passengers in automobiles to wear seatbelts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement."

He goes on to say, "This mandate is based on two important principles. First, that health care protection is a responsibility of individuals, not businesses. Thus to the extent that anybody should be required to provide coverage to a family, the household mandate assumes that it is the family that carries the first responsibility. Second, it assumes that there is an implicit contract between households and society, based on the notion that health insurance is not like other forms of insurance protection. If a young man wrecks his Porsche and has not had the foresight to obtain insurance, we may commiserate but society feels no obligation to repair his car. But health care is different. If a man is struck down by a heart attack in the street, Americans will care for him whether or not he has insurance. If we find that he has spent his money on other things rather than insurance, we may be angry but we will not deny him services - even if that means more prudent citizens end up paying the tab.

A mandate on individuals recognizes this implicit contract. Society does feel a moral obligation to insure that its citizens do not suffer from the unavailability of health care. But on the other hand, each household has the obligation, to the extent it is able, to avoid placing demands on society by protecting itself."

It's all there on page 6 of this document: Assuring Affordable Health Care for All Americans.

Byron Harvey said...

No, Bob, don't think I misread at all; I understand the bigger point he's making, and I wasn't addressing that at all. Rather, I was taking exception to the mistaken notion--one that is not in quotes as though it came from the Heritage Foundation, but rather is one of his own--that people are required to buy car insurance. Now, if this is what the Heritage Foundation actually said, rather than what seems clearly to me to be his editorial addition, then I stand corrected, but it doesn't read that way to me. I am merely making the point that if he can't get something as simple as that correct, his credibility is in question. That's all I'm saying.

Further, I would agree that the Heritage Foundation, if they are advocating against ObamaCare, is in a difficult, even contradictory position, as are any others who advocated for the individual mandate. I personally recall when Romney put RomneyCare in place in Massachusetts. My initial thought at the time was, "that's a good idea!"...and then, pretty quickly, I came to the same conclusion I've held since then: pragmatics (assuming that pragmatically it's a good idea) don't make up for the unconstitutionality of the thing, and it's unconstitutional whether advocated by liberals, moderates, or conservatives; I could care less who chimes in in favor. The government does not have the constitutional prerogative to force me to spend money as a condition of being a citizen. Which is what I believe the Supreme Court is likely to conclude, and which, interestingly enough, Zakaria studiously avoids in his article. He'd rather talk about Switzerland, the history of the Heritage Foundation, a Nobel prize-winning economist (not of much value, IMHO), Newt Gingrich, and a bucketload of pragmatics: anything, everything, but the law of the land.

In short, if we don't like what the Constitution says, there are means provided to us in it by which we can amend it. But it steals freedom from all of us when we treat the Constitution as a take-it-or-leave-it document, and it is extremely difficult to envision the framers of the Constitution imagining that Americans would be forced by a massively-bloated federal government to pay money just in order to breathe American air.

Bob Robinson said...

You say, "Now, if this is what the Heritage Foundation actually said, rather than what seems clearly to me to be his editorial addition, then I stand corrected."

Well, what does the quote above from the Heritage Foundations "Assuring Affordable Health Care for All Americans" say to you? Did they not state that their plan called for a mandate for all households to obtain adequate insurance? Did you not read that? If after reading that, you cannot understand that Zakaria was referring to this document, then I have to just throw up my hands and give up.

Bob Robinson said...

If I understand your argument correctly, you are saying that since Joshua McLean and Sandi Dalton and "Miss Dotty" don't drive a car, they are not mandated to buy auto insurance. That makes sense.

But what does not make sense is this:
Have Joshua or Sandi or Miss Dotty ever required health care? Most likely yes. If not, then 95-year-old Miss Dotty has been a miracle! She has never needed to go to the doctor! Wow! And she will never need anything like a hip replacement or cardiac work or maybe (God forbid!) care for Alzheimer's.

Your rhetorical device of saying that those who do not drive a car don't need car insurance and therefore those who breath do not need health insurance doesn't make sense to me. Why? Because everybody at some point in their lives will most likely need health care.

The fact is this: Whether or not they want to acknowledge it, they are already part of the health-care market, because even if they refuse health care insurance, their decision affects the entire country's health care costs.

The Commerce Clause is an enumerated power listed in the United States Constitution in Article I, Section 8, Clause 3. The clause states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

This will be the main argument in favor of this being constitutional: Congress has the power to regulate interstate commerce, and health care, as a national commercial market, falls under this jurisdiction. And on top of that, they will argue that everybody is already a part of this market, whether they buy health insurance or not.

Why is every US Citizen, including those who do not carry health insurance, a part of the health care market? Because 2/3 of what the uninsured are billed for their health care they cannot pay, so they pass that bill onto everybody else. The average hospital bill for somebody who is not insured is $22,000. The average premium add-on to cover the uninsured for all of us who have family coverage is over $1,000.

Congress' role in the Commerce Clause of the Constitution gives congress to power to do something when the United States spends $2.5 Trillion on health care, 17% of its GDP. That's about 1 out of every 6 dollars.

Byron Harvey said...

Once again, Bob, I think you miss my point. For the record, I do not deny whatever that the Heritage Foundation at one point, at least, was in favor of a universal mandate. No argument there, though its relevance is minimal, IMHO; the fact that the Heritage Foundation was wrong in the past (and for all I know, still may be; I don't follow them) doesn't make any difference to me. If they're against it now, want to call 'em two-faced? Fine by me; I could care less. My point was, did the Heritage Foundation use the car insurance analogy, or did Zakaria? I read it as Zakaria's words; if I'm wrong, I stand corrected, but it's an invalid analogy no matter who uses it.

Further, you misunderstand what I'm trying to say relative to Miss Dotty, et al. I did not say at all that those like Miss Dotty do not need health insurance! I have health insurance, and I think everyone ought to have it, in a perfect world, if they choose to make such a purchase...but I wasn't even talking about health insurance, Bob. I was merely making one point: Zakaria's analogy holds no water. People are not required to buy car insurance (as you grant). That's all I was saying, in addition to suggesting that his misunderstanding on that point costs him credibility points. Driving is a privilege; breathing is a right. If one chooses not to take part in the privilege (driving), then one is not required to purchase insurance. There is no valid analogy to be made between the two.

As to your argument regarding the Commerce clause, George Will's column today in the Washington Post answers your objection far better than can I. If the government successfully forces Americans to enter into contracts, on threat of financial penalty--something that has never been done before, something that courts have found unconstitutional before--then there shall logically be beyond any stopping point in the future. Congress will have precedent to use whatever "compelling need" it sees fit to force Americans to do whatever the heck Congress deems, in its "infinite wisdom", to be best for "the American people." The Constitution will finally and fully be relegated to a relatively useless relic.

Finally, it bears saying that while I am steadfastly opposed to Obamacare for a variety of reasons, not the least of which is the violence that the individual mandate does to the Constitution, I blame Republicans and Democrats equally for its existence. George W. Bush twiddled his thumbs for eight years and didn't lift a finger to fix the growing problem, so it's little wonder that when we get a person such as Obama, who is not nearly as committed to markets as GWB claimed to be, we get this unconstitutional bureaucrat's dream of a "solution". A pox on the Republicans and the Democrats for this (and for a whole lot of other things, whilst we're at it).

Bob Robinson said...

It will indeed be interesting to watch how the Supreme Court rules on this. I am not sure, either, about the argument that they will make using the Commerce Clause. I was just stating what they will argue. You have a very valid concern that I share about the limits of government and of over-reach into spheres that are better left to other institutions. At the same time, I am also very concerned about the broken state of our health care system in America.

Byron Harvey said...

And on that last point, Bob, we definitely share common ground.

Ava Addams said...

The NES infoceuticals provide direct correction to the structures (information) of the body-field, unlike homeopathy, herbalism, and other modalities that use indirect, or analogue, correction.