Linda Beale’s blog ataxingmatter pointed us to an excellent article on the failings of the current health care system by Clark Havighurst and Barack Richman at Duke University, Distributive Injustice in American Health Care. It’s a bit of a nuisance getting the article itself (you have to register and get it e-mailed to you) but well worth the trouble.
A big problem that no one wants to address frontally, and that this article highlights, is that a lot of the current mess we are in is structural. Many of the proposals want to preserve the current institutional structure (particularly the health insurance industry), yet the current system doesn’t simply leave many Americans uninsured, it also is deeply regressive. Here is the abstract:
This article explores the hypothesis that the U.S. health care system operates more like a robber baron than like Robin Hood, burdening ordinary payers of health insurance premiums disproportionately for the benefit of industry interests and higher-income consumer-taxpayers. Thus, lower- and middle-income Americans with health coverage pay not only for their own families’ health care but also to support a vast health care enterprise that primarily benefits others, including many far more affluent than themselves. The system is able to finance itself in part because U.S.-style health insurance greatly amplifies price-gouging opportunities for health care firms with market power, creating a cost burden that falls ultimately on all premium payers equally, like a severely regressive head tax. Moreover, these same consumers also bear excessive costs for their own health care because, not seeing the costs they bear with any clarity (since the tax system makes those costs appear to fall on their employers rather than themselves), they demand unnecessarily costly coverage and resist efforts to economize – all to the benefit of the health care industry and others with reasons to value high-cost medicine. Lower-income insureds also appear, for several reasons, to get less out of their employers’ health plans than their higher-income coworkers, despite paying the same premiums. Finally, insured individuals’ lack of cost-consciousness also affects their attitudes and behavior as citizens and as voters, enabling politicians as well as industry interests to make choices on their behalf that systematically raise costs and foreclose economizing possibilities. The burden of excess health care costs and how it is distributed is rarely recognized as the fundamental issue of social justice it is. The purpose of this article is to make the question who pays and who benefits a principal concern of health policymakers.
This is exceptionally strong language for an academic paper. And it is most assuredly representative:
Our explicit concern in writing this article is that, for whatever reasons, the health care system’s exploitation of the many for the benefit of the privileged few has either been overlooked, underestimated, or conveniently ignored by analysts and policymakers. We will also suggest, however, that the regressive tendencies we observe are no accident, but result from a combination of ideology and political economy of health care. Specifically, we see a policy bias – assiduously cultivated by the health care industry and shared by many commentators and policy analysts – in favor of more and better health care for all with only nominal regard for how much it costs and who bears the burden….In particular, we emphasize how policies effectively hiding the true cost of health coverage from the consumer-voters who ultimately bear them enable elite interests to have their way in teh political process, thereby maintaining a system that is rigged against the true interests of the political majority.
The notion of a parasitic health care system working against the interest of society as a whole, while not inconsistent with observed facts, sounds more coordinated and monolithic that all those actors would seem to be (you have health insurance companies, drug companies, doctors, hospitals, etc.). The article continues:
Health care costs in the United States were projected to reach $2.16 trillion in 2006, approximately $7100 per capita and 16.5 percent of GDP. The annual premium for an average family’s health coverage reached $10,800 in 2005, equivalent to nearly 19 percent of the median household’s income. While burdensome to all but the most affluent families, this level of spending can be deemed excessive, in policy terms, only if either (1) the prices paid to providers and suppliers are too high – that is, significantly in excess of competitive prices – or (2) patients regularly receive services or products of such little benefit that the human and capital resources could have been better employed in providing other goods or services. In fact, U.S. health care appears to present both these problems: both supracompetitive prices and inefficiently high levels of consumption, particularly in the intensity of care delivered.
Having lived in Australia, where the quality of health care is comparable to the US at a vastly cheaper price (and without any longer wait for appointments than in New York), I can attest that other countries do a better job than we do.
But the implication of this article is that it will be very difficult to devise a better health care system that builds upon our current institutions (the article discusses not only the usual suspects, the insurance and drug companies, but also medical device makers, the monopoly power enjoyed by hospital groups and even medical practice groups). Yet I don’t see a political consensus emerging any time soon for a single payer system, or the aggressive price controls you’d need to force the current participants into line (for one, doctors would probably quit or repurpose their programs into non-covered “wellness” and anti-aging). One would need to take radical measures on multiple fronts (like creating a new class of medical visas for foreign-trained doctors).