Should We Be Able To Buy Whatever Health Care We Can Afford?

I often find the debate over health care reform blindingly wonkish. It seems to be one of those policy debates in which both sides have good arguments as well as indefensible positions. They, therefore, tend to go to extremes in an effort to explain away the failures of their positions and trumpet the strong points to the point of boorishness.

That may be why I found this article at the Economist Free Exchange so refreshing. It very simply goes to the heart of the inherent conflict between government provided health care and a private system. The central thesis is that somehow we expect the same standard of quality for everyone.

Universal coverage is the objective of policymakers. That is laudable because a population that lacks access to basic health care imposes negative externalities. Quality and quantity of health care, however, are different issues. Expecting uniform quality of care may be mutually exclusive with a health industry that continues to innovate and discover new drugs and treatments. As European countries with socialised medicine have found, rationing and two-tier care are often endemic to universal coverage.

Health care for workers in America generally comes by way of their employers. Even if this is not ideal, Uwe Reinhardt reckons it is not the worst thing. It imposes a cost to firms, but they in theory just pay lower wages. The problem is that smaller firms can end up being penalised more because premiums are based on the perceived risk of the group. There also exists evidence that employer-based health care makes labour markets more rigid.

The scope of policy is to keep employer-based coverage while finding ways to extend health care to everyone else. That involves figuring out how to provide coverage for the group least able to pay for it. One effective solution might be to extend coverage through a government health plan, like Medicare for workers. But providing Medicare-quality coverage to the general population would put an enormous strain on the budget and give employers less of an incentive to provide health care.

A more sustainable solution would be for the government to provide basic care and for private insurance to offer higher-quality care. And that brings us back to our first challenge: regarding health as a good that can be bought. 

In some sense it’s always seemed to me that the debate has always been one really less about accessability than equality. Very few people in this country are denied medical care. People don’t die in the streets. There is an extensive web of government and private programs that deliver at least basic services. If pressed, however, I would probably say that the level of care for those who do not have insurance is below an optimal level and needs to be improved no matter what reforms eventually come to pass.

The conundrum is defining the optimal level. Surely it can’t be the standard that say federal employees and many others fortunate enough to work for large employers with an embedded gold standard for health insurance enjoy. The costs are simply prohibative. But where would be the fairness in asking those who do benefit from superior plans to cut back on benefits? Moreover, what politician would risk suggesting such a solution. 

Taking it a step further, should, as the Economist article asks, health care be a service that can be bought. Would this society tolerate a system in which the wealthy enjoyed access to vastly expanded care even if it were to be purchased with their own money. Or is the guiding principal of any reformed system going to be that no one is entitled to superior health care. 

Hopefully, the issue will be addressed as new programs are hammered out. Not to do so won’t make it go away, instead it will just create one more issue in which two sides continue to jockey for the upper hand.

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