Saturday, August 15, 2009

Health Care Reform Debate as of August 15, 2009

My friend Christy's Dad, Jerry (whom I also consider a friend) posted his thoughts and questions about the healthcare reform debate going on in our country as we speak.

I enjoyed reading the post and decided to respond with some thoughts of my own. Read Jerry's first for context. (And to my Republican and libertarian friends, if you'd like an example of how to make your case without becoming apoplectic, take a page from Jerry.) Quotes are his thoughts, non-quotes are mine:


"I believe one reason is that the insurance companies are the sector that the federal government can replace. The government cannot act as doctors, they can't invent new drugs like the drug companies, they wouldn't dare touch the lawyers, and they wouldn't run a hospital.... that would involve bedpans. Bedpans and bureaucrats don't mix. The insurance companies have money and power. Ripe for federal takeover."

First, assuming this observation is correct, is there anything wrong with the government acting upon the one factor it can change in order to do good? Should it do nothing because it cannot do something to each of the facets of the problem you mention?

Second, though I'll admit insurance companies draw a lot of rhetorical fire, my understanding is that doctors and drug companies are going to have to settle for lower, negotiated prices -- or at least that that is an option that's being debated. Moreover, lawyers are "touched" all the time by politicians at state and national levels -- at state levels with damage caps, and at the national level with bills that restrict rights to sue at all. (See, e.g., here.) To consider who has better lobbyists, and thus who has a better shot at a fair shake in Congress and in state legislatures, ask yourself when was the last time you heard "greedy neurosurgeon" or "dirty obstetrician" used as a pejorative the way "trial lawyer" is every day. The guys who defend the insurance companies are "trial lawyers" too, but somehow I don't think that's who the politicians have in mind when they use the phrase.

I think most attorneys are open to genuine tort reform, but when it's used as a euphemism and a stalking horse for "damage caps," it's no good. Damage caps take from the "trial lawyers" to give to the members of the AMA and ADA and hospitals and drug companies, etc. -- a Peter and Paul situation. This is to say nothing of the fact that the most serious injuries would be undercompensated. One of the cases we had in torts was Quintal v Laurel Grove Hospital (62 Cal. 2d 154, 397 P. 2d 161, California, 1965), in which, according to a site I used to refresh my memory, "a 6-year-old patient [little Reggie Quintal] undergoing an operation to correct the inward deviation of his eyes suffered severe brain damage as the result of a cardiac arrest." "During the administration of the anesthetic, [Reggie] suffered respiratory arrest followed by a cardiac arrest. The ophthalmologist did not feel competent to administer a manual massage of the heart. In the few minutes it took to locate another surgeon, the patient suffered irreversible brain damage."

It turned out that there was reason to believe Reggie had a fever before he was anaesthetized -- for cross-eye surgery -- and he either shouldn't have been anaesthetized and operated on, or the doctors should've had a cardiac surgeon on hand just in case. Afterwards, someone fudged his charts to cover that up. So a six-year-old kid goes in for cross-eye surgery and comes out "a spastic quadriplegic, blind and mute" -- for the rest of his life, and say you have a $1,000,000 damage cap. For the guy who loses his pinky toe from staph infection, $1,000,000 should cover it, but for Reggie, who'll have to be cared for constantly and carefully for the rest of his life, even after his folks are gone, how can that be enough? (Quintal actually got $400,000 in 1965 money, which Inflation Calculator tells me would have been $2,702,339.07 in 2008.)

One of the most interesting discussions in which I ever participated in law school concerned the idea that health care costs could be brought down, doctors' malpractice premiums lowered, and people's real injuries could be more quickly and efficiently compensated if we would do away with our fault system altogether. (My torts professor, Roger Dworkin, was the one who facilitated the discussion, though I don't remember if he came up with the idea or just threw it out for debate.)

The issue of whether docs are negligent is the one that usually takes up the bulk of the time and money in medical malpractice lawsuits; it's almost always a foregone conclusion that an injury has happened -- a limb is lost, a baby has been brain damaged, etc. -- and it's usually not that hard to prove what caused the injury. The experts, and the tests, and the dog-and-pony shows put on for juries, are all about whether the docs were negligent. So, instead of paying insurance companies, who then pay "trial lawyers" to defend doctors by spending years litigating whether or not a doctor was negligent, why not have doctors pay into an "injury kitty?" Then, if their actions cause an injury, the injured party is compensated without litigation -- or at least without extensive, expensive litigation -- and the doctors are never called "negligent" or "bad." Billions that under our current system evaporate to pay experts, jury consultants, and attorney fees would either stay in the doctors' pockets or the kitty, or transfer to injured parties. And trial lawyers and doctors would both have to cede a little territory.

Of course, besides the fact that people would call it "socialism," another problem would be that doctors would have less incentives to practice careful medicine if they didn't face the possibility of the stigma of negligence. However, that would already result from more common forms of tort reform that are suggested today, such as damage caps, in which the most negligent doctors would get a windfall because their insurance policies would not have to pay the full amount for their most egregious injuries. So the incentive argument cuts against both types of reform and doesn't favor one over the other.

Anyway, moving on...


"Another large segment of the uninsured, consists of individuals who could afford insurance, but choose not to be covered because they are healthy and will 'take the risk.' Are we going to force them to buy insurance?"

Answer: yes. And why? Precisely because when they do get sick or injured, they show up at the emergency room and get treated anyway. Then, if they can't afford to pay the bills, they take out a second mortgage on the home, or take bankruptcy, or both. If they're 22 and single, terrific. If they're 40 with a wife and six kids, where do those kids live? Who takes care of them when Risk-Taking Daddy mucks up the family's finances because he didn't want to buy insurance? The State does, i.e., taxpayers do.

I guess one alternative is to say "tough luck" and literally to turn away the people who could have afforded insurance but chose not to. Cancer, AIDS, lupus, head trauma from a car wreck, whatever it is, tough luck. Go die, and let your kids work or beg. There are two problems with that. One, as a generally compassionate society, I doubt many people could bear the thought of denying needed care, particularly when it would affect the innocent members of their families. Two, as a practical matter, if these people lose everything, or the kids are left orphans -- or the worst of both worlds, if Risk-Taking Daddy loses every bit of the money on his healthcare and still dies, leaving them orphans -- or if the kids turn to crime or don't amount to anything because they had to go pick beans instead of going to school or learning a trade, we all suffer from that.

So I think it's within reason for the government to say, "If you can afford health insurance, you have to have it," not because the government wants to take away individual liberty, but because the risk those individuals take is a risk that affects the rest of us. (I wasn't around when the debates over mandatory seat belt laws took place, but I imagine their rationale was much the same) And if people can't afford insurance, it's within reason for the government to decide that it will be cheaper to subsidize or provide insurance that will ensure preventive care and yearly maintenance than it is to wait until all the uninsured all show up at the ER with their hands out for a Kleenex and a $1000 Tylenol.


"There's one reason why an insurance company wouldn't cover pre-existing conditions: If they did, everyone with a terminal illness would immediately buy a policy from that company, and the company would go broke paying all the claims."

Yes, but to me, this is just as much an argument for a "government option" as it is an argument against forcing companies to cover pre-existing conditions. The government, as spender (and, sadly, borrower) of last resort, could afford this sort of thing. Of course, if a mandate were instituted, one would think that the "gold rush" to insurance would only happen once.

"There's one other consideration when forcing the insurance companies to cover pre-existing conditions. If they did, millions of people (myself included) would immediately cancel their insurance policies, saving thousands of dollars, knowing that if they got sick, they could then buy a policy and be covered."

That's only true if you don't require people who can afford it to purchase insurance. If you do, people can't cancel their policies to wait until they need them.

Oh wait, you say that here: "The only way pre-existing coverage works, is if insurance coverage is mandatory for everyone."

"Hillary Clinton wanted mandatory insurance for all, but Obama mocked her for forcing everyone to buy insurance."

That was more a matter of Obama's needing to draw a distinction between himself and Clinton at a critical time in the primary race than any real opposition to mandates, I think. The whole scheme has to have mandates. Otherwise, you've got something analogous to Social Security for all, paid for by an optional income tax.


"The 60% number comes from the politicians, not the 'bastards' at the insurance companies."

Two things. One, I'm sure there are bastards enough to go around for many of these facets of a very big problem. Two, presumably there are mandates the state regulators could make that would be too demanding to make business in Illinois profitable, and the insurers would go elsewhere. That highlights the benefit of a federal plan: if the requirements are the same nationwide, there's nowhere for the insurer to go that would be any better than Illinois.


"Everyone thinks that they're grandma should get the new hip."

I agree that everyone can't have everything. But my very limited understanding of Medicare is that the decision is based on whether a procedure is widely accepted, whether it is medically necessary, and whether it is likely to be successful. Those are still exacting criteria that can lead to painful results for ill people and their loved ones. But there is a difference between evaluating claims based on whether the procedures or treatments are likely to have the desired effect -- i.e., what Medicare does now -- and basing the evaluation in part on profit motives (private insurance) or on some Nazi consideration of whether the recipient can be restored to useful service of the Vaterland (Obama death panels, which I recognize you do not see as a legitimate fear). These are hard questions -- ones that Obama says he has grappled with himself and empathizes with -- but the solution is not to do nothing. It's not as if the choice is between Grandmas getting hips or not getting hips. It's between insured grandmas having the potential to get new hips and uninsured grandmas without the potential for new hips, regardless of discomfort or pain. (Unless it's an emergency, and then we go back to the ER/snotty nose scenario.)

"For those of you who are comfortable with Obama appointees making the decisions, would you be comfortable with McCain/Palin appointees in the same role?"

Yes, or at least as comfortable as I am with a panel at an HMO making the decisions (so long as Palin herself wasn't on the panel). To the degree that we have any power as citizens in a representative democracy, if we decided that we didn't like the way the bureaucrats were running things, we could fire their boss in the next election and demand they be replaced for incompetence or flagrant misapplications of the law. I'll grant you that that is a diluted and limited avenue for redress. But what's the avenue with HMOs? Switch to another insurance plan -- that probably won't cover our pre-existing condition that has caused us to want the care the first HMO wouldn't provide? I'd feel just as safe or safer with the government bureacrats.

(Plus, do you really think a bureaucrat would be as worried about saving the taxpayers money by denying claims as an insurance company employee would be worried about guarding profit margins for shareholders by denying claims? When I worked for the Indiana Department of Workforce Development deciding whether people were entitled to unemployment insurance or not, I never once considered whether granting a claim would cost the State money. Meanwhile, if I were an insurance company employee and never thought about keeping costs low, I'd probably -- and properly -- be fired.)


"Our plan will be 'banned' by the Obama administration."

Who is saying this? Aren't there about five separate bills floating around in the House and Senate right now? Do they all ban your plan? I thought the Obama Administration didn't have any plan but had left it to Congress to hash out. Is that not correct?

"I would imagine that many plans will not be 'in compliance.' Sorry ... we're taking that away from you."

One thing that has been interesting -- and disappointing to me as a liberal -- is that Obama hasn't to date been much more inclined to ask people to sacrifice for the common good than Bush was. I didn't support the war in Iraq, but I think if I'd been asked to pay more taxes to make sure everyone had armor and good medical care in the military, I'd have done so. And I'd be happy to make small sacrifices now if it meant that a greater number of people would be brought into the circle.

What is more bothersome to you: (1) the idea that proponents of healthcare reform aren't telling people that their plans may change, or (2) the fact that plans may change? If it's the former, I agree. If it's the latter, what level of common sacrifice, if any -- in the forms of higher taxes, or higher deductibles, or higher premiums -- do you think would be an acceptable level to ask from the American people to accomplish the goal of universal or near-universal coverage? Isn't this just a way of helping our neighbors by working together in a way that we couldn't help those neighbors as individuals ourselves, by say paying the insurance premiums for their families directly, out of pocket?


"FedEx delivers about 7,000,000 items each day. UPS delivers about 14,000,000 each day. The Post Office? Over 600,000,000 items are delivered each day. Nobody can compete with the Post Office in rural areas, where it cost much more than 44 cents to deliver a letter."

Why isn't that an argument for a government plan? I love the Post Office. I have everything shipped USPS, because UPS won't leave packages at my door. I can drop a card in the mail at Lake and La Salle, and it can be in southern Illinois the next day and in California in two days. I'm happy to pay for a $.44 stamp, and I'd be happy to pay a higher rate, or to pay a higher tax for a subsidy to keep the service good. I think it's one of our best American success stories.

Are FedEx and UPS doing the same level of business as the USPS? No. Are they going out of business? Nope. They're doing fine. Without their good service and competition, the Postal Service would probably relapse into the kind of lethargy that the character Newman embodied on "Seinfeld." Competition doesn't have to mean equality. There are things FedEx does that the USPS cannot. When I've tried to mail something express via postal service, I'm not kidding you, it has sometimes taken weeks, if not months. I don't know why, but express mail is where packages go to die. Meanwhile, FedEx can get something somewhere overnight.

In the same way, I imagine that people who can afford it are still going to want the private insurance, so they can have the options to pay higher premiums to get more ridiculous coverage -- emergency botox, say, or annual pig-heart transplants. I doubt very seriously we're going to see all the traders at the Merc and the investment bankers and the greedy trial lawyers and the dirty neurosurgeons clambering to get into that "government option." There'll still be plenty of middle and upper-middle class people who want private insurance options.