Thursday, March 04, 2010

There's an expression that goes something along the lines of "a castle built on sand, no matter how strongly built, is still built on sand"... and some of the arguments and theories being offered up in the health care debate are in fact built on sand.

For example, there's a consensus that a big part of the problem is that employers provide health insurance to employees, that this supposed separation of consumer and payer leads to more health care being used and with it, higher prices. According to this theory, forcing people to 'have skin in the game' will lead to less health care being used, lower prices and peace on earth.

But there are a number of problems with this theory: (1) Employees do pay for health insurance in the form of lower wages. (2) Employees also pay for health care in the form of deductibles, co-pays, shared premiums and so on. (3) Even if employees had to pay health insurance themselves, there is a disconnect between the monthly bill from the insurance company and the usage of the health care paid for by that insurance.

And the big problem is societal: people will be very unhappy if they end up with less medical care than they wish. They want to be the decision maker on what is and what isn't appropriate. They don't like doctors telling them that doing X or Y isn't necessary. They don't like insurance companies telling them that X or Y isn't covered and they're not going to be any less unhappy if they can't get X or Y treatment because they don't have the money to pay for it. And unhappy voters lead to politicians doing things that are politically wise but fiscally stupid, such as passing laws to provide coverage for care that cost more than one's ability (or willingness) to pay.