THE HEALTH CARE ISSUE ENCAPSULATED

3/8/10

Once upon a time, people didn’t have health insurance, or at least health insurance policies were purchased by a relative handful of people. People went to the doctor and paid him (It was almost always “him” in those days.) out of their own pockets. It was expensive, to be sure, but not outrageous. Further, back in those days, people engaged in an activity that has somehow been lost in the shadows of time—saving. People thought it necessary to save for a rainy day, rather than to have someone else bear the financial consequences when things didn’t go as planned, and one of those rainy days was a visit to the doctor or even a visit to the hospital. So health costs were reasonable, certainly by today’s standards, and people prepared for those costs by saving, so going to the doctor, or even to the hospital, was not a financially debilitating event.

All this began to change with World War II. Companies, hungry for labor as they strove to meet the demands of a country at war with a large chunk of its work force deployed, couldn’t attract new workers with higher wages due to wage and price controls. Effective managers (another quaint old notion seemingly lost in the fog of time) decided that they could get around the strictures of wage and price controls by offering a largely unknown benefit known as “health insurance” to existing and potential workers. “Heath insurance” would cover hospital stays and, in some cases, doctor visits, giving workers a nice perk and one less thing to worry about…or save for.

Health insurance had the predictable effect: As the user of the service (the patient) was divorced from the payer for that service (the insurance company), incentives to save and to shop wisely for health care deteriorated; the market was thus not allowed to work its usual magic on health care. After the war ended and health insurance came to be an expected part of most pay packages, this effect was amplified to the point at which a market, in any real sense of the term, no longer existed. Prices predictably skyrocketed.

Things eventually “progressed” to the point at which only a few could actually afford health care in the sense that they could pay for their doctor visits, in office procedures, and hospital stays out of pocket. Most everyone who could afford it and had access to it bought health insurance. As group plans became richer, health “insurance” metamorphosized into prepaid health care. Once health insurance was designed to protect people from financial catastrophe; at some point it came to cover even the most minute health expenditure—routine checkups, even the cheapest prescriptions, massage therapy, eye exams, eyeglasses, etc. The impact on the prices of anything medically related was predictable, and those without insurance, or those with insurance in the former sense of insurance against financial catastrophe rather than a prepaid health plan, could no longer afford even what was once considered basic health care.

Now we’ve gone a step further. Because of the ubiquitousness of insurance, the cost of health care has reached breathtaking levels. And, as the night follows the day, the cost of the “insurance” used to pay for health care has done a similar moon shot. So while once we reached the point at which the average person could not afford to pay for health care out of his or her own pocket, making health insurance necessary, now we’ve gotten to the point, largely because of “insurance,” that the average person, or average business, can no longer afford health insurance, thus making nationalization of health care perhaps not necessary but almost surely inevitable.

One more thing…

Doubtless one of the reasons (but not the primary reason, which remains the separation of payer from patient and thus the negation of the marketplace) that the cost of health care has gone up is the advance of medical technology. We’ve gotten pretty close to the point at which we can heal a growing number of previously fatal diseases and keep people alive a lot longer than we could in the past. One can envision a future when prolongation of “life” will know no technological limit. But we are beyond the point at which society is willing, or can afford, to pay for all that medical technology can provide. If we are truly serious about limiting health care costs, one of the ways of doing so will have to be to limit the advance of health care technology. Nationalization of health care, and its attendant rationing, will be one way society says, without really saying it, that we don’t wish to, or choose not to, pay to endlessly prolong life and to heal every disease. Whether such an approach is ethical or desirable is another issue. The point is that we can’t afford to keep everyone alive forever or to stop everyone from dying, or that we have decided that there are more pressing economic needs than the prolongation of life. Nationalization of health care, made inevitable by the advance of “health insurance” and the preemption of the market for health care that is a natural consequence of such insurance, is one of society’s ways of saying, without really saying it, that we have made the decision that some things are more important than exploring the limits of medical science.