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The Federal Reserve is an example of an argument between two viewpoints, better left unresolved than settled in favor of either extreme. In that particular 1913 case, it was a question whether the national currency should be a totally government function or a totally private one, and we finally settled on a hybrid institution. It searches for the merits of both viewpoints, continuously and permanently. Healthcare seems another example of a vital function best managed by continuous tension, not by anybody's victory. Look at the question of the uninsured, which quite naturally many insurance companies describe as a disgrace. It was however soon discovered that many people didn't want health insurance enough to pay for it. In the background, a small group of insurance actuaries began to mutter that it gets to be a problem if no one is left uninsured, since insurance depends on market prices to establish their premiums. Insurance was never designed to set prices, it was designed to pay them.
Furthermore, there is that thing called Moral Hazard. There are reasons to believe medical cost are already 30% too high, just because nobody spends his own money as freely as somebody else's money. A large pool of uninsured medical transactions establishes a standard that invisibly constrains people with insurance from spending recklessly. Remove that, and spending volume will increase, followed by prices.
And finally, if everybody could buy insurance at the same price no matter when they bought it ("Community Rating"), you would find that people will hold back until they are in the ambulance before they sign an application. It's like buying fire insurance when the building is already burning. Healthy people won't buy it, so again the price has to go up.
For these reasons-- prices, volume of service, and Moral Hazard -- universal health insurance at Community rates is a bad idea. Because no one likes to be pushed around, compulsory universal health insurance is an even worse political idea. The Republicans convinced themselves it was such a bad idea, that they could just let the Liberals go ahead with getting badly punished when the public came to its senses. It is not the function of this book to explore why things didn't work out their way, or didn't work out that way, soon enough. We did have a problem, misleadingly called the uninsured problem, of thirty million people presenting themselves at hospitals without the money to pay. It wasn't their fault, it wasn't the fault of insurance, it was just a problem. Somehow, it was decided to go ahead with compulsory universal health insurance to solve it.
Obamacare began with a stirring call to help the forty million uninsured Americans obtain healthcare insurance, by subsidizing them if necessary. When an enormous proposal was finally laid out in detail, the Congressional Budget Office estimated that after spending a trillion dollars, thirty million people would still remain uninsured. In rough figures, there would be: eight million in jail, another eight million too mentally impaired to support themselves, and twelve million illegal aliens.
If I had been faced with this problem, and given a trillion dollars to deal with it in ten years, there is no doubt I would have deep-sixed the insurance proposal, and proposed three programs, a program for Prison Inmates, a program for the Mentally Impaired, and a medical program for Illegal Immigrants. After that, I would have turned my attention to a devastating stock market crash, several wars, and the struggling inner-city school systems. If I handled all that, there wouldn't have been time for much else, so I would probably have left everything else to my successor in office.
But unfortunately that isn't the way things turned out, so I devoted my retirement years to health care reform, real health care reform, instead of to improving my golf handicap. Most of what I have to say is drawn from sixty years of practicing Medicine, in eleven hospitals, in three neighboring states as a consultant, and thirty years in AMA medical economics activity. I am still more or less on the faculty of two medical schools, and have been elected to my share of positions of honor in the profession. In 1980, I wrote a book called The Hospital That Ate Chicago , was invited to White House functions, and together with John McClaughry, devised the concept of Health Savings Accounts.
As to this book itself, it was very hard work for almost a year. I apologize to Leopold von Ranke, the father of historical documentation, for not living up to his standards. But it has been too much of a scramble to keep up with breaking events in the Compulsory Health Insurance field to worry about that; there are undoubtedly some unintentional mistakes, no harm intended. I wish I could live long enough to look back on this perplexing episode with more balance, and write a sequel that would satisfy my critics. At my age, it probably isn't in the cards.
------------------------- No matter how it is accomplished, a program designed to solve these three problems would contain three different approaches, which have very little to do with each other. The other three hundred million citizens are right to be concerned about disrupting the program which addresses their needs fairly well, even though it is not denied that thirty million others fall through the cracks. The dominant healthcare system has many defects, but they remain mostly unaddressed. The thirty million do not have their problems addressed at all, because the sources of the deficiency are not primarily financial. It certainly seems we needed three programs to address three specific problems, and we needed a fourth searching examination of the program design for the remaining three hundred million. Because medical care is constantly changing, mostly for the better, single pieces of legislation are surely destined for obsolescence as soon as they are written. One big law, or even forty little laws, cannot possibly anticipate the discovery of a cure for cancer, or the appearance of new epidemic like HIV, capable of killing millions of people in every walk of life. We need an institution, not a political victory, or defeat. Nor do we need another century of legislative turmoil.
The components of this institution should include an appropriate voice for government with links to the oversight committees in Congress and the judiciary. It should include a voice for persons trained in the science of medical care, with links to organized medicine. And it should have the power to investigate the scientific and economic issues, utilizing the resources of the National Institutes of Health, the Food and Drug Administration. No doubt, other power centers will demand representation. At first, this organization should be given time to sort itself out, investigating and reporting, but leaving regulatory action to existing institutions until the new organization can persuade the nation it is ready for enforcement powers. Even then, it might be better to create new agencies with enforcement power, leaving a national medical advisory Institution whose power derives from its demonstrated ability to suggest the right approach. If it does not quickly acquire such prestige, it has been poorly designed.
Perhaps it should be left vague and sketchy. Why don't we begin with a Medical Constitutional Convention, allowing them to battle it out behind closed doors for a few months. And reminding them from the outset, that the 1787 Constitutional Convention achieved its best design features, after it had been returned to the people for ratification.