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Tuesday, September 29, 2009

Health Care - Act Now or Suffer

There are a lot of proposals going around for what to do about health care. Most of them, especially the ones that are likely to actually happen, will lead to very bad outcomes which nobody will be happy with.

Really, I can't overstate the importance of this. You think what we have now is bad, what we are likely to have in a few years will be intolerable. We will go from expensive health care to expensive, inadequate health care. That will really suck.

The best single article I have seen on the topic, which elucidates not just the predicament but the history and mechanisms that got us here is the poorly named How American Health Care Killed My Father. If you have not read it, do. Even if you're already in the choir, it may connect an extra link or two. Most importantly, re-post it, or a link to this entry, especially in venues that may push it outside of the chapel and into the streets. When you hear someone extolling the virtues of Obamacare or anything similar, take on the challenge, because they are not merely expressing opinion, they are working (unwittingly, of course) to fuck up your future. And by default, they will win.

Some key points about our current system, and a proposed solution (my own, but mostly in agreement with the above article):

The single largest problem is that tax incentives encourage employers to pay employees in part with low-deductible health "insurance" (which at these levels is not really insurance at all, but managed communal pooling of a common expense). This in turn makes health care consumers indifferent to cost, which in turn leads to all sorts of distortions pretty much painting a tour of most of the problems with our current health care system. (Imagine if everybody had "food insurance" for buying groceries, and think of how that would evolve over time. It's not a pretty picture, and yet that's exactly what we've done for health care. And sadly, the current push is to move further in this direction.)

The bulk of the problem really is that simple. Our health care industry has no immune system. Restore that, and it will heal itself. Don't, and we will never keep up with the problems by attacking them directly, because they are just symptoms, not causes.

Toward that end, we should:

• Remove tax incentives for employer-provided health insurance.
• Make health insurance premiums deductible by individuals.
• Make HSAs (Health Savings Accounts) available to all.
• Prohibit health insurance plans with deductibles lower than their premiums.

Together as a set, these have roughly zero net effect on individuals' disposable income, or on tax revenues. But they completely revamp the feedback structure of the health care system. Technically, only the first is vital to repairing the system, but the second neutralizes the effect on individual incomes (to make the transition painless), the third puts out-of-pocket expenses on the same tax footing as insurance premiums (which prevents the second from re-creating the problem we solved with the first), and the fourth accelerates the return to equilibrium which could take quite a while otherwise given how entrenched we are in the current system.

A more comprehensive plan would work at cutting back on regulations of both health care and health insurance, which presently are stifling innovation, preventing inter-state insurance, and more. But if we had to take small steps, the above four-point plan is, imo, the place to start.

If you like it, link it.

If you want to stop the current train wreck, Ron Paul and John Tate are championing your cause here, but I don't know how effective they are likely to be... If you know of a better venue to focus our actions and contributions, let me know and I will add it here.

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