Mitt Romney: No Apology: Chapter Seven: Healing Health Care. (The Anecdotal Argument.)
THE MASSACHUSETTS PLAN
Romney explains his successful plan for health care in Massachusetts when he was Governor. This plan was successful in inducing 97% of the population to join through tax incentives and penalties on both employers and employees and individuals who were unemployed. Seniors of course were already insured through Medicare. The poor already got healthcare through federal- state funded Medicaid.
By redirecting federal funds for Medicaid, inducing healthy uninsured people to buy health insurance (thus enlarging the insurance pool with better risks) and by a state subsidy for the very poor to help them to buy coverage according to their means, and by tax incentives on employers and employees the state was able to achieve nearly universal coverage at a cost of approximately $350 million to the taxpayer or about 1% of the budget. Federal Medicaid funds made this possible also so the cost to the taxpayer is really not as dramatic as he would have us believe.
The Massachusetts plan does not control the rising cost of health care in Massachusetts nor does it address the cost of catastrophic health care and who should pay. It did create a plan that was affordable to at least 97% of the population. (The Tea Partiers criticize him on this because of the tax aspects. However Romney should be commended for devising a plan that provided basic health care to the vast majority of his constituents.) Also the plan is recent so the jury is still out. If costs are not contained premiums will rise and people may opt out preferring to pay the tax penalty rather than the penalty. Also the tax penalties for not participating my be unconstutional.
FEDERAL HEALTH CARE
Romney states the Federal plan just enacted, Medicare and Medicaid will not work and are on the way to bankrupting the taxpayer and the Federal Government. The reason for this is that the incentives are all on the wrong people. Doctors are paid for the number of procedures performed. Patients have no incentive to control unnecessary tests and procedures because they are not paying for them. Also doctors are not paid for the quality of their work. Therefore the plans cited above are structurally deficient because they are not market orientated in rewarding and incentivizing health care for the best care at the most reasonable cost.
He gives numerous examples of various Health Care plans already in place in communities around the country that do work at reasonable cost. These include HMO’s like Kaiser (Kaisers premium costs are comparable to private insurance costs for the same coverage) and groups like the Mayo Clinic of Minnesota and Arizona. Also he fails to note many HMO’s are owned by insurance companies and are run for profit not cutting premium costs.
He cites and compares McAllen, Texas as one of the expensive places for medical care and gives an example of the number of tests given for one complaint (One time transitory chest pain in a woman with no prior history of heart problems.) where only one test would be given fifty years ago six would be given now.
He compares the single payer systems in Europe and Canada and finds that their statistics on satisfaction and costs are skewed. One example is infant mortalities. In many countries, including single payer ones, efforts to save high risk deliveries are not made and the statistics of babies born dead or who die in a few hours are not included in infant mortality rates. However in this country, with highly skilled doctors and nurses along with well equipped facilities, where extraordinary measures are taken, many infants survive but many die in a few days or weeks. As a result these high risk infants who die are entered in to our infant mortality rates thus making it look higher than some single payer countries or even third world countries. Another is the wait time for colonoscopies in England. 60 days according to his anecdotal account of his son’s experience. (This is not a valid comparison for many reasons including the age of his son. I doubt if any Englishmen die while waiting for a necessary test to be performed timely.)
Health Savings Accounts
Health Savings Accounts is another method Romney mentions where individuals are given a credit against Medicare taxes and place it in a savings account to pay routine medical expenses. They would back this up with a low cost catastrophic policy. (This is pie in the sky; while some people are disciplined enough to do this a Federal Plan covers all people from all walks of life. Many who live from paycheck to paycheck or borrow against the next paycheck at high rates of interest would raid these accounts to meet perceived necessities. Then of course there are those who live on food stamps and welfare and only see a doctor in an emergency room, how would they be provided for, subsidized accounts? A plan for disaster if there ever was one.
Would your friendly broker or financial consultant get into the act by alleging that he or she could increase the returns on these HSA’s. In a free and unregulated private market the sophisticated would soon make mince meat of the unsophisticated.)
MARKET DRIVEN APPROACH
Thus Romney believes that a market driven system of health care would out perform a single payer system or that the systems we have in place now will eventually bankrupt the country or cause severe political unrest. Romney is right about uncontrolled medical costs but even private insurance plans have never controlled costs and have no incentive to do so when their profits (usually 20%) increase with premiums charged. Also the private market is able to cherry pick insureds leaving the worst to self insure or to welfare. Also private insurance companies frequently find ways to avoid obligations by creating or finding reasons to rescind policies when an insured faces a serious loss.
Therefore a market driven private system has already proven itself to be inadequate at providing satisfactory coverage and claims procedures at reasonable rates for everyone.
(The plan to cover everyone through has some advantages. First the risk pool is greater so the advantages of insurance are better utilized (everyone pays for some part of a major loss. Thus spreading the risk. Everyone is paying except those that don’t pay taxes. We would no longer need state insurance commissioners at least for health insurance and that would take politics out of the equation at least at the state level. With electronic reporting more complete data comparison could be made for procedures and costs. Thus limiting opportunities for unnecessary procedures, overcharging and fraud. It will lessen the need for legions of lobbyists corrupting the political system. The Federal government has the US. Attorney’s office to prosecute egregious defalcations. This would put some downward pressure on unnecessary procedures and costs but it doesn’t create the incentive driven controls necessary to make the system work.
This aspect remains the central problem of all systems public and private and must be addressed. Romney says the solution is a single visit payment instead of a payment for each and every procedure. This seems inadequate as it would encourage medical providers to schedule more visits. (Instead of fifteen minutes you would get five, but more often.)
Lastly malpractice is not a cause of the cost spiral it is the profit motive of the medical profession and the lack of involvement in paying for the procedures by the patient that is the cause. Without malpractice remedies many egregious procedures would take place like the practice of administering hysterectomies to young women with good insurance. Further it has been shown many times over that most professions are reluctant to police their own members. If malpractice suits were taken out of the equation costs would likely go up as it would embolden the profit driven to do ever more risky procedures with disastrous results for the patient and subsequent costs.)