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My Thoughts on the American Health Care Problem

I have pretty strong beliefs about personal responsibility when it comes to health. As written, I don’t support Obamacare. It is program designed to make us more dependent on the government. When it comes to politics, I believe in less government, more personal freedom and responsibility, and that my money should be my money. I think most government and employer-provided health insurance should be eliminated and individuals should buy their own health insurance if they want it.

Stethoscope and piggy Bank by 401(K) 2013 from Flickr

Stethoscope and piggy Bank by 401(K) 2013 from Flickr

Here’s how health insurance works – when you buy an individual plan, the insurance company hopes that the amount they spend on your medical care will be less than what you pay into the plan. When you’re in a group plan (like through your employer) they hope the amount they spend on the group will be less than what the employers and employees pay into the plan. If you connect the dots, you’ll see that a group plan favors the sick and irresponsible because they pay less than what they’d pay for an individual plan and the insurance company can use the funds from the healthy people who don’t need much health care to offset the cost of paying for them.

I’m an entrepreneur. I pay for my own health insurance. I don’t want to pay for yours. Unfortunately, thanks to Obamacare, that’s exactly what I’ll be doing.

I’m a huge proponent of personal responsibility and taking responsibility for your actions. Since started to have employer and government-provided health insurance, I wonder if it’s led people to think that they can neglect their health because someone else will be picking up the tab. I wonder if people would change their habits if they had to directly endure the financial consequences for their bad health.

I think health insurance should be more like car insurance. If you always have to pay for it, you’ll budget for it in the present and the future. If we each had our own health insurance plans, we wouldn’t worry as much about losing our coverage if we lose our jobs or retire. If people planned for their financial future, maybe we wouldn’t need Medicare anymore. Additionally, health insurance companies would have to compete more for your business and might offer lower priced plans.

There is an argument that if everyone had to buy their own health insurance that the price would get so high that only a few could afford it. That could happen, but I suspect someone will find a way to offer a lower priced program and make more money by making less money per plan but selling more plans overall.

If health insurance was more like car insurance, your rate would be based on your habits and past behavior. This would encourage more people to be responsible for their health. If you want your car insurance rate to go down, you have to be a better driver. Likewise, if you want your health insurance rate to go down, you need to take better care of yourself.

I wonder if this country would have fewer health problems if we never had employer or government provided health insurance. The responsibility for one’s health would be on the person. If they wanted to be unhealthy – that’s their choice, but they’d also be responsible for the physical and financial consequences. And if a person chose not to get health insurance, that’s their prerogative. They can pay cash.

My idea comes with one exception: health benefits for the military. Our servicemen and women served our country and got many of their health problems from their service. We have an obligation to take care of them.

I know my idea has flaws. If we implemented my idea now there would be a significant portion of the population that couldn’t or wouldn’t get their own insurance and will use ERs for medical care. My plan also requires providing more education about maintaining your health – but if someone chooses not to apply the lessons to their life, that’s their problem.  The most we could hope for is some people will see people not make changes and make the personal choice to not repeat their mistakes.

I know I’m in the minority on this issue and it’s ok if you disagree with me. Feel free to share your views as a comment.

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  1. First Obama-Care does not make us more dependent on the health care system. I have written about Obama-Care before and that link is found here:

    Health care is more than personal responsibility- by far. The vast majority of diseases and the morbidity from them is not from personal responsibility. There are some things we can do: get vaccinated, drink from great water sources, and have food that is not contaminated with bugs or noxious chemicals. All of those things, which have had the largest impact on the health and lifespan of human beings have been fostered by “big government” and are dependent upon them. Much like we are dependent on big government to regulate the pollution in our air and water (which has also increased lifespan).

    We have gone from a country that has 2/3 of people smoking to one of 1/3 of people smoking, and while we have seen a reduction in lung cancer, and some vascular disease, we have not seen a commensurate increase in lifespan.

    There is no great “preventive medicine” other than the ones above, and while I spend my life taking care of obesity – one cannot state that the majority of obesity has to do with personal responsibility – because that has simply never been proven.
    One of my good friends who died of brain cancer at age 46 lived an exemplary life: an athlete, great shape, made a fortune in business – and developed brain cancer. Ran through his lifetime limit for insurance (2 million cap) and thankfully was 1/4 Native American so had his care from the Alaska Native Medical Center. Obama-care ended the life-time caps on medical expenses.

    Diseases of the heart, cancer, and most strokes are not diseases that have something to do with lifestyle- they are the genetics.

    Simply put, we can control a bit of our destiny, but not much.

    In the United States we pay twice as much for health-care as anyone else in the western world. Yet we don’t cover everyone. We also don’t have the longest lifespan, the best cardiac care, the best cancer care, the lowest infant mortality, or the best maternal care. The free-market has been a failure in health care.

    Education is not the problem with health care- as a rule. And what you neglect to mention is that the price of health is borne by the person. How it is paid for is accounting. The consequences of our health are our own. The most efficient way to pay for them is not “preventive” – it is with a single payer. That system has been proven.

    1. Ruth Carter says:

      Thanks for sharing your views Terry. I was hoping to get a perspective from an insider. I’ve wrestled with the idea that if a single payer system is what we have, what should we do about genetic problems that someone can’t control with health behaviors. On the flip side, I see people making horrible decisions regarding their health on a seemingly daily basis which is causing them health problems and the most rational answer to the problem to me is encouraging change by making people be personally responsible for the consequences.

  2. They are the ultimate ones responsible for the consequences of their behavior. Imagine someone who doesn’t wear a seatbelt and becomes injured – insurance only pays the bill, it doesn’t pay for what they suffer.
    But the vast majority of what is paid for in terms of health is not a consequence of behaviors – it is a roll of the dice. We would like to make it simple: but it isn’t.
    Even if you get vaccinated against the flu, you can still get it- and be hospitalized and get pneumonia and be on a vent. Even if you eat properly and run (ala Jim Fix) you could have horrible heart disease and die (he died in ditch while running).
    Health insurance just pays the cost of the care, but the individual always pays the cost of their health.

  3. Although – a more effective way is an excise tax on things: this is what is done with tobacco. There is an excise tax, so people pay more for cigarettes and the money goes to health, education, and tobacco cessation projects.
    One could place an excise tax on junk foods- so the consumer of the product is paying for it. It may be more “big government” but it is a more direct way to “pay” for the use of products that are less than healthy

    1. Ruth Carter says:

      Hmm…an excise tax on junk food would be interesting. I’m also on board with you that food stamps should be able to be used to buy junk food.

  4. Wes Winham says:

    I’m curious as to why you recognize the harm done by health insurance tied to employment and your employer in the general case, but don’t extend that same logic to the military. What makes incentive-skewing, heterogeneous preferences, and competitive forces less important when the client is or once was a member of the military?

    It seems you have a slightly-emotional bias in favor of folks who have or are serving, which is fine, but isn’t that all the more reason to prefer they not be tied to a single-provider, one-size-fits-all plan and instead have choices? As an example, if I served and was not injured, wouldn’t I much rather have more cash compensation than medical care that I will under-utilize?

    I’m also interested in your thoughts on universal catastrophic coverage. I prefer this combined with elimination of the employer health insurance tax exemption and efforts to alter regulation in order to encourage more insurance competition. I see this as the only politically-feasible path that does not break the price system that is necessary for continued health innovation (the absolute most important factor in determining future health outcomes).

    Folks like Terry are not wrong in pointing out the injustice in genetic and other conditions that do not affect everyone equally. Something like 60% of total healthcare expense occurs in the last year of life, after-all, and we haven’t figured out how to reliably prevent cancer with lifestyle changes. It just doesn’t seem to be politically feasible to point out that genetic inequality is the norm in basically all aspects of life and that health is no different.

    I’m interested in a system that allows people to feel like they’re helping people without actually blunting the innovation that will actually do the most to help humanity. Effectively, how can we satisfy our short-term social empathy/guilt without causing harm to future people (and ourselves) by discouraging the creation of effective treatments that would have existed with a market in healthcare business models, treatments and technology.

    By far, the most important aspect of a healthcare regulatory/legal regime is it’s affect on the rate of innovation and yet most analysis by non-economists ignores this factor completely.

    1. Ruth Carter says:

      Thanks for your thoughts Wes. I’m for the government taking care of our service members. If there’s a better way to do it than our current system, I’m open to it.

      Universal catastrophic coverage? That might be a way to address the problem – of course it always come down to the details. I prefer a system that focuses on people staying healthy more than waiting until it’s an emergency to address a problem.

      1. Wes Winham says:

        I don’t see a reason that government (taxpayers) should be in the business of picking and choosing who gets special healthcare rules based on their chosen profession. When we play the game of which socially high-status groups get those special rules (service members, in this case), despite any good intentions, we ensure that benefits will accrue to whichever special interest is best-able to influence the political process. In general, that will mean well-organized groups like corporations, labor unions and the well-connected actual get the benefits, despite the stated or real intent of legislators. Service members are not a particularly well-organized lobby.

        You’re absolutely right that it all comes down to the details, though. That’s why I strongly recommend folks consider the number of details inherent in any plan. The more complexity and details and the more difficult is to explain to your well-meaning but half-interested co-worker, the more likely the details will be gamed in favor of special interests and not the broad public.

        As far as focusing on people staying healthy, that’s certainly a noble goal, but the evidence is very clear that healthy people spend *more* on healthcare. Basically, the longer you live, and especially the longer you live at advanced age, the more your total healthcare costs. The best thing a person can do for their lifetime healthcare cost is to die young of the diseases we know how to prevent with lifestyle changes (heart disease, lung cancer, diabetes etc).

        Some references to that affect:
        * The Lifetime Distribution of Health Care Costs
        * Alcohol, Obesity and Smoking Do Not Cost Health Care Systems Money

        Based on currently-available information, I see no hope for reducing costs by increasing health. It’s actually counter-productive.

        To me, the measurement of a healthcare regulatory/legal regime is not cost, but medical outcomes (which are dominated by technology improvements) and by individual choice. It’s a perverse game to judge a system by cost or surface things like patient satisfaction, but that’s what our previous system brought. The ACA only accelerates those trends.

        Few would want to live in a world where food ownership was controlled federally and we debated over how to ration food in order to properly optimize everyone’s nutrition, but somehow well-meaning folks see health insurance differently. The only substantive difference is that healthcare costs are not predictable and evenly-distributed like food costs. That’s why I’d prefer the simplest-possible universal catastrophic coverage system to eliminate that difference and make it clear that economics and incentives apply equally to ribeye steaks, hydroponic vegetables, annual physicals and cardiac bypass surgery.

        1. Ruth Carter says:

          Thanks Wes. Everyone’s comments today show how complicated this problem is. The solution will not be easy.