Health Costs: How to Bring Them Down? Free Market Forces or Human Values?

You've heard enough horror stories about the failures of our broken health care system and so have I. Everybody knows by now that we Americans pay more -- a lot more -- than everybody else in the world for health care while denying it to millions upon millions of our fellow citizens.

One glance at this graph of rising health care costs and anybody can see that such increases are unsustainable. If they keep rising this way, they will double to $4.1 trillion by 2016, consuming 20% of the nation's gross domestic product (GDP), according to a new federal study. By 2050, the study says the percentage will be 40% -- which will mean financial breakdown.

Over the same time, co-pays, what you and I pay over and above our premiums and deductibles, will also almost double from $850 this year to about $1,400.This will spell financial catastrophe for ordinary Americans, many of whom will exact payback by living increasingly longer lives.

Though I will be 112 in 2050, having contributed mightily to the health care financial breakdown along with a long-lived cohort of millions of others, I'll still be consuming health care resources at a ferocious rate. At least that is my selfish plan. Or should I and all the other super-oldsters just die to help keep the country from going broke?

I heard what you just said. Thanks, but no thanks. There has to be a better way.

Good news! President Bush has a plan!

The President recently sat down with health insurance executives in Houston to discuss his plan. It seeks to control health costs while expanding health coverage by revamping the tax code and shifting more responsibility for health decisions to individuals. The health insurance executives, knowing that the plan would be good for business by generating more premiums, were respectful.

A good time was had by all.

Next, in Chattanooga, Tenn., the President sat down with a carefully selected group of citizens without health insurance. In a chatty, Oprah Winfrey-style session, President Bush cracked jokes and held forth for nearly an hour as participants told of their problems in getting affordable health insurance.

To each, the President pitched his plan. It would provide low and moderate-income workers income tax breaks for buying health insurance while imposing tax increases on some workers covered by generous employer-sponsored plans. Single people would receive a $7500 tax deduction and families a deduction of $15,000.

The tax breaks would empower individuals and families to go out into the marketplace and choose the health insurance plan that works best for them, the President said. "If you want a health care system that really works, you want the decision-maker to be the individual, in consultation with somebody who knows what they're talking about," the President said. "That'd be your doctor."

A good time was had by all.

Meanwhile, members of the Bush Administration like Health and Human Services Secretary Mike Leavitt were out selling the tax-deduction plan. "America's per capita health spending is the highest in the world," he said. "There is simply no place on the economic leader board for a nation that spends a fifth of its domestic product on health care. The only force strong enough to change the course of health care is a marketplace where consumers have the information and the incentive to choose quality and keep costs low."

The plan was generally pronounced dead on arrival. Rep. Pete Stark (D-Calif.), chairman of the House subcommittee overseeing health policy, called it a "farcical move." In the U.S, Senate, Sen. Edward Kennedy, chairman of the senate committee on health affairs, said the plan would encourage employers to phase out health benefits and eventually kill employer-based health benefits.

Stephen Colbert of Comedy Central made uproarious fun of President Bush's plan: "It's so simple. Most people who can't afford health insurance also are too poor to owe taxes. But if you give them a deduction from the taxes they don't owe, they can use the money they're not getting back from what they haven't given to to buy the health care they can't afford."

When a presidential health plan that is supposed to be taken seriously gets laughs, we know things are as bad as we think. It means our broken health care system stays broken and rising health costs continue pushing us all to financial and health delivery breakdown. It means the horror stories will continue and get worse.

In Los Angeles, according to several witnesses, a hospital van recently dropped off a paraplegic man on a Skid Row street. The driver, a women, got back in the van, looked in the rearview mirror to check her make-up, and sped off. The patient was found crawling on the sidewalk dragging a bag of belongings with his teeth.

Sorry, I know you're tired of such horror stories, as I am, but this one struck me as especially disturbing. A hospital that is supposed to deliver health care just gives up and dumps a helpless human being on a slum sidewalk. It is an official act of a desperate health care system, casual and cruel.

Is is prescient? Or is it just the sort of thing that could galvanize us as a society to do some straight thinking on health care? On its face, President Bush's "plan" is one more rejiggering of a failed health care system that will accomplish nothing. It is straight out of an ideological playbook which says that the free market is the answer to everything.

It is the engine that drives the economy and that has made the United States an industrial powerhouse. No doubt about it, the free enterprise system works -- for the economy. The health care system is something we do as a society and that is something altogether different from our economy.

A society is a community based on human values such as our basic American rights to life, liberty, human dignity, and equality under the law. Its lifeblood is who we are as human beings. An economy is not a community at all but an association organized to produce necessary goods and services and to allocate resources. Its lifeblood is money.

The Bush plan assumes that our health care system is an extension of our economy when it actually is, or should be, a reflection of the values we hold as a society. Correct me if I'm wrong, but I think that a hospital dumping a patient on a slum sidewalk violates our values as a people.

The Bush plan is also a violation of deeply held social values because, at its core, it says that health care should go to those who can afford to buy it on the open market. For those who can't pay, tough. Presumably, following this logic, as consumers with money shop for the best private health plans, we can expect to have a future of mass dumping of moneyless patients on city sidewalks.

Or we could begin to create a health care system that reflects not our economic values but our human values. Having tried a hopelessly complicated system with huge administrative costs from denying care and fighting over who pays the bill, we might have a go at something simpler, something honest, and something -- believe it or not -- cheaper.

The Bush Administration is hailing the new Medicare prescription drug benefit, Part D, as a success. Except for the very poor using many prescriptions, the new program is a landmark failure. It primarily serves the big drug companies who literally wrote the bill and made sure that the government, by law, could not negotiate for lower prescription drug prices.

In theory, competition and free market forces were supposed to enable Medicare Part D to provide prescription drugs to more people at lower prices. In practice, in order to get private health insurance companies to compete for Medicare business, the government had to pay them billions in tax dollars. This money was paid up front. So much for the free market.

The Bush Administration spin machine is saying that the competing private companies have driven down monthly premiums for prescription drug coverage to lower than expected prices. The prices are merely down from inflated estimates, a standard tactic of the Bush Administration.

What is really happening is that a few large companies are gobbling up market share with artificially lower prices that smaller companies can't compete against. In a year or two when a few giants such as United Health and Humana have stamped out smaller rivals and achieved near monopoly market control, they will raise prices with a vengeance. So much for competition.

Medicare Part D is really a major first step in an effort to privatize Medicare. If the Bush Administration's intent were to offer Medicare beneficiaries prescription drug coverage at affordable prices, all it had to do was add it to traditional Medicare. All those billions in upfront subsidies and administrative and marketing costs would have been saved.

This simple solution would have saved seniors from gaining "more choice" and having to sift through multiple plans every single year. It would have saved seniors from plans changing formularies and prices at will every year. It would have saved seniors from plans, any time they feel like it, dropping drugs that they must have.

Well, this senior has not signed up for Medicare Part D and will not.

And now I'm going to end by saying three words that have been dirty words in American politics for 13 years, but are now being uttered by national politicians: universal health care. That's the subject of the next post.

So long and keep moving.