Monday, December 28, 2009

Libertarian Solutions for Health Care

The Libertarian Party issued a press release entitled "How Liberty Makes Healthcare Virtually Universal". By themselves, the 5 ideas are interesting, but I have some concerns, especially since there are no studies or other data to back up any of the claims. I will present the 5 arguments and my thoughts about each.

1. Allowing individuals, as well as businesses, full tax credits/deductions for medical insurance and/or medical expenditures. In the interim, encourage the use of HSAs by increasing the amount of tax-deductible contributions (currently $3000) that a person can make each year.

Yes, I am aware of how insurance has masked the true cost of healthcare, thus driving up the costs. There are many studies to show how this has happened. Yet, the Health Savings Account (HSA) is not a pancea since you cannot get enough people to adopt them to make a dint in prices. HSAs only work currently if you never go to the doctor for anything. If you have a chronic condition, you are SOL.

The current tax code does allow you to deduct your medical expenses, so long as those expenses are more than 7.5% of your income (it could be point is not the actual number but that such a deductibility currently exists). Perhaps it's that 7.5% threshold that Libertarians are objecting to. I admit that I don't know if businesses are able to deduct 100% of their health costs from their tax liability. If that's the case, then I would support individuals doing the same.

I also love my Health FSA (Flexible Spending Account), which is like an HSA, except I use pre-tax dollars to pay for health-related items, including all co-pays. The downside is that in a FSA, unlike the HSA, at the end of the year, you lose any money you haven't spent.

I don't see how this proposal will reduce costs OR increase coverage. I understand the economic theory behind it, but I don't see how it works in real life.

2. Ending insurance mandates that states impose. As an interim measure, allow insurance sales across state lines so that consumers can choose the insurance plan that best fits their needs, rather than be limited to what state legislatures allow.

The idea that selling insurance across state lines would somehow be a panacea to the cost of insurance is attractive on its face. What I don't understand is how you prevent the insurance companies from simply raising the rates to cover the cost of the most expensive areas of the country. If selling a NY resident AL insurance is a money loser, then how do you stop the insurer from simply raising the price of AL insurance? Wouldn't truly national policies price themselves up to the most expensive market and therefore create an increase in the uninsured?

This brings up the idea of the nature of health care. It is not a commodity like clothing, tires, or any other widgit you could name. People generally do not DIE because they can't afford a certain car or brand of clothing. Health care, however, touches at our ability to survive, our right to life, if you will. If there is not some basic standard of health care, then you doom the poor to a shorter life by denying them treatment of diseases or conditions that could extend their lives. You are saying only the wealthy truly deserve to have good health care. Only the wealthy have lives "worth" saving. The very life of a rich man is worth more than the life of a poor man. The poor are disposable, and the rich are not. That is the underlying message of those who say health care is nothing more than a commodity like clothing. One reform I'd love to see is requirement that all health care entities be non-profit. They still have to survive, but their goal should be to provide quality health care to customers, not to get rich. The current bills touch on this idea with the requirement that a certain percentage of premiums MUST be spent on health care.

It's also useful to look at why states created mandates in the first place. Mostly, it was because of blatant discrimination against certain groups. I especially think of women, whose needs were certainly NOT covered. Women couldn't get basic preventative measures like mammograms or pap smears covered. That is what drove people to the legislature to REQUIRE such coverage. The insurers wouldn't do the right thing until they were forced. Again, the result of repealing all state mandates would be to say that only the wealthy should be able to get certain services covered. In the realm of a person's health, that seems wrong.

3. Making doctors and their insurers liable only for actual negligence and malpractice. In the interim, caps on non-economic damages, such as those in California and Texas, lower insurance costs, but may prevent victims of actual malpractice from being appropriately compensated.

Over 30 states have caps on liability in medical malpractice, but the cost of malpractice insurance keeps going up. Why is that? Making physicians liable for actual negligence is not a bad compromise with the usual plan to basically ban all medical malpratice suits through a standard of GROSS negligence. If I actually believed that conservatives gave two shits about peoples' health care, I'd strongly support including malpractice reform like this to gain their support for other, more liberal measures. However, in the end, conservatives have shown they'd tell us to "fuck off" in the end while they filibuster.

4. Ending the regulation of medical professionals and employing a system of voluntary certification instead. Studies show that certification increases the amount of quality care delivered, especially to the poor. Since practitioners are usually certified on the basis of competence, rather than on politically-correct regulations, their number and quality increases, while prices decrease.

I'm not sure where this proposal is coming from. I am guessing they'd like to take away the authority of the state of license medical professionals period. "Voluntary" certification is a joke. How do you stop any tom-dick-or-harry from saying they are an MD? The "market" won't catch these fools until it's too late, and people are already dead or maimed. There's safety issues here. Unless you require certification, how can you ensure any kind of quality? And if you require certifcation for insurance coverage, etc, how is that different than the system we have now? I am not aware of any "politically correct" regulations in the licensing of doctors. I'd like to have those pointed out if they exist. I know for a fact that neither Virginia nor Georgia has any "politically correct" regulations when it comes to the licensing of lawyers. You don't get any bonus points on your bar exam for being a minority. I'm confused by this proposal.

5. Ending FDA regulation of pharmaceuticals and employing a system of third-party certification instead. The FDA doesn’t test any drugs, but simply looks over the data provided by manufacturers. Underwriters’ Laboratory (UL), which certifies electrical appliances, actually tests the products that bear its “Seal of Approval.” Such third-party testing is an excellent model for drug certification.

Oh yes, let's turn the clock back to the late 1800s when there was no FDA, and any charlatan could roll into town with his concocation of the day and make whatever claims he/she wanted in order to sell to an unsuspecting public. I do not think we should set the standard as "claim what you want until someone can prove it's false". Not for pharmaceuticals or for supplements (which is what the regime that supplements currently fall under). I am not opposed to setting up an independent entity like UL that would do independent testing and certification of safety and claims. Such an entity could be set up by fees paid by drug companies who develop these drugs. Somehow, I don't think that's what the libertarians have in mind. They seem to want no penalty at all for companies that put drugs on the market that don't have certification that it actually works. They think the "market" will take care of that. Again, the market probably would, but not until people die.