Is a universal or subsidized healthcare system just?

We Americans hear endless criticism of our healthcare delivery system, from within the country and without. I agree with some of it. It is: inefficient, expensive, hard to access for the poor and rural, and prescription drugs are outrageously priced…for our citizens. While I want to share a personal perspective, I cannot ignore that last criticism. Of the reasons for the high prices, the top five are: 1. The U.S. government doesn’t regulate prices like other governments do; 2. Our patent protection lasts longer than in other countries; 3. Limited competition due to fewer generics, mainly because of long backlogs for approval of generics (and many companies have stopped making generic drugs that became unprofitable); 4. Rising cost of research and development, much of which is attributable to the rigorous process of FDA approval; 5. Drugs that have a very small demand, for rare conditions, can cost as much to develop initially as popular drugs. Do you notice a pattern? Most of the cost issues are due to government factors, but take a closer look at #2, #3 and #4. We provide longer patents, we have long backlogs for approving generics, and it costs more to develop meds here. Therefore, pharmaceutical companies here have a harder time recovering research and development costs than in other countries, yet American companies still develop the most drugs. A study in the American Journal of Public Health stated that the 43.7% of new molecular entities (NME), that’s brand new drugs, between 1992 and 2004 were developed in the United States; the next most were in Britain, which developed about 10%. The bottom line is that we, citizens of the United States, help subsidize the cost of new medications for the rest of the world!

Undoubtedly, government subsidized and controlled healthcare–Medicare and Medicaid here, universal healthcare like in Canada and Western Europe, Australia, Japan–are a really good deal for those who qualify. However, we are talking about justice, so rather than brag about how nice it is to have your healthcare paid for (with other people’s money, which is the part you don’t brag about) let’s consider who is expected, involuntarily, to pay. In countries with socialized (governmental) universal healthcare, the payment mechanisms are: 1. High taxation; 2. Rationing of services; 3. Controlled salaries of professionals; 4. Controlled or monopoly-power negotiated pricing of drugs, and presumably medical devices as well; 5. Restricted access to alternative treatments and other systems. I put the last one in italics, because it is particularly unjust and ugly. Let’s take the UK’s National Health Service, NHS, as an example. They have written guidelines for seeking treatment outside of their jurisdiction but within the European Economic Area, EEA. However, if you want to go to the U.S., where most treatment alternatives exist, those written guidelines don’t apply, rather every case has to be submitted to a local Clinical Commissioning Group, CCG. We saw what happened a few months ago when the parents of a baby who might have been saved by a treatment available only in the United States, and who raised the money to pay for it, were denied the right to try to save their child’s life by their CCG because “it wouldn’t have worked.” How do they know? What’s it to them anyway? If the baby had been saved, wouldn’t that be bad PR for the NHS? Call me cynical, but allow me to decide. How did they prevent the parents from taking him to the States? They restrained the parents from being alone with him and refused discharge from the hospital, thus consigning him to death. Sounds a lot like involuntary assisted suicide, a polite way to say passive murder.

Back to our central theme of justice. Healthcare payment systems that are unjust (I will summarize at the end how I define “just”) have the following: 1. People are getting their benefits paid for by mechanisms that sever prices from the cost of delivery and development. But someone has to pay the true cost of developing drugs and devices, treatments, salaries, etc. That means plenty of someones have to pay WAY more for their benefits. 2. Controlled salaries force professional compensation downward without allowing physicians to market their services freely. This is one reason for the rise in “concierge medicine”, both here and in Europe. 3. While the healthier population subsidizing the unhealthier and the younger subsidizing the older is nothing new nor inherently unjust–after all, healthy and young are temporary blessings–it becomes unjust when no one has a choice how much they are willing to pay to subsidize someone else. When everyone is being taxed to provide healthcare in addition to all the other things government uses money for, no one has a clue how much they are paying to subsidize the health of others, nor does anyone know how much it is costing to provide them with services. At least under our system, the subsidizers–small business owners, their employees, self employed, the wealthy–can choose their health insurance plan, premium and benefits, BUT….4. This is a BIG but (don’t get excited, there’s only one T). The subsidizer can choose, but what if the choices themselves were artificially restricted and prices increased by the way the subsidized used the benefits? See my next blog post, Subsidized healthcare part two. There are some valid justifications for “single payer” (government) healthcare, and I will cover those in blog post part three.

Bear with me, I have come to the heart of my anger about the injustice of subsidized healthcare. The United States enacted the ACA, Affordable Care Act, also known as “Obamacare”, in 2010, and all health insurance policies sold in the country had to be ACA compliant by the end of 2014. I was 64 in 2010, and paying $173/month for family health insurance, which included me, my wife and children. Just before becoming eligible for Medicare, I had to renew our insurance under an ACA-compliant policy. Our former policy was terminated, four years before the act required it, because insurance companies knew their costs were going way up (they would have to cover more conditions and waive many preexisting conditions). The replacement policy cost $263/month and covered a fraction of what the previous policy covered at a 60% lower cost! That’s what being a subsidizer looks like. Sure, I’m on Medicare now, and that’s obviously subsidized, but at least I’ve contributed “future premiums” for 50 years via Medicare taxes.

To summarize, here’s what I consider just healthcare, though unfortunately it isn’t likely to happen: 1. The cost of everything–prescription drugs, medical devices, hospital, imaging and physician charges–are fully transparent. 2. The user of the service or product can shop and choose insurance plans, physicians, hospitals, and knows in advance how much their out of pocket cost will be after insurance or subsidy. 3. Hospitals are required to disclose all prices, and for surgery, diagnostic procedures and medications are elective or discretionary, the patient is provided impartial counseling about their pricing and alternatives. 4. Since youth and health are temporary conditions, and the cost of healthcare by its nature has to be spread out over a population and over time, and the young and the healthy will always have to subsidize part of the total cost, the actual cost of their “subsidy” can be approximated, and “credited” to their Medicare account, to perhaps reduce future out of pocket costs.

The last idea here sounds radical, but insurance actuaries do those kind of calculations to set premiums by age and usage, for individuals and groups. It’s possible, feasible and inherently just, but not likely because the only constituency it benefits is individuals. If there was enough patience, intelligence and love for justice in our population to have this debate, who knows what could happen?

Author: iamcurmudgeon

When I began this blog, I was a 70 year old man, with a young mind and a body trying to recover from a stroke, and my purpose for this whole blog thing is to provoke thinking, to ridicule reflex reaction, and provide a legacy to my children.

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