The Current Healthcare Debate Offers Little More Than Putting Different Band-Aids On A Broken System

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There are few things so exhausting as debating healthcare in the United States, where we claw each other’s eyes to achieve concessions the citizens of any other developed nation already consider a birthright. Most of the reason it’s so terrible is that it’s been conducted almost entirely within a faulty framework — how do we keep private insurers in business? Within those boundaries, there are winners and there are losers, but the essential problem still remains. Which allows the debate to fall into the usual pattern of Democrats making a schoolmarmish argument about paying more to protect the less fortunate, and the Republicans making schooldadish argument about why they’re not paying for your new shoes just so you can go out and ruin them again.

Obamacare merely patched a few of the more egregious holes in a leaking ship, and the GOP’s feel-good replacement plan largely corrects that by ripping off the patches and having a rum party on the deck. Speaking less metaphorically, the AHCA (can we just call it Trumpcare or Ryancare?) seeks to remove the individual mandate (which made people pay a penalty for not having insurance) while supposedly keeping the protections on not being thrown off your insurance for pre-existing conditions (unless your state decided to take the option to chuck those protections). No one really liked the individual mandate; it was meant as a concession to help pay for the other protections. The replacement plan also shifts the Medicare burden to the states (presumably to diffuse the blame), and defunds Planned Parenthood for a year as an added gift to… well… people who simultaneously hate abortion and preventing unwanted pregnancies. Gotta make sure those folks are happy.

Essentially, they’re shuffling around the same money so that the costs are borne by different groups. Which is only a logical solution in the sense that politics and advertising both work in basically the same way — by dividing people into groups and then targeting the message to each one. Politicians can keep fighting over who has to sit where inside the leaky ship without actually fixing it. The AHCA vs Obamacare mostly boils down to “My constituents shouldn’t be the ones getting dripped on!”

Another part of the problem is that much of the current debate seems to be based on the idea that better care will cost more. I hate to use Tomi Lahren as a frame for discussion, but she can be a useful divining rod for finding the nipple on the idiot bell curve, pandering as hard as she does to the perceived right wing middle:

I’ve heard variations of this same argument in every healthcare debate, the old “I don’t want to pay for someone else’s healthcare” argument to which Tomi adds a nonsensical Constitutional frame for added meme-ability, she really knows her audience.

This would be a straw man if only it weren’t so common. There are many reasons it’s a terrible argument, but first and foremost…

Healthy People Paying For Sick People’s Healthcare Is Exactly How Private Insurance Already Works

It’s pretty simple: the money private insurers make from people paying in and not having big doctors’ bills they then use to pay for sick people getting more care than they’ve paid in for. It’s kind of the reverse of the old record company model, where you sign 10 bands knowing that nine of them will lose money but the tenth will more than cover the loss. You insure 10 people knowing that nine will pay out enough to cover the tenth.

Point being, that’s exactly how a single-payer system would work. The difference is that right now, insurance companies (theoretically) compete to be your middleman. Hooray for choice! Only in a single-payer, government system, the government wouldn’t need to make a profit like an insurance company. In theory, the fact that private insurers have to make a profit and compete against each other to be your middleman would force them to be lean and efficient, which would outweigh the cost inherent in having a middleman taking a cut in the first place.

Except that they aren’t really competing, because for the past 70 years, insurers have had a special exemption from antitrust laws that allows them to collude and set prices in a way that other business can’t. You’d think freeing the invisible hand of the market to wave its magic Walmart price reduction wand would be popular on both sides, and you’d be right. Well, sort of. In theory. A bill to repeal this exemption, the McCarran-Ferguson act of 1945, passed the house in 2010 but died in the Senate. This year, it again passed the House, by a shockingly bipartisan vote of 416-7, at a time of historic political polarization. But it hasn’t yet hit the Senate, and if history tells us anything on this score, it’s that maybe we shouldn’t hold our breath.

McCarran-Ferguson has remained only through an accident of history. It was intended to be temporary, lasting only three years, only it didn’t. Like the carried interest loophole, it remains, despite theoretically broad bipartisan support. The best argument you could make against its repeal is that it wouldn’t help that much.

Which is interesting, because insurance companies were sure lobbying against closing it like it would. In 2010, Wellpoint, the parent company of Anthem, Blue Cross, and Blue Shield, spent $7.8 million in lobbying and contributed almost a million dollars to campaigns, with opposing repeal of McCarran-Ferguson and the public option high on their list of priorities.

Anyway, the point is, private insurance works largely the same way a single payer government system would, just unfairly and inefficiently. It was created so politicians could avoid scaring voters by having to say “socialized” — campaign donations from for-profit insurers was an added benefit. And every time we try to fix it we just make it worse and more inefficient.

Even if you prefer the for-profit model over the government ones, insurance companies still operate under special exemptions to keep them from competing too hard like other businesses would. If our private system worked really well we wouldn’t be having this conversation in the first place. Which is my next point:

You Already Pay More For Worse Care

There are lots of fun graphs in this Commonwealth Fund’s study of 13 similarly-developed countries from 2013, but the gist of it is that the US spends lots more than any comparable country and seems to get the worst health care in return. In the year studied, the US spent 17.1% of its GDP on healthcare, 50% more than the next highest country, France, at 11.6% (here’s the graph for that). And even that didn’t include the tax breaks for people with employer-subsidized healthcare, so the true cost is even higher. This despite being the only country on the list not providing universal care.

We also spent more out of pocket (on copays, prescriptions, etc) than any other country on the list except Switzerland, and even that cost doesn’t include private insurance premiums, for which US citizens spent $3,442 per capita, five times more than the next closest country, Canada, at $654.

And for all that money, we still had the lowest life expectancy, the worst infant mortality rate, and the highest prevalence of chronic diseases. There aren’t as many numbers available on outcomes since Obamacare, but none of the US’s rankings had changed in the 2014 study. Is this American Exceptionalism, believing we’re different and special to the point that it’s literally killing us? (Yes, the answer is yes).

Where Does All That Money Go?

Yes, Americans are the fattest and eat bad food and work dangerous jobs and live in a country that spends far less on social services (at least partly because all the money is going towards healthcare). But a recent study found that a full $375 billion was going just towards paperwork and administrative costs. That’s 15% of the total healthcare budget. Why? Because billing is so complicated that you need a massive support staff to handle it.

The study found that between 1980 and 2010, “administrative costs as a percentage of total care health care spending more than doubled.” The authors of the paper further estimated that the eliminated administrative waste of a single payer system alone could cover the cost of insuring everyone.

It’s no wonder that for the past few years, polls have found that a majority of all Americans are in favor of single payer system, including the vast majority of Democrats. And yet politicians, even Democratic ones, have been reluctant to push for it. Why? Well, we know why. Because if insurance companies didn’t siphon off such massive amounts of money ($12.2 billion in 2009, at the height of the financial crisis), they couldn’t contribute to political campaigns.

That’s why it’s so hard to take yet another intense debate over which patch better papers over a problem no one wants to actually fix. They would have us believe that this is just another chapter in the age-old, unwinnable debate between Freedom (you can choose your own flavor of poor care!) and Compassion (we’ll keep poor people from dying quite as quickly!). But as always, it’s mostly a debate about who gets paid. On that, they’ve been almost entirely unanimous. After 70-some years of this, maybe it’s time we stopped letting them.