Is Healthcare a 'Right'?

I have written very little about the healthcare debate because I do not consider myself sufficiently informed to add much value. However, I’ve seen others make some valuable contributions, which are worth sharing. In last weekend’s NY Times, bio-ethicist Pete Singer brings some honesty to the debate, in his opinion piece, “Why We Must Ration Health Care” (free registration may be required). The thought that more patients could be served at lower cost without rationing is simply beyond belief to me — there simply aren’t enough inefficiencies to wring out of the system, and if there are, political intervention usually isn’t a very effective means of eliminating them. This is just common sense. Reducing health costs will involve rationing, but this is not necessarily a bad thing, just a realistic assessment. The question really is how that rationing should occur, and whether this should be done by government, private business sector or individual choice.

The appropriate role for government is at least partially dependent on whether health care should be regarded as a right. This blog has many European readers who may take for granted that health care is a universal right. However, this is by no means a consensus opinion in the United States. A good friend in California city government told me about battles over cable television access in his town — many residents regarded affordable cable as a “right.” In some ways, health care seems closer to the right to cable than, say, rights like freedom of speech or freedom of religion. After all, rights to healthcare ultimately mean rights to someone else’s time, money or expertise… not exactly “unalienable rights.” I came across an opinion piece from Congressman John Campbell, a Republican out of California that attempts to wrestle with some of these issues; yes, it’s a political piece, and I know nothing about Campbell and his other views, but I think he tackles these issues in a common-sense, intelligent way.

None of this is to negate the need for an intelligent U.S. healthcare policy. As medical technology continues to improve, it’s likely that we’ll see more applications that provide limited returns for large costs — some kind of rationing, led my government effort, may well be desirable. Whether healthcare is a right, a critical part of a social safety net, a middle class entitlement, or none of these, is all a matter of debate as well. The key word here is “debate.” These are weighty issues that deserve more thought, time and public input than we’ve given. The argument that, ”if we don’t act quickly, we won’t ever have a solution” is highly unsatisfactory. It may be that we’ve had no solution in the past because either there is no real consensus on the tradeoffs, or the proposed policies are worse than the current realities. I, for one, am happy to see the healthcare debate move along a slower path.

Comments

[YoYoMama:]

Someone health care reform opponents are under the impression we are not already being rationed. We are. By the insurance companies. Not based on the health and welfare of the patient and the system, but based on what fattens the pockets of the insurance company.

Those who hold group insurance policies may not feel this as strongly as those on personal plans. But it exists nonetheless. The first ration (for personal policy holders) is to not cover persons with any pre-existing conditions at all. The second round of rationing comes in the arbitrary way insurance decides to pick and choose what treatments and claims it will pay.

It's the second round of rationing that drives many to medical bankruptcy, even while holding insurance policies, which is the case for 75% of filers.

Health care may not be a right. But what should be a right is that those who pay (quite handsomely) for their policies should be protected in case of accident or illness. Isn't that why we have insurance in the first place?

As it stands now, insurance companies have a free pass to RATION what they will pay, regardless of the health and well-being of the policy holder.

Jul 26 08:56 AM

[Old Trader:]

I found the comments made by the author's friend in Ca. city government about cable access being a "right", illuminating. Upon reflection, it seems symptomatic of our current society, and its growing sense of entitlement that, somehow, so many things that we "want" have morphed into "rights".

YoYomama: good call on how healthcare is already being rationed.

Jul 26 11:04 AM

[bigmoney:]

rationing makes sense, but how to do that? price rationing seems to the most capitalistic, but medical care doesn't lend itself properly to price signals. For one thing, its way too intertwined with government and big corporations. Most doctors (or rather their minimum wage receptionists) will scoff if you ask them how much an exam / procedure will be. Usually all they want to know is what insurance you have.

Medical care at a low level could be a "right". This could well established medicines, basic surgery, and trauma care. However what about organ transplants, bone marrow transplants, dialysis, etc.? Obviously the tax payer cannot afford to provide these uber-expensive treatements to any and all. With some illnesses, its fairly easy to exceed $1 million in medical care. And these are often for elderly. In some cases, pre-mature babies costs can exceed $1 million.

Jul 26 02:01 PM

[Rayden:]

Jeff - there is one aspect of healthcare which I think very few people have a good grasp on, but which is really key to understanding the debate. Where does the money go?

For a bottom up view, let's take "CBC", a certain very common lab test. The assorted costs of actually running this test in a small lab add up to around $2.50 (this includes labor, consumables, depreciation, administrative overhead, rent, etc etc). A fully automatic machine does it all... put in a sample, push a button, out come the results in 60 sec. That's an amazing technological feat, considering how complicated the test is.

So, the going rate for this test is under $5, right? Wrong. The typical billing rate for this test is anywhere between $15 and $50. Medicare lists the national median price at $15 and pays $11. This is actually farily typical as far as cost to billing rate ratio for a test or procedure.

So, labs should be amazingly profitable, right? Wrong again. Labs typically have a profit margin in the 15-20% range. For our hypothetical lab that runs CBCs, they may get a profit of $3 on the $15 they bill (Medicare runs basically at cost or at a slight loss, unless the lab has excellent economies of scale). How exactly does a lab do a test that costs $2.50, get paid $15 and end up with $3 in profit? Where does the extra money go? If you go hunting for the reasons for this discrepancy, you will discover what is broken about health care. I won't list the specific reasons here, I want to do this subject justice so it will have to wait for a future article I'm writing.

If you *could* actually go and have this test, or other medical procedures or drugs, for anything near cost (or even 2x cost), I don't think anyone would care about whether healthcare was a right or not: it would be cheap enough that the question would not arise in practice, any more than the question of whether access to (let's say) a computer is a right.

I propose that we should have abundant healthcare (ie expanded supply) instead of rationed healthcare (ie restricted demand), and that the best way to get there is to remove the existing huge obstacles to providing healthcare at competitive prices.

Jul 26 03:52 PM

[derryl:]

Since nobody has unlimited money to spend we personally choose to "ration" all the time. We choose to buy a car that's cheaper than the one we think is really cool because we also want to have a vacation: we are 'rationing' our car consumption. I'd like an electric Tesla and I could probably afford one, if I sold some assets and gave up on everything else I want to do with my money. But I choose to ration one of my wants because I choose to satisfy other of my wants.

We can strain ourselves trying to provide unlimited healthcare for everyone who wants it at no cost to themselves, but then we have to cut back on schools and water treatment and everything else we spend our limited resources on. And the high taxes required to fund 'free' healthcare means every household has less money to spend on all its other needs and wants.

We live with limited means and expensive services like unlimited health care squeeze out too many other of our needs. I agree with Singer. Health care must be rationed. We either ration ourselves by choosing not to buy expensive procedures because we have competing uses for our household budget, or the government rations by choosing not to provide us with expensive services paid for by our overtaxed neighbors.

I've seen some good ideas about reducing medical industry costs by getting ambulance chasing lawyers' hands out of the health care cookie jar. But other than reducing or eliminating the cost of malpractice insurance and all the unnecessary tests that are done for legal liability reasons rather than medical reasons, health care services are expensive and are not going to get cheaper. So they are going to be rationed, one way or another.

Jul 26 09:50 PM