How to Pay for Health Care, a Conservative Answer

When one expresses skepticism at instituting government run health care in the US, one is pretty quickly asked: "Well the current system is obviously broken. What do you think we should do about it?"

There is a temptation, for someone like me, to reply that the whole world is broken, and what is anyone going to do about that other than trying to treat those around him as well as he can? But questions are seldom totally without answers, so the question stuck in my head and simmered there for a while.

The result is not necessarily intended to be an enactable answer -- which is fine since no one has made me king. But it is intended to provide some sense of the sort of characteristics a good solution ought to move towards, at least according to the principles that I have in mind.

General Principles

• Little though we enjoy it, it seems to me important that people pay for what they get. This can be done according to their means, and perhaps their means may be very small, but I think that our human dignity and our sense of responsibility for what we do both requires that we achieve things, as the story of Adam and Eve puts it: "with the sweat of our brows".


• Big organizations almost always seem to turn into slow, beaurocratic, unresponsive organizations eventually.


• If we have a moral duty to make sure that our fellow humans receive all reasonable medical treatment that they need in order to preserve life and dignity, it seems to me that moral duties are best carried out by small groups and individuals, not massive impersonal organizations.

Current Difficulties

• Going to a government-run system creates the ultimate set of hidden costs. With paycheck witholding, we often have little visibility to how much we pay in taxes anyway. The same criticism can, to an extent, be leveled against employer-provided medical insurance, though at least there we have options.


• In a world where people's behaviors can often be predicted by models that assume selfishness, it seems likely that a government paid system would result in a slowing in R&D and investments in new facilities. Assuming what I've read to be correct, the UK has a serious problem with aging medical infrastructure, and Canada's approach to keeping costs under control has been to announce to doctors that they are now paying less for the same work than they used to.


• By its nature, employer provided actuarial insurance makes it the most expensive to get coverage for the people whose need is greatest, and makes it most difficult of all to insure those who cannot work through age or infirmity -- who often are also people who need medical care. Currently we deal with this through a government run system -- which is slated to become impossibly expensive very soon as the baby boom generation retires.


• Compated to other elements, this is a rather pragmatic issue, but it seems to me that our malpractice lawsuit/insurance mess must add a huge additional load to our system, not only because some doctors have to pay over a quarter of a million dollars a year (per doctor) in malpractice insurance (and then pass that cost on to their patients in the form of higher fees) but also because the fear of malpractice suits results in lots of additional tests and procedures being done "just in case". I assume that any government-run healthcare system would shut down the malpractice industry (or at least cap it) and so it seems only fair to assume that the same should be done in any non-governmental solution.

Solution
It seems to me there has to be some sort of system for having the community as a whole help those who cannot afford all the medical care they need, yet at the same time a human and practical need to keep said community down to a small enough group that it remains a personal and human institution with minimal overhead. What I would thus propose is that households (probably defined in roughly the same way as they all for income tax) organize into independant groups -- let's call it a "medical community" if that doesn't sound too Orwellian. You'd need a minimum size of about 1000 households in a group and a maximum size of perhaps 5000. If a group got over that size, it would be required to split.

The medical community would charge a monthly fee per household (perhaps with a couple of levels for single vs. multi-person) which would go into the community pot to cover medical expenses. When you went to the doctor, got a presciption, etc. -- you would provide the information for your medical community and might also pay some sort of co-pay. (It seems to me that co-pays are important to incent behavior. For instance, in our current insurance we pay $25 at the doctor's office, $50 at the after hours care, and $250 at the emergency room. However little one may want to pay the $25 at the doctors office, the incentive to take care of things in a timely fashion rather than waiting and landing in the emergency room.) The rest would be covered entirely by the medical community.

Membership in a medical community would be mandatory, and communities would not be allowed to exclude members because of age or medical condition. Each community would have one or more full time administrators whose job would be to oversee the bill paying and provide reporting to the community memebers on a monthly basis. Each community would be able to formulate its own rules on what was covered and to what extent. In most ways it would work best if communities were regional, but I think it might also be important to have them based around culture or belief system as well. For instance, a specifically Catholic community might refuse to pay for abortions, sterilizations, birth control, etc. Being in a like-minded community would also help people from being under pressure that related to their beliefs -- say pressure not to have "too many kids".

At the end of the year, if there was money above a certain threshold left in the community coffers, each member would recieve a refund check. When there were unusually large expenses to help a certain member, others would be kept appraised, especially if an extra assessment were required. However, even with only 2000 families, some pretty expensive care becomes affordable. (Say two kids out of the community need special medical care that runs to a million dollars each -- that works out to $83/household/month for 12 months.)

There would be a difficult balance to maintaining a proper ownership sensibility. On the one hand, you want people not to get care they don't need, get generic drugs when possible, etc. in order to have money left and get a refund at the end of the year. On the other hand, you don't want people so hounded on these issues that they forgo needed care.

For those who are truly poor, I think the best approach (rather than throwing them into a vast government paid system) would be to have the government provide a credit to the community equal the to monthly dues for families unable to pay. There might also be a provision where if the head-of-household (or one of several) loses his/her job, that families fees are waved until they regain employment, and the community is able to get a credit from the government.

Another thing that might be a positive would be having "excessive cost" insurance that a community could buy from an insurance company, so that if one household in the community had medical costs of over a certain very large amount (say $250k) in one year, the excessive cost insurance would pay the rest. The rules on excessive cost insurance would have to state that the only factor in the rates would be number of people in the community.

Problems With The Solution
In many ways, I think a community-type solution like this would provide the most humane approach to making sure that all were able to receive needed medical care, while not centralizing health care so much that it stiffled competition and took the positive aspects of market forces out of American health care.

However, community also has downsides. While feeling like you own your money tends to make you more responsible with it, there are always those who take advantage of others and also those who week to keep others from getting what they need.

Also, while I think it's important to have a small enough institution so that you know where costs are going ("The Jones family was in a terrible car crash. Keep them in your prayers and have someone organize bringing meals to them for the next week." "Samir's son has been diagnosed with Leukemia -- we're going to see if we can get him into Children's hospital and we'll keep everyone up to date on how it's going.") small entities are often in danger of being badly run. Each community would need a competant board, and one or more competant (read well paid and professional) administrators -- despite anyone's instinct to cut costs by doing it themselves on the side.

I'm sure there are other things that I'm not thinking of as well which will jump right out to readers.

I'm curious as to the reaction to this kind of idea both from those who favor government health care and those who (like myself) are very much against it.