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World Watch
First appeared in print in The Rhinoceros Times, Greensboro, NC
By Orson Scott Card December 26, 2004

Bush's Resolution for 2005: Make Health Care Fair, Excellent, and Affordable

How did the American health care system become so expensive?

How did our health care, which used to be between us and our doctor, fall under the control of executives at huge insurance corporations whose first concern is profit, not health?

I grew up in an era when "calling the doctor" meant that he'd come over to our house and stick an icy stethoscope on the chest of a sick kid while worried parents fretted in the background.

He'd tell our parents to give us orange-flavored chewable aspirins -- which were delicious -- and to have us drink lots of fluids. Maybe he'd suggest they rub our chests with Vicks Vap-O-Rub. Or give us cough syrup (boy, that codeine sure helped).

No waiting rooms -- that only happened when we went to a specialist.

How did medical care become such a nightmare today?

*

The first and greatest cause of the problem is that health care is astonishingly, fantastically better than it was in those days.

The reason so many people have to spent so much more money on prescription drugs is that fifty years ago there were no drugs to treat their condition. They just suffered or died.

Ditto with expensive surgeries, bone and joint replacements, and elaborate diagnosic procedures.

When there was nothing the doctors could do or prescribe, then from that point forward your treatment was free.

In fact, the main cost savings on health care in the old days was death. Dead people don't require medical treatment. It's the most effective method of keeping medical costs down.

It's our very success in keeping people of marginal health alive that made our medical system vastly more expensive.

*

People who complain about the high cost of drugs and the "profiteering" drug companies must recognize that this is one of the areas where the "free market" is not as helpful as ultra-right-wing economists would like you to believe.

These economists say that the profit motive will induce drug companies to research medicines -- but not if we punish them later for "making obscene profits."

And they do have a point. It costs a lot of money to test a drug to make sure it does what it's supposed to do without having dreadful side effects. And for every drug that succeeds and is placed on the market, there are many other drugs that cost the same amount in research and early testing, but never reached the market because they were found to be ineffective or too dangerous.

So when you pay for your drugs and are tempted to resent the drug companies for charging you so much, keep in mind that you are also paying for the drugs that didn't work and the drugs that might have been out there killing people.

It's government intervention that requires that drugs be tested and proven safe. If the government would just let the capitalists alone, drug prices would go way down.

So would deaths and hideous damage from side effects. So would the amount of money spent on nostrums that didn't work.

There's a reason the government intervened. We wanted a medical system we could trust. So the government requires that drugs be tested and meet certain high standards -- and I don't think anyone wants it any other way.

In an ordinary market system, the makers of a product that required a huge up-front investment could pursue two strategies for recouping the cost:

1. Set prices high, so you can amortize your research costs quickly, on a per-patient basis, or

2. Increase demand, so you can amortize your costs more gradually, but from a much broader customer base.

That's why you see those ads for prescription drugs. They're trying to increase the number of customers for their product. Even though they can't sell them without a doctor intervening and giving his OK, they can increase the number of people asking their doctors for the drug.

But for most effective drugs, there isn't that much of a voluntary market. People who don't have the condition that the drug is designed to treat probably aren't going to buy it no matter how much you advertise.

And people who do have the condition are probably going to do whatever it takes to get the drug no matter how much you charge.

So with a finite customer base (in most cases) and an urgent demand, where can prices go except up?

And when it comes to really rare conditions -- something that only three hundred people in the United States suffer from, for instance -- it makes no sense at all, in a free market, to spend a penny researching a drug to treat their condition. Unless they respond to an existing drug, developed for another purpose, they're out of luck ... in a free market.

*

The cost of doctoring is an entirely different story. Again because of government regulation in the public interest, we make it difficult to become a doctor.

(In a free, unregulated market, anybody could call himself a doctor and start treating people. The free market might eventually get rid of them because they would lose repeat business, their patients being dead. I doubt most Americans would prefer the free market over the government-regulated one.)

The policing of the competence of doctors was left up to other doctors: After all, who else was able to tell the difference between incompetent doctoring and the ordinary losses and failures and even mistakes that will happen in any system of health care?

But the doctors didn't do their job. Like cops who turn a blind eye to abusive policemen out of a misplaced sense of loyalty or fear of professional repercussions, doctors turned a blind eye to those among them who were killing patients through their ignorance, incompetence, stupidity, clumsiness, or carelessness.

What doctors refused to do, lawyers stepped in and did for us -- they punished the bad doctors for malpractice.

The trouble is, lawyers and juries and judges aren't competent to judge what constitutes competence in the medical profession. So any negative outcome became a potential lawsuit.

Since doctors were perceived as rich (and still are, despite the fact that fewer and fewer of them are), juries had no qualms about dipping into the doctors' deep pockets to compensate "victims," whether they really were victims of incompetence or simply had a condition whose treatment was risky or that was devilishly hard to diagnose.

Doctors couldn't stay in business with the threat of complete financial ruin hanging over their heads. So they had to pay for malpractice insurance.

The cost of the insurance premiums was passed on to the patients -- and, obviously, it was the patients who were successfully treated who remained alive and productive enough to keep on paying for the doctors' insurance premiums. As usual, the dead refused to go on paying their share of the cost of health care.

So the consumers also turned to insurance companies, either directly or (most commonly) through their employers or the government.

This meant that instead of the cost of health care being in any way between doctor and patient, it was now between employers or government on the one side, and insurance companies on the other.

We ordinary people are not the customer of the doctor -- the government and the insurance companies are.

And most of us aren't the customer of the insurance company, either -- our employers are. They decide which health plan or HMO we'll belong to. And the HMO or insurance company decides which doctors we can go to, how much we have to pay out of pocket for ordinary treatment, which tests the doctors can -- or must -- give us, which treatments we can receive, and how long we can receive them.

They decide which conditions are terminal or perpetual -- because the only treatments for them are "experimental" and therefore won't be paid for.

*

Exclusions are at the heart of insurance company profitability. The way to make money in insurance is to take in more than you spend. With life insurance, they know that everybody's going to die -- but if you have a large enough group, most of them won't die right away. That allows you to invest their premiums and make so much money from that investment that by the time you have to pay the death benefit, you've made a profit on the deal.

Health insurance is different. You have to pay out all the time. There's no actuarial interval in which to invest.

You have to make sure that the premiums you bring in will not only cover the medical expenses for the entire group, but will also provide a profit for the stockholders and pay the salaries of the insurance company employees.

There are only two ways to do this: Charge higher premiums for insurance coverage, or find ways to pay out less.

Whenever your employer says to you, "We've improved your health plan," then either your co-payments and deductibles will go up or the benefits will go down.

Or your employer will actually cut into his own profits by genuinely improving your coverage at no extra cost to you.

Ha ha ha ha ha.

And that's for big companies, where there are enough employees to spread the risk around.

Small companies or self-employed people have to pay far, far more in premiums. Why?

If you take all the self-employed or small-company employees in America, they're a huge group, and actuarially speaking, there's no more risk in covering them than in covering the employees of huge corporations.

But when you cover huge corporations, much of the administrative cost of insurance is borne by the corporation. After all, their human resources department already has most of the records you need and has people on staff to do a large part of your paperwork.

Small businesses and self-employed people are not experienced in the same sort of record keeping and don't have the same perspective as human resources departments. The people who are covered aren't faceless employees in a bureaucracy, they're the five guys who work together and when one of them gets sick, the boss takes it personally.

In other words, small businesses and self-employed people aren't reliable allies of the insurance companies. So all the administrative costs have to be borne by the insurance companies.

But that's still a relatively trivial cost. The deepest reason why self-employeed and small-company coverage is so expensive and so inferior is because the insurance companies can get away with doing it that way.

They exclude as many as they can, and charge the ones who can afford to pay as much as possible, and make sure that they have exclusions that let them get out of paying for anything they can avoid.

*

Which brings us to the bread-and-butter of the insurance industry: "Pre-existing conditions."

Our third child had cerebral palsy. We could not get coverage for him, period. Actuarially, it made sense -- any illness he got struck him harder than our more robust children. A cold was more likely to turn into pneumonia and require hospitalization. He needed special wheelchairs, special ... well, special everything.

Early in his life, when we didn't make much money, we got help from a few charities -- that's how he got his first wheelchair. Later, we had enough income to pay for his health care ourselves.

But a lot of parents of kids with cerebral palsy weren't so lucky. Their children would require care forever -- and as they got older, it became harder for the parents to provide it themselves, not while they were holding down jobs and taking care of other kids as well.

The really poor families got government help. But in the vast middle range, these parents who could not get insurance and did not qualify for government aid sometimes had to resort to methods they hated to use: Like legally severing their beloved handicapped child from the family so that he or she would become a ward of the state.

*

Such terrible choices should not be necessary.

People should not die younger or live in needless pain and suffering or have to break up their family just because the cost of health care is so high.

Doctors should not be driven from certain specialties -- like obstetrics -- because every negative outcome leads to a lawsuit.

Drug companies should not be forced to leave important research alone because there is no hope of recovering the cost of developing treatments for rare conditions.

The ideologues of right-wing economics will tell you that the free market is the answer.

The truth is that the free market is the problem, and if we had less government regulation (of the education and licensing of doctors or the licensing of pharmaceuticals) we'd hate the "solution" far worse than the problems we have now.

We don't want a market-driven solution because the free market selects for death and suffering.

At the same time, we don't want a completely government-regulated solution because then the government is the only customer -- not us.

In fact, what we really want is to have us -- the consumers, the patients -- get back in control. While at the same time, we want everyone to have fair and decent coverage.

*

Because the problem has many causes, there will need to be many solutions.

We need to end the rule of secrecy within the medical profession. All doctors' records and all hospitals' records need to be open for public examination (concealing only the patients' identities, of course). So when you go to have an operation, you can consult a reliable online source, for free, to find out how many of these operations your doctor has performed and how many of the operations resulted in death or other kinds of failure. Ditto for hospitals.

At first this will terrify people, because there are negative outcomes far more often than we suppose.

Eventually, though, people will come to realize that the medical profession is composed of human beings, and when we decide to submit ourselves to a doctor's care, we have to realize that he will do his best but won't be perfect, and we should adjust our expectations accordingly.

We need legal reform so that our health care dollars aren't getting poured down the toilet of making a few lawyers obscenely rich. Whether that takes the form of caps on punitive damages or limits on dollar amounts lawyers can take home from a single case, this bleeding wound in the health care system needs to be stitched up now.

And frivolous, exploitative suits by lawyers without a legitimate client should be treated as fraud and the perpetrators deprived of their license to practice law.

Yet at the same time, unless the medical profession learns how to police itself, or the government spends more time and care (and money) on licensing enforcement, we will continue to depend on lawyers to provide us with incentives to get rid of the few bad doctors who hurt people that could have been helped.

So budgets for medical licensing enforcement must be increased; states must share information across state lines so bad doctors can't evade penalties by moving; and people who knowingly practice medicine improperly or without a license must be jailed as enemies of society.

We need the government to establish a floor, in two areas:

For the unemployed and the part-time working poor, there must be a fair minimum of health-care coverage provided by the government.

For the self-employed and for small businesses, the government must allow them to join health-insurance unions and require the insurance companies to give them exactly they same treatment as actuarially similar corporations.

And for those who opt for self-insurance, there must be universal catastrophic health care coverage, including full coverage for infants with extraordinary medical needs from the moment of conception.

In my small business (four full-time and several part-time employees) we would actually do better to self-insure -- to maintain a savings account to meet the ordinary health-care needs of our employees. We only pay for health insurance right now because one of our fulltime employees has a growing family (and therefore we have to pay for maternity coverage for all our employees) and for fear of catastrophic medical needs beyond the capacity of our company to pay.

There should be no cracks through which people could fall out of health-care coverage entirely.

At the same time, this universal coverage should be left, as much as possible, in the hands of the patients and the doctors.

*

So here's what is actually possible:

Not some massive plan that will fix everything -- it can't be created, it can't be made into law, and it won't work anyway because there will always be unintended consequences.

Instead, each part must be addressed separately, negotiated carefully and in good faith, and then watched closely so that when the flaws show up (as they will, even with the best solutions) they can be tweaked.

Inevitably, somebody will find a way to profit indecently from the improved system -- so we'll watch for and close those holes.

Inevitably, something will prove to be more expensive than anyone thought, and costs will rise -- so we'll readjust the system in order to cover legitimate costs.

Inevitably, government and corporate bureaucrats will try to do jobs and make decisions they are bad at, and will need to be reined in.

Inevitably, some special interest or other will wail and moan that they aren't getting what they need -- they have to be ignored until we have time to see what each new improvement actually does.

Who will wail and moan? Doctors. Hospitals. Medical schools. Pharmaceutical companies. Insurance companies. Republicans who will claim that the free market is being ruined. Democrats who will claim the poor aren't being well-enough served.

And here's where we come to the crux of the matter: Serious reform is impossible if either party is determined to gain temporary political advantage over the other.

We can only fix this if both parties are led by statemen who discipline their own members to cooperate in finding incremental solutions and tweaking the system for many years in order to fix the mistakes and new flaws that show up.

If you hear Republicans screaming about "socialized medicine" or you hear Democrats screaming about how "this is hurting the little guy," we should demand that they stop trying to score points off of our suffering and shut up and make the compromises needed to get things done.

Then, after we've made some important changes, soberly examine the results over time and, without screaming or blaming or trying to profit politically, go back and tweak the system to further level the playing field.

There are plenty of lobbyists who want every part of the health care mess to be cleaned up except the part they profit from.

If we elect our government officials for anything, it's to ignore those special interests and represent the interests of the public at large.

*

With a better-informed public, a level playing field for all customers of insurance companies, a floor below which no one can fall, mandatory catastrophic coverage for those who opt to self-insure, government funding for research into cures for rare conditions, tort reform, effective licensing and information sharing, and statesmen who refuse to profit politically by derailing the process of reform, we can have a health-care system that we can be proud of, for its quality, for its reasonable cost and profitability, and for its fairness to all our citizens.

It will never be perfect.

But it can be good.

And it can certainly be better in all three categories than it is right now.

We have no higher domestic priority for our federal government than this. Our lives depend on it.

Copyright © 2004 by Orson Scott Card.


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