Tuesday, August 18, 2009

Rooks and Health Care Reform: Ignoring Cause and Effect

Let’s just stipulate up front that I find Doug Rooks to be a thoroughly annoying big government propagandist (or worse) who specializes in shallow and uncritical thinking. It only makes it worse that our local “watchdog of government” free press pays him for his efforts, and prints them with that innocent and kindly little photo to disarm readers.

Rooks wrote recently about “effective reform” of health care reform.

This time around, I won’t parse the details of his effort and respond. Mostly because Rooks’ regular intake of Kool-Aid has caused him to completely miss the larger issue.

Caring liberals like Rooks don’t recognize the relationship between causes and effects in public policy. Effects are where the emotional capital is; that’s why we often see ‘special guests’ at various political events who have a terribly sympathetic story about how they were affected by some perceived wrong.

At the same time, we never see politicians rolled out who were the cause of so many of our problems. Instead, we find politicians, and often the ones who caused some “problem,” touting how they have the solution for it, if only we’d give them more money.

Linking cause and effect is typically denounced as “fixing the blame” when we need to “fix the problem.” Well, if they don’t understand the cause of the effect, their attempts to fix it fall into the “do something, do anything” category of blunt instrument legislating, calculated mostly to generate much public praise.

In Maine, especially, the dominant challenges in health care coverage that cause hair to spontaneously combust have been caused almost entirely by government intervention and policy. And the worse the problems get, the more those who caused them insist that we must let them solve them. In doing so, they exhibit the first signs of a sort of collective dementia, where they can’t seem to remember leaving the oven on, but they insist that we buy them air conditioning to cool the kitchen down.

I’m going to explain by making a half dozen or so assertions about the underlying causes. I invite any and all to challenge these points.

1) The governing majority in Maine over the last 30 or more years has actively driven up the cost of health insurance by enacting regulations such as guaranteed issue, community rating, and a rich list of mandated coverage for all buyers, regardless of their needs and desires. The net results are that buying coverage in Maine can cost nearly twice what it does in New Hampshire, and that the private insurance market finds operating in Maine to be unattractive. Most have left, and the notion of free market forces and “competition” is virtually non-existent.

2) To make things even better, the ruling majority has made sure we can’t buy insurance available from companies in other states, like we do with our auto and homeowner’s insurance. Result: buyers trapped in a tightly restricted market with the highest possible prices.

3) Maine is the oldest state in the nation, increasing overall demands on the health care system. At the same time, average incomes are very low. Result: with the high prices described in the previous points, we end up with the perfect storm of high utilization, high insurance prices, and inadequate income to pay for it.

4) Maine’s overall economic policy, especially taxation and business friendliness, virtually guarantees that the median age will continue to increase, and that the younger entrepreneurial demographic needed to pay for public services will continue to leave and/or avoid the state. Bluntly speaking, the state is in a demographic winter leading to a death spiral, and “quality of place” is not enough to turn it around. Pundits like Rooks either can’t understand, or avoid the truth because they simply can’t accept it. They’re in the denial stage, and won’t move on to more productive discussions.

5) In other words, we find ourselves with a broken and unsustainable “system.” We have more demand for health care services, an increasingly unaffordable insurance product, and an income base that is hopelessly tilted towards poverty levels.

6) Consequently, more and more people exit the private market and enter the public programs. Maine’s Medicaid enrollment figures are the highest in the nation, and we continue to relax eligibility rules.

7) It’s clear that state government is virtually totally responsible for the increases in private insurance premiums because of excessive regulation and mandates, coupled with driving out competition and cost shifting to cover the gross underpayment public programs make to health care providers.

8) Government claims that private program premiums are skyrocketing and generating huge profits while shamelessly masking the clear unsustainability of public programs. If costs of public programs were stated in the form of annual premiums, the government programs would be increasing in cost more quickly than the private programs.

9) At least if real costs were addressed; but they are not. Government “reimburses” at most 60-80% of actual costs of public care. Result: “real costs” get shifted to the private insurance market, further exacerbating the cost of that product.

10) To add insult to injury, the state does not even pay the bills it incurs at those artificially low reimbursement levels. Maine currently owes $400 million plus to health care providers, and there is no reason to believe the state is committed to pay off that balance. Why? Because they can, and it’s virtually impossible to collect – they are the government, and no one will take them on.

Add all these factors together, and you have a “system” that is destroying itself. Inputs, feedback loops and controls are inadequate to the need. Simply changing how the bills are paid will not correct the fundamental weaknesses in the overall economic climate.

And we owe it all to government. And it's clear that further government involvement will only lead to more problems.

But I guess that’s OK for some. The more problems government causes, the more political careers that can be advanced by proposing to fix them. It should be fun to watch when the private sector providers are completely eliminated, and the only thing left to demonize and blame is government itself. There'll be no option left except a circular firing squad.

No comments:

Post a Comment