Distortions in the health care "debate"

In the past, I've written on this blog about the discourse of "soaring prices" in the health care debate. These ideas about "soaring prices" are again circulating in the discourse as people in California are hit hard by steep increase in premiums.

Absurdly, Paul Krugman (who certainly knows better) claims that "we need comprehensive, guaranteed coverage — which is exactly what Democrats are trying to accomplish". Of course he's right that we need comprehensive reforms and universal, guaranteed coverage. But even the left-liberal reader of Krugman's own columns should be well aware that this is not what is on offer in the Democrat bill in Congress.

The entire way that this "issue" is thought about and discussed in mainstream outlets reeks of deeply-seated ideological distortions. The most obvious example of this distortion lies in the fact that we are continually prodded to think of ourselves primarily as consumers. In the health care "debate", we are asked to assume the role of consumer, and then to think about what creative institutional reforms we could implement that might help make our object of consumption, health care, less expensive. In this way, the entire debate is reduced to technocratic price tinkering.

We are continually encouraged to focus our attention solely on consumption; but we never reflect back on the conditions of production. Thus, the realm of circulation rather than the control of the means of production are the subject of scrutiny. The result is the sterile debate about how to remedy "soaring health care prices", where the real underlying economic issues are not even considered. The basic configuration of power in our current system remains uncriticized.

The crucial question here (which is frozen out of the discussion altogether) is whether we should accept as legitimate the entire idea that health care is a mere commodity, and that health and well-being is merely a consumer preference. To drive the point home: why should we think that the best way of organizing health care institutions is along the axes of consumption, markets, and capitalist enterprises at all? Is a "preference" for health really analogous to a "preference" for Gucci?

My view is that the above ways of organizing health care institutions is ludicrous. This way of configuring the health care system is only attractive from the narrow perspective of investors and stakeholders in the (extremely lucrative) for-profit firms that dominate the "industry".

Think about it this way. With the exception of the top 1% of earners, nobody in the contemporary United States can afford to pay out of pocket for all of their medical needs. Even the very-well off (those making, say, $350,000/yr) would quickly find themselves bankrupt if they had to pay entirely out of pocket for cancer treatment.

Thus, for the vast majority of people (99% of us) insurance of some kind is required in a society such as ours. All of the talk of "just you and your doctor" is pure fantasy. Some kind of collective financing (i.e. insurance) for health care is unavoidable for everyone except for the super-rich. And we should not forget that insurance, by its very nature, is necessarily collective. Risks, costs, and so on are always weighed and calculated in large, collective contexts. Every premium, co-pay, deductible and so on is indexed to a host of collective considerations that the insurance company has.

So given that insurance is a necessity in a capitalist society such as ours, the question then becomes: what kind of insurance do we (as a society) want?

The obvious answer is that we (i.e. everyone) would want the most extensive, efficient, stable and guaranteed access to health care that is possible.

Now, nobody claims that institutions of this kind are "free", so a question then arises about how to best collect the necessary funds from a highly unequal society to pay for it. The answer to this question is simple: people should be required to pay according to their means. We should not ask people making $20,000/yr to pay the same flat rate as those earning $220,000/yr. That would not make any sense.

The simplest, least bureaucratic way of collecting these funds is by simply increasing the marginal tax rate. Notice that this would mean no more premiums, no more deductibles, no more copays. As long as you'd paid your taxes for the year, you would therefore have already paid every single health bill as well.

Notice also that simply increasing marginal taxation as a way of collecting funds means that we wouldn't need any new health insurance paperwork. We could just use existing paperwork. That is to say, this would entirely eliminate all of the atrocious wasteful bureaucracy associated with filing claims and determining patient eligibility. Under the current for-profit insurance regime, most doctors, for example, have to pay full-time staff whose only job is to sort through the labyrinth of different complicated forms associated with thousands of different insurance plans. Our current system is a bureaucratic nightmare whose fragmented, tangled mess of plans, policies, deductibles and copays are a constant source of frustration. This need not be so.

Notice also that this needless bureaucracy and billing is a waste of social resources: we should be spending that money on covering more people, building more hospitals, and training more doctors and nurses. We should not waste important dollars of our insurance payments on needless bureaucracy, advertising and silver lining for investors.

What we need is one large institution, one set of forms, and one huge collective pool of people in order to streamline paperwork and spread risk as widely across the population as possible. Everybody in, nobody out.

But the way current institutions are organized, all of the criteria above are subordinated to the demands of profit maximization. For instance, the person in need of medical attention is simply not recognized as a person in need at all: they are a merely unit of production from whom profits may or may not be effectively extracted. They are numbers on a screen. This is the reality of health care organizations whose operating principles are indexed to profits rather than to human needs.