Sunday funnies and not ...

Jack Kelly’s column today is very silly. His central premise is that everybody crapped on the CIA this past week. But the problems he discusses, in particular being a second seat on intelligence gathering (except when it comes to interrogation), would have had to have developed over some time. The CIA didn’t become the embarrassing relative on January 20th, George Bush and his administration had to be pushing them down for some time. In fact, Kelly mentions the CIA’s failure to see 9/11 coming, presumably to shift some blame on Clinton. But in the intervening year, the Bush administration did nothing to make the situation better? Also, Kelly literally seems to imply that other countries will only respect us if we torture terrorists. It is amazing how far we have sunk, pulled down by the likes of Dick Cheney and Jack Kelly.

I think a more important piece in the forum section is the one by TR Reid. Since conservatives have started calling the various plans in Congress “socialist” (actually, they pretend it’s one plan, one conspiracy), they have also made accusations that the systems in other industrialized countries have these awful features, such as forcing you to delay care, and making you take the doctor they want you to have (both basically rationing care). Conservative also say that medicine in other industrialized countries is primitive compared to the US. Of course, there might be something to that, in that at least for Congresspersons, they have absolutely the best care.

Meanwhile, those in favor of health care/insurance should welcome the comparisons to systems in other industrialized countries. In most every aggregate sense, the systems of other countries beat us. They pay less, yet they have better infant mortality rates and longer life spans. There may well be some specific diseases survival rates where we do better, and I have heard conservatives argue we are too fat and that may affect some of the outcomes. But to really argue that we have the best system, the conservatives are reduced to arguing, as did Mitch McConnell, that polls show Americans think their health system is the best. If the French think their system is the best, does that matter? Or if the World Health Organization rates the French system the best, does that matter? (no, the WHO is a bunch of furiner’s)

So first let’s be clear here, the American health insurance system relies on the worst features of capitalism, and suppresses the best features. As far as competition goes, for example, the American system falls down in at least two ways. Although the biggest cities may be different, in many markets, including Pittsburgh, there are one or two insurance giants that dominate the market. UPMC and Highmark could compete, but why bother? Neither has stock holders, both are non-profits who make “excess revenues” they can plow back into executive bonuses. I believe for the Universities, for example, both Highmark and UPMC offer plans, although UPMC has an edge because of its domination of Oakland. And I believe this story is repeated all across the country, albeit some places with for profit companies.

Our administrative costs for health insurance are the highest in the world. Evidently that’s no accident, paying claims, while important in every other country in the world, is considered a mark of failure for US health insurance companies. The fewer claims that are paid out of premium dollars, the more that could be returned to stockholders. Of course, that doesn’t apply to UPMC and Highmark, except that they could claim they need to be competitive with for-profit firms, to maintain their foothold here (they would call it tenuous, I would call it a strangle hold).

Now, I am not going to try to replicate TR Reid’s essay here, or even comment extensively on it. I don’t want to do that partly because other countries use a variety of different systems (a point Reid emphasizes). Some do rely entirely on private health insurance, some have health insurance entirely administered by the government. The one thing all other industrialized countries do is recognize that government has a substantial role to play in health care. It’s not that they see it as a human right. Rather other countries have realized that the free market can not handle health care in industrialized nations. If you leave it up to the free market, you end up looking something like the United States, where a substantial number of people have no health insurance, some number of other people have substandard insurance, and costs rise in part because everyone else pays the health care bills for these people. There are also more bankruptcies than there need to be, as patients (if they survive, or their families) struggle and fail to pay astronomical health care costs. Interestingly, conservatives want to make the situation worse, by removing one of the few government regulations there are and allowing insurance companies to sell health insurance across state lines. While this would seem to address the competition issue, insurance companies would have to try to set up physician networks possibly thousands of miles away, doctors would have to deal with getting reimbursement from a company possibly thousands of miles away, and patients … you get the idea. I suspect insurance companies might all set up in one state with friendly laws and use those laws as a shield. I know from personal experience that state insurance commissioners can sanction out of state companies and yet it does not curb their behavior. At least you can picket and embarrass local companies.

I did major in economics a long time ago, and while I am not saying that makes me Alan Greenspan (or even Andrea Mitchell), I did learn a little bit. Market failure is where the free market doesn’t work. One of the canonical examples is where the local government sets aside a piece of land for people to graze animals on (such as cattle or sheep) and people destroy it with over grazing. But monopolies or oligopolies are generally considered market failure too, and those are the cases where the government needs to step in. I think that the health insurance industry is a series of a ologopolies that feel free to not provide clear information to subscribers and drop coverage on flimsy pretenses, and thus needs regulation.

I haven’t mentioned anything about doctors and hospitals. That’s because I think we need to address health insurance first. I do think that there needs to be reform on the medical side as well. I think addressing rates of infection in hospitals, computerizing health records (which may not eliminate mistakes, but would make records easier to access and would also put more eyes on records) and finding a better way of addressing mistakes when they are made are all very important. But I think addressing health insurance will help the country as a whole more and faster.

Read the TR Reid piece in the Sunday PG, and talk to your friends about it.