Because we're wasteful, we need national health care

Robert Kuttner

December 14, 1990|By Robert Kuttner

WE NEED universal health insurance because 37 million Americans have no health insurance to pay the doctor, right?

Wrong. Our present system does leave a lot of people out -- but that's not the worst thing that ails it. Worse still is how it squanders scarce resources and increasingly denies freedom of choice to consumers.

Conservative critics will tell you that universal health systems like the Canadian one are guilty of the sin of "rationing." The Wall Street Journal recently RobertKuttnerran an editorial column titled, "Canadians Cross Border to Save Their Lives." In the Journal's account, a Windsor, Ontario, schoolteacher jumped the Canadian queue and purchased his triple-bypass heart operation across the border in Detroit.

Of course, there is plenty of rationing in America, too. Every time a mother gives birth in a general-hospital hallway, or a post-op patient is sent home early, or an insurance administrator refuses to pay for another day of mental-health treatment, or a nursing-home inmate presses a call button in vain, that is just as surely rationing.

The only difference is that these American victims of rationing can't buy their way out like the Journal's bleeding heart case from Ontario.

All systems of health care involve rationing. That's because if every single patient received every imaginable treatment that might do some good, it would consume 100 percent of the Gross National Product.

And that's why it's such a crime that the American health system is so downright inefficient: These are inherently scarce resources.

Our "market-oriented" system of containing medical costs has become a paper chase, in which hospitals try to inflate reimbursable items and insurance companies try to minimize their exposure by shifting costs to the patient or onto public insurers like Medicare.

Medicare, for its part, tries to shift the costs right back. Today, an operation has more possible prices than an airline ticket. It has one price for a paying customer, another for Medicare, still another one if Blue Cross is picking up the tab.

About half of the greater efficiency in the Canadian system is due to the simple fact that it eliminates the paper chase. Canadian hospitals are given annual budgets based on their caseload, and practice the best possible medicine within them. There is no insurance reimbursement to inflate, no need to process and review claims, suture by suture. A study by Families USA calculated that a shift to a universal system could save Americans some $52 billion a year in administrative costs alone.

By the same token, another standard rap against social medicine is that it limits consumer choice. But in the escalating war between the insurance companies, the HMOs and the hospitals, the real encroachment on consumer choice is on this side of the border.

Canadians remain free to choose their own doctor. Canadian hospitals remain free to decide how best to treat patients.

Americans' free choice, in contrast, is increasingly hemmed in by little monster called "managed care." This is a euphemism for the insurance company's second-guessing the doctor, the HMO's turning away high-risk customers, the private hospital's dumping low-reimbursement patients onto the city hospital. Ask your local doctor, especially one who works in a hospital, how much time he spends on the phone with insurance company "gatekeepers" who aren't even health professionals.

This doesn't make the insurance companies the bad guys: It's their only way of keeping costs from escalating further. The problem is that the American patchwork system is out of control. In a universal system, by contrast, there's no artificial incentive to over-use tests, to gold-plate technology or to complicate simple procedures for the sake of maximizing reimbursement.

What are the chances that we'll get a universal system in the United States? They're getting better every day. That's why the right wing keeps trying to discredit the Canadian example.

In Massachusetts, Ohio, California, Washington state, among others, there are serious drives to create Canadian-style universal health insurance within one state. Senate Majority Leader George Mitchell says the Democrats plan to make health care their leading national-policy issue for 1991.

Pollster Stanley Greenberg says that if the 1980s was the decade of tax revolt, the 1990s will be the decade of price revolt -- public outrage against the escalating costs of health insurance, of airline tickets, of energy. These were all brought to you by the free market, otherwise known as abdication of public responsibility.

So yes, we should be indignant that the American system of health care leaves a lot of people out. But it is wasteful and inefficient even for those it lets in -- and we all pay the bill. On the health-insurance front, the conservatives are the new bleeding hearts, and the liberals stand for efficiency.

Robert Kuttner writes regularly on economic matters. In this space yesterday, Other Voices presented the case against national health insurance.

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