[ Friday, July 10, 2009 ]


OT: Setting the table for my healthcare reform post. Oh, the number of people who ask me what I think about healthcare reform. What will happen? What should happen? Will this or that work? I don't know what will or won't work, but I have a pretty good idea of why things won't work, or won't work the way people think they will. Mostly, it is on account of two things: (i) the law of unintended consequences, and (ii) the failure to understand why things are the way they are, rather than just focusing the fact that things are the way they are. But that, especially number (ii), needs some set-up. Perhaps lots of it. That's why I've failed to post my missive on healthcare reform (that, and the fact that I'm unseasonably busy). But I will, soon.

In the meantime, trying to clear out some of the periodicals from my inbox, I saw a handful of items today that do a good job of illustrating these problems. First, I saw a letter written by an older lawyer (he went to law school on the GI bill after WWII) to the editors of the Texas Bar Journal, taking issue with a statement by the State Bar President in a prior issue. The President wrote, "At their best moment, all lawyers decided to go to law school because they thought they could help people." The older lawyer's objection: he went to law school to help himself by making money, thereby helping the rest of society be ensuring he was productive and earned a living in the service of his clients. He didn't go to law school to "help people," but to earn money so he could help himself (and presumably his family). Of course, by helping himself and earning his keep, he could then buy food from the grocer, clothes from the tailor, a house from the homebuilder, etc. The bar president's position, that all people who go to law school do so to help others, is certainly not even a good approximation of the fact that things are the way they are, and certainly don't come close to showing why things are the way they are. Sorry to shatter anyone's dreams, but most people go to law school because it pays handsomely.

Next, I saw an editorial in the June 22 issue of Modern Healthcare. Actually, the page (page 24) is a trifecta of my point in (ii) above. First, the lead editorial, is head/subheadlined, "Cat's still in the bag . . . but things could get ugly if it gets out that revenue is prime motivator." The key graf is the final one: "If Americans ever fully realize that too much of the system is aimed first and foremost at maximizing revenue for a few rather than improving the welfare of the many, the streets of Washington might be as full as those of Teheran." The editorial is somewhat rambling, starting with an observation of the protests in Iran, through Obama's healthcare reform efforts and specifically his direct pitch to the AMA, to an observation on The New Yorker's issue on the cost of care in McAllen, Texas. Specifically, the editorial quotes the following from The New Yorker: "Somewhere in the US at this moment, a patient with chest pain, or a tumor, or a cough is seeing a doctor. And the damning question we have to ask is whether the doctor is set up to meet the needs of the patient, first and foremost, or to maximize revenue." Uh, can't the doctor do both? Can't the doctor provide the patient with a service, thereby earning revenue for himself? Do we worry that plumbers or car mechanics are set up to maximize their revenue rather than meeting the needs of those with leaky pipes or radiator hoses? And, while we're at it, if the doctor doesn't make sufficient revenue, there won't be a doctor there in the first place. Since McAllen is such a hotbed of physician revenue maximization, surely there's a glut of physicians in McAllen, right? Uh, no, there's not. The "what" may be more healthcare spending in McAllen, but if you think the "why" is simply physician greed (at the expense of the patient, as implied by the quote above), you're missing the point; and, you're not going to fix that "what" by simply reducing physician compensation, certainly not without some unintended consequences.

Next, on the same page, a quote from Steve Pearlstein of the Washington Post:

"Docs seem to take it as a given that physicians in the United States should
earn twice as much as doctors in the rest of the world -- and five times more
than their patients. . . . Doctors are competent, hard-working professionals
trapped in a flawed system. . . . That system is no longer viable --
economically, politically, morally. The choice for doctors now is quite
clear: They can agree to give up a modest amount of autonomy and income, embrace
more collaboration in the way they practice medicine and take their rightful
place at the center of a reform effort that will allow them to focus more on
patient care. Or they can continue to blame everyone else and remain --
stubbornly -- a part of the problem."

Once again, it's the greedy doctors (as I'll point out later, if the jumping-off point for anyone's healthcare fix is "let's get the greedy [fill in the blank]s", I can guarantee you that they don't understand the why and their "fix" will not work). First, to the extent "doctors in the US make 2 times what doctors make elsewhere," what does that tell us? I suspect US newspapermen like Pearlstein make at least twice what newspapermen in the rest of the world make; given that the newspaper industry is in substantially greater a "crisis" than the healthcare industry, I'm guessing Pearlstein is volunteering for a 50% wage cut, right? How about car mechanics, or better yet, auto workers? Lawyers? Investment bankers? I'd guess the average US annual salary is twice the average annual salary of the rest of the world. "The US healthcare system is not economically, politically, or morally viable." Huh? It continues to operate, year after year. Nobody is dying in the streets (or at home due to rationed care, as is the case in countries with socialized medicine), so it's not economically non-viable. So far, just as in 1993 when the same players were singing the same songs, there is no political concensus that the healthcare system must be overhauled, however much Pearlstein and his ilk want to portray it that way. Therefore, it is not politically non-viable. And as for morally non-viable, . . . sorry, I'm at a loss to even understand his point. How is the current system immoral? How would its proposed replacement, a system that necessarily requires some sort of rationing*, be more moral? (*as for rationing, any change to the current system that is designed to reduce costs will necessitate it, unless we find slave labor to provide our care.)

Finally, immediately below Pearlstein, I found David Brooks of the New York Times: "Let's say you are President Obama. You've inherited a healthcare system that is the insane spawn of a team of evil geniuses from an alien power. Pay is divorced from performance. Users are separated from costs. Rising costs threaten to destroy your nation and everything you hold dear." Hmm. Well, our healthcare system, to the extent it is disfunctional, is the direct result of government meddling in the otherwise efficient free market. That "team of evil geniuses" came directly from the heart of the Democratic party (thanks, LBJ!) Alien? Not to Obama. Is pay any more "divorced from performance" than in any other business like, say, the newspaper business? It is really hard to define "performance," but generally, good doctors do make more than bad ones. "Users are separated from costs." YES. That throwaway line, ultimately, is the lynchpin for the entire problem with healthcare. But none of the health reforms proffered by Pearlstein or Brooks does anything to end that separation. And in fact, if anything, they want to separate users even more from costs. As for "rising costs in the healthcare system destroying the nation," I have 2 responses. First, have the economies of countries with socialized healthcare systems (or other systems that the proposed reformers of the US system favor) not suffered from the economic downturn just as the US has? If the US healthcare system is destroying the US economy, what is destroying the UK economy? Secondly, if you're worried about rising spending destroying the nation, take a look at the Stimulus Bill. That is what is truly destructive. Also, keep in mind that healthcare reform is "necessary" because of how high costs are now; but every proposed reform bill will increase the amount of money spent on healthcare (from a minimum of $600 billion to $3.5 trillion, according to some estimates), not reduce it.

Anyway, you can see why it's hard for me to tackle healthcare reform. I have started a blog post to run through my thoughts, and I'll try to flesh it out.

To the extent there is a public impetus toward healthcare reform, it is SOLELY because that is what the media and politician have trumpeted over and over again. In fact, the public "demand" for healthcare reform was greater in 1993 than it is today.

Prediction: Large-scale reform will not happen this year or next. It might've happened if Obama had tried it first. I believe that Obama came into office planning revolutionary change on many fronts, all with an emphasis toward socialist/statist structures: finance, the auto industry, taxes, and the size and scope of government, just to name a few in addition to healthcare. I also believe that all of these revolutionary changes are well beyond what the majority of Americans will stand for, so that Obama had the opportunity to get one done while his honeymoon was on. He chose the Stimulus Bill, which certainly has not delivered the successes it was virtually guaranteed to bring. He blew his wad. There is no appetite for large-scale unknown-result healthcare reform, and the failure of the Stimulus Bill (along with the impending failure of the auto industry bailouts) will cause a majority of Americans to resist sufficiently to prevent such reform. Mark my words.

Of course, more to come. . . .

Jeff [3:31 PM]

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