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Health care costs, Congress, and the Supreme Court


The big question before the Supreme Court is whether Congress has the authority to regulate the medical industry by doing something different: requiring everyone to buy health insurance.   The question is whether the Constitution, by stating that Congress has the authority to “regulate commerce between the several states”, meant that Congress should be able to require everyone to have (to buy, or if necessary, be given) health insurance.  It is clear that medical industries involve “commerce between the several states.”  What is not clear is the extent of Congressional authority over the people.

We do know that Congress has the authority to forbid everyone from using cannabis, for example.  Does Congress have to authority to prescribe certain behavior as well as to forbid certain behavior?

The problem that is affecting medicine in the United States, at least the one Congress wants to address, is that people who cannot afford medical care wind up going to the emergency room and getting inadequate treatment for outrageous fees that they cannot pay.  The resulting bad debt forces the hospitals to obtain funding from the government for the part that insurance will not pay.  The people who cannot afford to pay suffer poor treatment and eventually early death, while at the same time hospitals have to write off large fees when these people inevitably pass through their emergency rooms.  There is both a monetary and a humanitarian cost to society and government.

To solve this problem on a national level, first Congress established a funding system, the requirement that everyone have insurance, to a pre-existing administration, the private insurance companies.  Additional features are funding through federal sources for those who cannot pay for insurance, and regulations that control insurance company behavior to ensure an equitable system.  There are many additional provisions in a bill that is reportedly 2,400 pages long.

The normal behavior of Congresspeople when faced with a large, controversial bill has impaired rational implementation of the reforms envisioned by the original bill.  There are many places in which changes have been made to suit one pressure group or another.  One of the big winners from the bill, it would seem, would be the insurance companies, whose business would have to increase if everyone is to be insured.

To return to the basic issue, the individual financing (personal payment) for medical care is an impediment to the cost-effective provision of medical care.   Patients naturally delay medical care when they cannot afford it. Because of personal responsibility for payments, physicians must consider relative affordability or even availability of care.  When prescribing a drug to treat any ailment, the doctor has to consider whether the patient can pay for it.  If a patient cannot afford the medication best suited to treat his condition, the consequences of taking a less effective or more toxic drug can make the patient’s subsequent care more difficult.  If the patient’s condition is not improved or he suffers toxic side effects, further care is more expensive.  When the patient didn’t have enough money to pay for the best medicine, he will have even less money to pay for the treatment of toxic side effects or the worsening of his original condition.  Thus, the lack of money leads to worse health and more expenses for complications.

The alternative to this cost-based treatment schedule would be a system in which the physician was free to prescribe the most effective medication in the first instance.  This medication would minimize the costs that follow the initial treatment.  In many cases, using the best medication that cost more would lead to lower costs in the long run.  This is the theory behind the use of “insurance” to pay for medical care.  Insurance would not necessarily solve the problem of initial cost, unless the company providing the insurance made the necessary assessments and provided coverage for the most cost-effective medication (formularies do not always provide the right medication based on this assessment, but they could do so.)

There is little controversy to the assertion that Americans pay more for poorer health care than many other highly developed nations.  We pay approximately 50% higher overall costs for medical care than certain European countries and we have two to four years shorter life expectancy than those countries.  The reasons for this problem are multiple, but the most important reason is that patients do not report for early treatment of illness and are not provided the most cost-effective initial treatments.  The most important reason for this is that we have personal responsibility for payment, and our initial reaction to illness is to try to minimize initial cost, to the detriment of long term health.

The best way to reduce overall health care costs is to anticipate personal responsibility for individual payment by interposing an advanced insurance-based system for everyone.  Under the insurance based system, the long term costs and benefits of medical care would be evaluated and the lessons learned applied to protocols of medical care that produce the best long term health results.  By delivering feedback to medical providers in the form of protocols, the insurance based system would modify care to improve outcomes.  Patients would be freed from the short-term decision making distortion that initial costs apply to the best medical care, and thus would be better motivated to do the right thing for their health.  At the same time, the insurance payments paid in everyone’s name from birth will finance the medical system in a reliable, consistent fashion.

Medicare has consistently been shown to have the lowest administrative costs of any form of insurance, less than half that of private insurance companies.  Therefore, we will gain the most cost savings from financing our medical care by deductions from everyone’s paychecks and universal eligibility for treatment under Medicare.

The individual mandate to purchase health insurance is, sadly, a compromise forced on the president by lack of whole-hearted support from Democrats in Congress for a real solution: the public option.  The lack of support can be traced to lobbying by insurance companies against the “public option” and any other solution which might compromise the profits and control of health insurance companies.  Health insurance companies are usually subsidiaries of larger insurance company conglomerates, and they spend huge quantities of money on lobbying for their interests.  The insurance companies have taken a position against “single-payer” health insurance because they believe that it will have a negative impact on their businesses.  They would be better informed if they lobbied for contracts to administer single payer insurance rather than opposing a critical driver of efficiency that reduces costs.

One Comment leave one →
  1. Schmuck permalink
    2012-05-17 12:01 AM

    This would be the only logical conclusion, however, we do not live in a logical political system. People care more about sound bites and twisted arguments more than logical ones and congressmen and women are more concerned about protecting their cash cows, which they will need for the next election, than protecting their constituent.


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