My little brush with Michele Bachmann on CBS' Early Show the other day has solidified my morning routine of listening to NPR's Morning Edition: the sweet, sweet sound of logic and facts told through soothing voices.
This morning, NPR did not disappoint: I nearly died when I realized Dr. Patricia Danzon, one of my favorite professors at Wharton, was on Morning Edition! She knows more about health care economics than pretty much everyone in the entire world. The NPR story was about Newt Gingrich and Mitt Romney's vacillations on their health care platforms. Given the topic, I knew what Dr. Danzon would say. I had been waiting* for this since the Affordable Care Act sparked the debate over our nation's health care act into a full-on bonfire. The frenzied arguments have died down a bit in recent months, but they're back, baby!
I digress. As I listened to Dr. Danzon's speak, with her smooth British-with-a-hint-of-South-African accent, I thought, "please say it, please say it..."
And she did. Allow me to paraphrase: Health care is already socialized, in the least efficient way possible. And everyone pays for it.
The NPR piece highlights the fact that the individual mandate, vilified as a socialist idea, was actually a Republican concept when first introduced. Romney instated such a mandate in Massachusetts, leading to a population that was 98 percent insured, and Gingrich praised this plan in the past. Now that both candidates are catering to the extreme right, they are falling over themselves to lead the charge against the "socialization" of our health care system.
But our health care system is already socialized, in an extremely inefficient manner. Assume that everyone who walks into an emergency room will be given at least the basic level of care appropriate for their injury or illness. It's perfectly alright to assume this, since this is actually the case all over America. Now, for people who do not have health insurance, when they require medical care they must either pay out of pocket to see a primary care physician (PCP), where costs are more contained, or go to the more expensive emergency room if they are not able or willing to pay. Any of us could do this, but those of us with health insurance go to the PCP unless our condition is truly an emergency. On our health insurance plans, it's much less expensive to go to the PCP. That is, our health insurance plan incentivizes us to go to the PCP. Why? Because the emergency room is an extreme waste of money for any non-emergency health problem.
So who pays for the treatment of those uninsured people who go to the emergency room and then skip out on the bill? We all do. The way this happens can fill a textbook, but essentially we pay for their care through higher health insurance premiums, higher charges at the hospital, and so on. But we're not just paying for a doctor's visit and some antibiotics. We're paying all the costs of emergency care. Logically, we'd be better off if we paid for uninsured people to visit a primary care physician.
Sounds like socialism, but as a country we would pay less for health care and have better results. So, since health care is already socialized, as noted by Dr. Danzon, then what's the problem with a somewhat socialist solution (the Affordable Care Act) to making it more efficient? Is there a better solution via capitalism? I'm not sure if one really exists. This is health care. People's lives. We're not talking about manufacturing or bond-trading here. Different economic principles apply to each industry, and health care is by far the most confusing and rule-defying category.
Why do Romney, Gingrich, and their co-horts insist that the Affordable Care Act needs to be repealed? Why is socialism a dirty word? And is socialism really so bad if, by efficiently providing health care to those who cannot afford it, you also lower your own costs?
*Seriously, every time health care policy was mentioned in any national media outlet, I wondered when they were going to bring on Dr. Danzon. She's THE expert! I took her class on the economics of the pharmaceutical industry, in which my mind was blown repeatedly, and I worked in her office in the Health Care Management department at Wharton for three years during college.
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