Why Health Care Reform Won't Work

This post was difficult to write for a number of reasons. First of all, any topic touching on current political issues is immediately distorted and shoehorned somewhere onto the Republican/Democrat spectrum. The linguistic judo required to escape such juvenile binary categorizations are beyond my meager abilities as a writer.

Secondly, the problems that health care reform (HCR) is attempting to solve are very real. Medical costs contribute to almost half of all personal bankruptcies, our population is aging, and wages have not kept pace with the rise in costs. It is therefore clear that some sort of reform is necessary, probably just not the kind we're going to get. Here's why.

It is clear that the health care system as it stands is bankrupt. To help fix cost overruns, HCR has included a provision for an individual mandate that it hopes will prove to be the deus ex machina, corralling young and healthy payers into the system, thereby reestablishing solvency and magically providing affordable health care to everyone. I am utterly opposed to the concept of being forced to buy anything for any reason, there but there are other reasons to believe that the mandate won't work as planned.

The fundamental problem with the idea of health insurance is that it is so much more complex than other forms of insurance. For example, most homeowners pay for some sort of fire insurance. There are policies for flood insurance in places like New Orleans, and earthquakes in California. These types of insurance are conceptually simple. Claims don't get filed for maintenance or general repairs, and insurance is understood to be a last resort for when the house burns down, floods, or gets swallowed into the San Andreas fault. Because it's an all or nothing deal, you don't get to file for flood insurance when the drain clogs and your bathtub overflows.

It is also easy to understand the causes behind destruction of property by natural forces. A house built on a floodplain faces an above average risk of flood damage, and insurance will cost extra if it can be purchased at all. Fire codes demand that houses be inspected for faulty wiring, code violations, or other potential safety issues before they can be built or insured against fire.

If health insurance were like regular insurance:
*No claim could be filed unless a life was in immediate danger or death was imminent.
*Any coverage would be subject to rigorous, periodical health inspections, and "code violations" or unsafe behaviors such as smoking and obesity would be penalized.

There are other differences. Take for example the accumulation effect, or the extent to which consequences are "baked in" no matter what corrective action is taken. A old house can be renovated and brought up to code (and no insurance claims are filed in the process), but no amount of corrective action can completely reverse the health complications brought on by forty years of smoking, heart-clogging foods, and a sedentary lifestyle.

There is also difficulty in separating the direct consequences of an action with its secondary effects. Take smoking again as an example. It has been proven again and again that smoking not only directly causes numerous health problems, but also aggravates conditions that already exist, or ones that may not otherwise have become significant. All significant medical costs are theoretically covered if the person has insurance because there is no way to know whether a given condition is the result of bad luck or poor choices, and therefore we prefer to err conservatively, especially when we consider that we too may need our own assistance in the future.

Spreading the risk of personal decisions across society is a variety of moral hazard, which is defined as the increase in risky behavior brought on be the ability to outsource the consequences of said behavior. Most of the public was introduced to moral hazard when the financial industry was getting bailed out after its own poor "life choices." For all the wailing and gnashing of teeth over rescuing Wall Street, we seem to have no qualms about outsourcing our own personal health risks to the general public and engaging in behaviors likely to result in the need for increased health services.

I could at least feel better about reform if it included incentives for healthy lifestyles and reimbursements for preventative care. But there aren't any. Instead of attacking health problems across a whole spectrum, we are choosing only to deal with them at the most expensive stage. Furthermore, the tools we use treat late stage conditions are nowhere near as effective as preventing them in the first place. We know that personal responsibility and preventative care are effective, why then have they been left out of the most comprehensive health care bill in recent history?

This is why I find it utter impossible take the supporters of the reform bill seriously when moral issues are brought up in defense of HCR. Unless supporters are willing to admit that drastic restrictions on personal behavior are the inevitable outcome of an individual mandate divorced from any preventative incentives, and that cost estimates are wildly optimistic (See also: Afghan war, Iraq war, Social Security, Medicare), I have no reason to view HCR as anything other than a political stunt. This debate won't be ending any time soon.