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August 26, 2009

Health care: conservative myths, liberal myths

Today's column is on the big myths of health care reform -- the conservative myth and the liberal myth. The conservative myth is that malpractice lawsuit reform will do much to restrain soaring costs. The liberal myth is that preventive care will save money for the system as a whole. We need tort reform AND more investment in preventive care. But to pretend that either is the solution to out-of-control costs is disingenuous.

The Washington Post's Charles Krauthammer has joyfully discredited the liberal myth.

However, prevention is not, as so widely advertised, healing on the cheap. It is not the magic bullet for health-care costs.

You will hear some variation of that claim a hundred times in the coming health-care debate. Whenever you do, remember: It's nonsense -- empirically demonstrable and [Congressional Budget Office]-certified.

But the guy keeps yammering on about tort reform as the fix for health-care costs. What he doesn't mention is that tort reform, too, as a significant health-care solution, is also the subject of a negative CBO verdict. Such is the nature of the health-care debate. From my column:

The nonpartisan Congressional Budget Office, as usual the best source for this kind of analysis, says malpractice costs make up only 2 percent of health care spending. "The evidence available to date does not make a strong case that restricting malpractice liability would have a significant effect," the CBO says.

Posted by Jay Hancock at 10:04 AM | | Comments (6)
Categories: Health Care


Jay I agree that we need to stop the myths on both sides and look at the potential benefits and risks of any reform. I don't think there are many who wouldn't agree we need to reform the system. What is needed is for both sides to sit down find the areas they can agree on and then go from thre to craft reform that makes sense.

Here are some inconvenient truths:

(1) Americans in aggregate spend a lot on health care because in aggregate we consume a lot of health care services. We can certainly reduce health care spending if we give patients a pill and send them home but who thinks that this is the reform Americans want?

(2) Capping salaries to medical professionals will reduce the skill and expertise of medical practitioners, let alone the number of candidates who seek a medical career. Is dumbing down the medical profession the change Americans hope for?

There is a program called "Sorry Works!" that is at least a step in the right direction for litigation. It can allow the medical professionals to say sorry, the paitent to accept, and even compensation for injuries without lawyers.

Such a system could be a plus to not only the medical field, but to any area, by removing the adverserial enviornment and moving it to a more humane environment for everyone.

There may still be a need for tort cases, but perhaps the need for them could be cut.

As an optometrist in private practice, I deal with Medicare, medical insurance, and vision plans on a daily basis. I know full well that parts of the system need to be fixed. But the current bills seem to be throwing the good out with the bad. We don't need to revamp the entire system, and we don't need to do it all at once.

For example, I have owned a Catastrophic Health Care Plan through Carefirst for over 30 years. It has a $50,000 deductible and protects my family from losing everything in case of medical bills that are greater than my health insurance will cover. It costs me about $100 per year. The government could insure every American with this plan so everyone would have that financial safety net. If my math is correct, the insurance companies would receive $30 billion dollars in premiums. In return, they must insure every American regardless of employment status or health history. Premiums would be based on a percentage of income.

With this idea, all citizens have a safety net and health insurance at a fraction of the cost of the current proposals.

One more idea: Why couldn't the federal government underwrite more of the pharmaceutical industry's R and D in return for lower drug prices?

Mr. Hancock, you seem to agree with insurance and tobacco companies that people who need expensive medical care are drags on the economy. Two years ago I was diagnosed with invasive breast cancer and received costly care--however, I make about $60,000 per year and was able to continue working during treatment. If I had died, my contribution to the economy would have been lost.

It is the unintended consequences that scare people. No, death panels are not named in the bill, but with people (you) thinking like this: "But holding out either policy change as a solution to medical inflation only delays the day we tackle the real and much tougher problem: wasteful spending on people who are already sick.", they may not be that far away!!!

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.

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