The Minnesota 17% uninsured crisis

You are reading this because the headline got your attention. You think you know that Minnesota does not have a 17% uninsured rate. In fact, you know that Minnesotans without health insurance, according to a 2007 Minnesota Department of Health, amounts to about 7.2 percent of the population.

So what’s with this 17% thing?

Minnesota law mandates that everyone who drives a car must have auto insurance. We have an auto insurance crisis in Minnesota, with somewhere near 17% driving without insurance. This far exceeds the state’s health uninsurance rate.

Car insurance is mandated by law. Health insurance is voluntary (for now). And yet, the health uninsurance rate is far below the auto uninsurance rate.

While pointing these facts out during a presentation several weeks ago, I think I found the real answer. Please, no one tell the politicians what I am about to suggest.

Employer-based insurance

A disclaimer is required. What I am about to say is written with my tongue planted firmly in my cheek, but I am saying it for a profound purpose:

What if governments allowed employers to provide auto insurance for their employees, and then gave employers the right to deduct that insurance expense? If auto insurance was a regular employer benefit, would the rate of uninsurance still be at 17%? Or would it be more like, say, 7.2%?

While I am not suggesting that auto insurance be made an employee benefit, I am saying this, and I hope, saying it clearly: One of the key reasons that our uninsurance rate in Minnesota is only at 7.2% is because employers provide health insurance.

Let me say it another way: If employers did not provide health insurance, our health insurance uninsured rate would probably be at 17%, or more, even if the state mandated it.

Let’s be clear about this idea that individual health insurance is the best way to go: It may be, but it carries with it the very real potential of driving up the uninsurance rate. With or without a legislative mandate requiring the purchase of health insurance, there is no doubt whatsoever that uninsurance rates would climb.

I share this because of my political crystal ball. Those who prefer a government-managed, single-payer system seize on the uninsurance rate to justify it. Why would any sane, market-oriented person want to give them more ammunition for their argument?

The best answer is to maintain choice. Let employers decide, as they do now, whether to provide group insurance and in what form they will or will not provide it. That is a free market.

"Unaffordable co-pays"

Recently, I ate lunch with a group of Michigan health insurance agents. Earlier that morning, they had endured my talk, “Arming Agents for Health Care Reform.”

Table talk turned to the plausibility of employees choosing high deductible health plans (HDHPs) over traditional HMO or PPO (networked) health plans.

Then the talk turned to unions, and their contracted health plan designs.

“So the UAW fought the automakers over a $5.00 co-pay,” I said, “saying they feared it would grow to $20.00.” I shook my head in disbelief.

“I’ve got groups with $2.00 co-pays!” one agent said, referring to a public school teachers’ group she serviced. “Try talking to them about HDHPs, HSAs and anything that costs them out of pocket.” Actually, I would like to, but that’s another story.

Going to a Tigers’ game

The teacher and her electrician husband drive two hours to Detroit for a Tigers’ ball game. They hand the parking attendant $15, and walk to the park, handing the ticket-taker a pair of $35 seats.

They have a great time. The Tigers even win.

He drinks three beers at $7.00 each; she sticks with diet Cokes at $5.50 each. They eat three hot dogs each, at $5.00, and share an order of nachos with cheese - $7.00.
After the game, they walk down the street, and pop into a restaurant for a leisurely dinner, spending $49.50, plus a tip.

On the way home, the wife begins feeling faint, turns pale, and throws up (thankfully, she had saved the plastic souvenir Coke cup). Her stomach starts cramping up, and she feels rotten. Since it came on fast, they pull off at the first sign saying “hospital” and head to an emergency room.

“Okay,” the admission’s clerk says to the husband, while his wife lay in an ER bed, “all I need is your $50 co-pay, and we’re set.”

“I thought it was $25,” he protests.

“It is, but only in a hospital in your insurance plans’ network,” she explains.

“Hey, this is about my wife’s health!” he exclaims. “I don’t get it. Why should we have to pay anything?” He launches into a rant about greedy insurance companies and selfish employers as he reaches for his credit card.

“This is just unfair, and who can afford it anyway?”

Indeed.

Health care and police forces

Recently, a socialist argued that great countries have learned they must assign certain duties to governments, and among these is the responsibility to administer and pay for health care. The socialist argued that after all, governments already use national schemes to provide many basic services, and named armies and police forces as examples: Why not also administer health care?

He could have mentioned that governments also build and manage the interstate highway system, waterways, forests, water purification, and any number of other such entities. (Of course, there is that inconvenient fact of a bridge falling down last August 1 in Minneapolis.) Whether it is best for us to have assigned these duties to governments is an argument for another time. I prefer to unpack the idea of police forces for our socialist friends to ponder.

Policing, at the beginning of our nation, was not a government duty; it was a private duty. That notion fell victim to dense population centers and a sense of desire for more security. Few but the most extreme libertarians would argue against government-provided police forces, sheriffs, U.S. marshals, the FBI, and such.
Our socialist friend asserted that police forces provide a level of proof that a national, single payer health system makes plenty of sense. Since governments run this essential service that serves a common good, all services that serve a common good could or might be nationalized (or governmentized).

What do police officers do, where do they do it, and who pays their bills? Moreover, do they do it alone?

Where’s that peacekeeper while someone is burgling your home?

Police offers have sometimes been labeled peace officers; nothing could be further from the truth. While the presence of a police officer, or a squad car, might have the effect of reducing crime while there is a police presence, there are far too few police officers to actually keep the peace.

The primary duty of police officers is to come along after a crime has been committed, to search out and find the criminals, and remove them from the population. Seldom can one call a police officer before a crime is committed in order to get that officer’s protection from the crime. There are two plain reasons for this: First, one has no sure knowledge that a crime will be committed, and therefore, cannot call for a police officer in advance. And two, there are not nearly enough police officers to assign each one a peacekeeping role.

Police officers are to public order what emergency rooms and specialist physicians are to health care. They are on call and ready to help, as long as not too many crimes are committed at the same time in nearby jurisdictions. When there is an outbreak of crime, its victims must wait for hours before the squad car shows, and by then, the criminal has long since left the scene and the victim’s bloody wounds have become the concern of a local medical emergency room.

Of greater importance is the simple fact that government police forces only provide a small fraction of the peacekeeping required to maintain social order. The primary role of peacekeeper is borne by hundreds of thousands of private security workers. They guard buildings, act as bodyguards, ferry millions of dollars in armored cars, secure routes for superstars and politicians, patrol shopping malls, and keep an eye on communities. These peacekeeping guards are more like our system of private physicians that provide health care services to almost all Americans. They are outside the government system, except for the likely requirement for a license, and by such, a certain form of proof of competence.

Government-paid police forces are augmented by a vast army of private sector “police officers” who serve as the nation’s peacekeepers. To suggest that police forces are an example of a common good being met in any comprehensive fashion by governments is facetious and shortsighted; and it is untrue.

(The same argument could be extended to our justice system, relying as it does on hundreds of thousands of private legal practitioners (lawyers) to carry the primary burden of ensuring justice for their clients. Americans agreed that the government should provide a justice system, but lays very little of its duties on government agencies; rather, relying on a contract system most often the result of negotiations between armies of lawyers in private practice.)

There is one other significant characteristic of police forces to consider: They are almost all locally controlled, by small town boards, city councils, county boards, or state legislators. They are not national “single policing” organizations. Policing is a local issue.

Neither is the administration of health care a national issue; it is a local issue, and serves the needs of communities and populations that hardly resemble each other in lifestyles, ethnicities, racial compensation, traditions, wealth (or lack of it), and in untold other nuanced differences. People are different in different places, and it would be a sorry place to live that tried to force them to all live and look alike.

Thanks to the U.S.

The United States, much to the chagrin of liberals and socialists, has the world’s most powerful military force. One might argue that it is too large and too strong given the relative lack of attacks on the United States, but such an argument is extremely shortsighted and naïve. The fact that we have sustained so few attacks is testimony to our military strength; but I add this for a more important reason.

Were it not for the strength of the U.S. military, most foreign nations would be forced to spend billions more on defense, and on building their own military forces. If the United States pulled out of Iraq, Afghanistan, Germany, Japan, and all other foreign military bases, does the liberal and socialist assume that those nations would be comfortable with the void such a withdrawal would create? Such naïve thoughts seem even beyond their pale.

Suppose, however, that the U.S. drew down its military force to the handful that liberals and socialists seem to desire, thereby saving our country $300-400 billion or more each year (and spend it on health care and education). If such a thing were to happen, would Canada and Mexico feel as secure as they do today, or would they be forced to spend tens of billions to build their own military forces for the sake of security? I think the former is most likely, and if Canada built a national military force powerful enough to provide such protection, the money would have to come from its citizens, and would further strap their health system with shortages heretofore unthinkable. It is arguable, in fact, that the strength of the United States’ military helps Canada in its attempts to provide a government-run health system.

If the United States was not the home to 80 percent of the world’s pharmaceutical research, medical device research, and medical entrepreneurism, the health care systems of most foreign nations would be hard strapped to create medical innovations, much less provide necessary daily health services through their government-run plans.

For the United States is the world’s medicine cabinet, and its police force.

Can you believe a fat preacher?

Lecturing and writing on the virtues of free market health care, while personally clinging to a traditional HMO-style health plan, is a lot like the preacher preaching moderation. Isn’t it?

Nothing is more obviously disconcerting than watching a size 54 preacher pound the pulpit while shouting, “And these excesses will damn you to hell, people!” Well, I say, “What’s good for the pew-sitters is good for the pulpit-pounder.

So it is with agents, academics, providers, payers, lobbyists, lecturers and speakers who tread throughout America, selling, describing, desiring, designing, leveraging, and talking about consumer-driven health care. If you believe it, live it, I say.

Rosanne (my wife) and I own a $5,650 deductible plan with an HSA that will be fully funded by the end of the year, and into which we have had to dip twice so far. Our only regret is that we do not have a $10,000 deductible plan with the consummate HSA feature still available. The fact is, however, that we would still own a high deductible health plan, because we not only talk and write about it, we believe it.

We believe in consumer-driven health care because we believe in the superiority of free markets, and even more so, the superiority of liberty. My passion for this issue stems from belief, not from recognizing that I can gain something from the current debate over health reform.

Recently, for instance, I learned something disturbing about a major conservative think tank that advocates for free market health care. Essentially, none of them “walk the talk,” but instead, cling to their low-deductible plans, and by their actions, endorsing the entitlement mentality – it’s hard to pay attention to what they write.

When a fat preacher tells me to lose weight, the only weight lost is when I leave his church.

Perhaps the first thing we should do when confronted by a health reformer is ask the question, “What kind of health plan do you have?” At least we’d know whether to consider leaving the church, or just be skeptical of their conviction.

What do you think? How do you feel about this?

Sick people are the problem, apparently

Jon Herring writes in the eNewsletter "Early to Rise" (Tuesday, August 14, 2007) about the U.S. health care system (www.earlytorise.com). The bizarre movie, “Sicko,” prompted Herring’s piece. He praises Moore for illustrating what’s wrong with the U.S. health care system, but disagrees with Moore’s solution. Moore, of course, wants more government care, while shutting down a market-based system.

Herring, however, goes on to repeat yet another tired mantra: He says that what’s wrong with the health care system is that it’s geared to treating sickness. Well, as my children used to say, “duh!”

Herring, quite properly and effectively stresses good health as the best antidote to what ails the health care system. In this, he joins the other billions of people on the planet who have common sense. If all of us took better care of ourselves, we will need less medical treatment, fewer prescription medicines, and perhaps, will avoid artificial organs and other medical devices. No one can fault him for that logic: Its just lacks scope.

Imagine yourself after a lifetime of good diet, vigorous exercise, low stress, and a lot of rest, lying in a hospital dying of nothing. Everyone dies. Everyone dies from something (two incontrovertible laws). And accidents happen, as do communicable diseases. People get sick. People suffer.

The U.S. health care system exists for these specific purposes: to reduce pain and suffering, and to extend human life. In its truest sense, then, its purpose for existing is to treat sick and hurting people.

Herring, and others like him, want a health care system that cares for healthy people, investing more heavily in preventive medicine. Preventive medicine is cheap to provide, except when it discovers a previously-hidden chronic illness, or a benign fatty tumor that results in surgery. Then it can lead to pricy, life-saving treatments.

We can all advocate for good health. We can even shape up our own bodies. We can buy all the preventive health care services imaginable. But in the real world, we still need a health care system to treat sick people, and treating sick people costs a lot of money - a lot more than not treating healthy people.

One last point about Jon Herring’s harangue: He writes, “But don’t expect changes in this broken system. The drug companies like it just fine the way it is…” Beware the salesman who must blame others in order to sell his products, as does Jon Herring. It's just plain dumb to accuse pharmaceutical companies of wanting people to be sick. That's like blaming gas stations for selling gas to people with empty gas tanks.

The fact is that if we are to force the health care system to change in positive ways, it will take the combined efforts of millions of Americans engaging in the purchase of health care services. It would also help immensely if those millions of health care consumers lost weight, quit smoking, drank less, ate healthier, and walked every day.

Single Payer and Nurse Shortages

Nurses are pitching universal health care. By that, they mean that we should move toward a single payer health care system. They want this because they believe there is a nurse shortage: About this, they are right, and it will get worse, especially with government run health systems.

Now I know that rank and file union nurses are smart people. They have to be to make it through all that training. Of course, all smart people are ignorant about some things, like politics and economics. That’s why they rely on their union leaders to make good decisions for them. So I excuse the rank and file from my criticism here.

The U.S. spends about 16 percent of its Gross Domestic Product (GDP) on health care. A good deal of that goes to health professionals, like physicians and nurses. By contrast, Canada spends about 10 percent of its GDP on health care.

Of that 16 percent, 45 percent is paid by government programs, and 55 percent by private insurance, and out of pocket payments. Or, it could be stated this way: About 7.2 percent of GDP is spent by governments to provide health care services (for 25 percent of the population), while 8.8 percent is spent by private insurance companies and people paying out of pocket.

Very few Americans feel undertaxed. Government health care is paid from tax revenue. In most Canadian provinces, health care spending already reaches 47 percent of all provincial tax revenue; plus the national government tosses in billions more.

If the U.S. decided to move to a government-run, universal health care system, the dollars available through tax resources would be less than are available today. That is, unless governments are prepared to raise tax rates by astronomical margins, or cut other vital programs to the bones – like bridge repair, for instance.

The end result of government-run, single payer health care is this: There will be fewer nurses than today, not more. Unless government health managers decide to dump physicians and replace them with less expensive nurses to deliver health care, and that, my friends, is not a step in the right direction.

Nurses, of all people, should be pushing to reduce the government’s role in health care (and I didn’t even touch on the low, low reimbursement rates they now receive, the rates that make it less possible to employ more nurses).

Nurses, work on your skills. Carve out a niche in an emerging, free market health care system.

Why ask the president to solve health care's problems?

Several months ago, in an article about the U.S. health care “crisis,” The Economist asked the question, “…what is President Bush going to do about it.” My immediate response was, “Why is it even his business?”
Providing and paying for health care ought to be a local and personal issue, not one in which the federal government plays a central role. It is the idea that the federal government had to solve health care crises that got us into this mess.
That, however, is not the thrust of this message. Rather, it has to do with the questions surrounding health care. Should our focus be to:

1. Reduce overall health care spending? And if so, is that in real dollars, or a percentage of GDP, or both?
2. Or is this about reducing per capita health care spending in wealthy states, while increasing it in less wealthy states? Or cities? Or neighborhoods?
3. Increase access to all health care services for everyone? Or about reducing services for some, so that others can have what they now lack?
4. Reduce the rate of those without health insurance to zero? Or those without someone else paying for their health care to zero?

Whichever question moves to the top of the list will leave the others unresolved. For instance, if our overall goal is to reduce health care spending, while maintaining access for everyone to quality health services on an equal basis (sounds like single-payer to me), then we will not accomplish any of those goals.
If we squeeze provider reimbursements believing it will reduce spending, it will also reduce the supply of providers. Many will quit.
If we open the floodgates so that everyone can have everything, it will send health care spending through the roof.
Try taking services away from Hollywood, California and give them to Hayward, Wisconsin.
I believe that the best way to get a handle on this is not to look to Washington, D.C., but look to Washington Street, Lane, Avenue, Blvd., Way, Court, or on any other street where health consumers live. Put them in charge of their own lives. They are up to it.
The president has far more important issues to tackle than where I get my next blood test, who pays for it.