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April 13, 2011

Mickey Kaus: This Fight Is Between the "Rationers" and the "Treaters"

I think he's wrong. Not to go all Obama on him, but he's presenting an honest-to-goodness false choice.

But here's his claim-- that the country's dilemma is between "rationing" medical resources and "treating" all illnesses.

First he quotes former Slate colleague Jacob Weisberg offering a Devil's Endorsement of Ryan's plan -- that's a term I just made up, to describe a pretend-endorsement of an opponent's side which is really a slam and an attempt to win points for your own side.


Ryan’s alternative to Medicare hardly seems as terrible as Paul Krugman makes out. Seniors would enter the health care world the rest of us live in, with co-payments, deductibles and managed care. Eventually, cost control would require some tough decisions about end-of-life care and the rationing of high-tech treatments that have limited efficacy. But starting with a value of $15,000 per year, per senior—the amount government now spends on Medicare—Ryan’s vouchers should provide excellent coverage. His change would amount to a minor amendment to the social contract, not a fundamental revision of it.

Ah. Ryan's Plan = Death Panels. And to the extent I'm saying nice things about it, it's only because Ryan's plan exposes the Death Panel charge for the hypocrisy and lie it always was. Take that, cons!!!

Right, Jacob. Sure. I really believe you are on my side on this.

Anyway, Kaus uses this as a jumping-off point for his Rationers/Treaters theory:

That’s why I’m convinced the major fault line in the health care debate in the coming decades won’t be between those who do and don’t want to diminish the government’s role–by, say, replacing the open-ended benefits Medicare recipients now get with a Ryan-style limited subsidy for purchase of health insurance. Sure that’s one debate, and it’s happening now. But the bigger fault line will be the line that is just emerging, between those who want Americans to keep getting whatever health care will make them better–which is more or less Medicare’s current, costly posture–and those who accept some system, whether public or private, that would deny them some treatments because of their expense: The Treaters vs. the Rationers.

Not so. Costs in the medical sector are exploding for a multiplicity of reasons but the major one is the lack of cost discipline -- when very few people who are the end users of the service, and service selectors, are actually paying anything for it, they have absolutely no reason to question the price and no reason to ask for less expensive options.

It is well-known that doctors will give you a discount if you're paying out of pocket... but what they're really doing is overcharging all the people who aren't bothering to check the price.

Furthermore, when there is almost no cost at all for a thing then people will naturally tend to overuse it.

The problem with health insurance is that it's not insurance. This cannot be stated enough times. Health insurance is not insurance. Insurance, by definition, insures you against a small-ish risk. You pay a small-ish amount of money so that should that risk come to pass, you will be insulated against it monetarily (i.e., you'll get an insurance pay-out to cover the huge expenses).

Current health care insurance is not insurance. It is simply your employer paying a third party to pay for all of your medical needs, whether they are a "risk" (catastrophic illness) or a "known, definite, predictable cost, same as weekly costs for food" (eye exams and eye glasses every year, flu shots every winter, check-ups every year, routine arm-breaks and ankle-twists and back-spasm care...).

It is not "rationing" to restructure MediCare such that it is through a private insurer and furthermore that there are co-pays on most items and a decent-sized deductible. (The deductible serves as a risk marker -- the risk to the insurer is that you'll hit your deductible and they'll be on the line for most everything above that; but below that line, you pay for most of your care.) That simply imposes cost-awareness and price-sensitivity and cost-benefit-thinking to an industry which is exploding with costs because for 90% of its consumers such considerations are wholly absent.

A deductible of $5000 may sound like a lot, and sure, it is. But at least below that $5000 level there will be some cost-discipline imposed by the end-user, rather than doctors and hospitals and drug companies making up their own prices because the end user isn't checking, and his actions bind his third-party payor.

And, frankly, anyone above the poverty line has $5000, or could have $5000 in a loan, to cover his medical expenses should he become catastrophically ill.

You're dying and you can't put off buying a newer used car? I think you can.

At any rate, this isn't "rationing." Rationing is the system the Democrats want, which is where we create an illusion that the government is paying for everything, but in reality, we cut costs on the back end by stepping in stealthily and guiding doctors and even patients away from such care options.

It is better to be upfront about these things. If you're catastrophically ill, you'll get everything paid for, above a certain amount. Below that? You have a 55" freakin' inch HDTV and you can't spend $2000 out of pocket on your own health, your own body, your own life?

Really? Is that where we are?

Now, insurance, as I said, is not insurance. It is your employer deciding to give you $5000 in bonus salary but the form of this salary is paying for your standard, routine medical expenses.

But that's what the poor, who don't have insurance, by and large, consider "insurance," and they don't understand that true insurance would not be disguised salary, as what we term as "insurance" now, but catastrophic health insurance.

And for the poorest, we can provide that.

But most of the poor wouldn't end up using that (as most people are fortunate enough not to be seriously ill), so they wouldn't even realize they were so insured, and so, then, most crucially, they wouldn't realize they had their Politician-Benefactors to thank for it.

That's why every goddamn government "insurance" scheme offered always makes sure it covers a large portion of even trivial expenses -- so that the public knows who to thank.

The prescription drug coverage bill made sure it did this. Bizarrely, it covered a lot of low-level drug costs, then created a "donut" for less-subsidized costs for middle-level drug needs, and then covered everything above a high level.

That makes no sense, does it? Cover the minor costs then create a donut in the middle with much less covered costs? Shouldn't it have been structured so that low level costs were born entirely out of pocket, and then middle level costs were covered half, and then high level costs were covered almost completely?

Sure that would have made sense... but too many people would have wound up not getting any government money for their low-level drug costs and so they wouldn't know who to thank.

ObamaCare is like this. They could have set up some kind of catastrophic health insurance plan which would be relatively cheap-ish but would take care of people when they got really sick. But up to that level, you'd pay your own way.

But then the poor people wouldn't even realize that ObamaCare existed (unless they got seriously ill). So of course we have to structure it so that routine check-ups are covered. The peasants need to know which dukes to thank for their munificence.

Same with care for the elderly. There is no reason that comparatively well-off seniors shouldn't be paying their own medical costs up to a certain level. Changes like that would not only save trillions, but bring some cost discipline to a field in dire need of it.

But no, we always have to make sure that as many people as possible are getting a government check as frequently as possible. So everyone knows who just bought their vote.


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posted by Ace at 12:52 PM

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