I'm James Maxey, the author of numerous novels of fantasy and science fiction. I use this site to discuss a wide range of topics, with a heavy emphasis on cranky, uninformed rants about politics and religion and other topics that polite people attempt to avoid. For anyone just wanting to read about my books, I maintain a second blog, The Prophet and the Dragon, where I keep the focus solely on my fiction. I also have a webpage where both blogs stream, with more information about all my books, at jamesmaxey.net.


Tuesday, August 04, 2009

Health Care Reform

I'm more than a little conflicted on the issue of health care reform. Seldom has an issue presented such a contradiction between my philosophical principles and my actual practical needs.

Philosophically, I'm a free-market kind of guy. I view most government intervention with a fair amount of skepticism. On my purely libertarian principles, I'm rooting for the failure of the health care bills now winding their way through congress. I can't help but think that the bills are going to increase costs for everyone by slapping on new layers of regulations, beaurocracy, and taxes, and actually decrease the amount of health care that gets delivered by creating new paperwork. I don't even need to know that actual details of the bills (since, right now, no one knows the actual details of the bills) to have a gut level instinct that this is going to be a disaster.

Practically, however, I'm keenly aware of how badly the status quo sucks. I would love to quit my job and make a go at living off writing alone. That might seem insane to some; after all, right now, I don't have any future books under contract. But, I have confidence that, when I write books, I can sell them. And, I also think I'd write a LOT more books if I didn't have my current job. And, I've lived my life with at least a modest amount of financial responsibility. When I add up my assets of savings and property, they exceed my debts by a respectable margin. If I add in all future moneys contractually owed from writing (at least seven more checks still owed from foreign sales, plus an open-ended amount from earning out on Bitterwood) I think I could manage most normal expenses, keeping a roof over my head, food in my belly, and clothes on my back.

And then there's health insurance. This is where the dream smacks into a brick wall of reality. I was very, very happy two weeks ago to discover I don't have diabetes. I hadn't had blood work done in a couple of years, and I was worried; both grandfathers were diabetic, my father is diabetic, a younger sister is diabetic, and it just felt certain that the blood work was going to come back with bad news, even though I don't have any symptoms.

Now, as bad as actually having the disease might be, I'm pretty sure I'd have the discipline to manage it. My real fear comes not from the disease, but from the financial consequences: I have friends with diabetes, and those who can get health insurance privately pay dearly for it: $2000 on month for one guy I know. $2000 a month is more than I currently pay for all my bills combined, including my mortgage. If this amount were tax deductible, it would still probably wreck my dream of leaving my job, but at least I'd have a shot. But, of course, private insurance isn't tax deductible--but if your employer provides insurance, they do get a tax deduction, and you pay no taxes on the benefit itself. The system is weighted to provide a strong incentive for people to remain employed by corporations, and a disincentive to work for yourself.

Of course, I do have the choice of not buying health insurance. In an ordinary year, I doubt my health expenses total $1000. My lifetime total medical expenses probably don't exceed $20,000. But, I'm 45. Every year that passes brings the looming promise that one day I will develop something that blows this figure out of the water. Cancer, heart disease, or some severe traumatic accident could wipe out everything I own and then some in a matter of weeks.

It feels fundamentally unfair that an essentially random event like cancer or getting t-boned in my car would would incur a debt greater than the value of my house. It feels equally unfair that the system is rigged so that, if I stay at a job I don't enjoy, I'm protected from this danger for only a few hundred dollars a month, tax free, but if I go it alone, the cost is suddenly ten times greater.

One could argue, accurately, that government regulation has helped create this unfairness. They've designed the tax incentives for employers to provide health care, and have imposed regulations that prevent insurance companies from charging different rates for employer based health care based on risk. If you're a 25 year old vegetarian marathon runner who works for Fedex, you pay the same rates as a 55 year old chain smoking couch potato in the same job. Since they can't legally charge the chain smoking couch potato more under current law regulating employer health care, they wind up charging their customers who aren't protected by regulations; i.e., me, should I choose to live off writing alone.

The reality is, as much as I dread government meddling in the free market, they've already meddled, and the current existing system is a Kafkaesque nightmare. It works for some people; for others its nothing but a drain of finances and energy. It's bad enough to get cancer. But to expect someone on chemo to try to understand the labyrinthine hospital bills that arrive side by side with insurance statements is just cruel.

How do we fix this? Those who tell you there is no problem with our current system are living in a different reality than I am. Those who tell you that the phone book sized bills floating around in various government committees right now are the fix are dreaming.

I think I could reform health care with a series of laws that could be written on 3x5 cards. Vote on each individually, rather than lumping everything together to pass or fall in unison. Target specific problems rather than trying to grab 1/7th of the US economy and attempt to rework it from the ground up.

1. Make private insurance tax deductable. If my employer gets a tax break for providing me coverage, I can't figure out what the argument is that justifies that I shouldn't get the same tax break if I'm self employed.

2. End the practice of rescission of health insurance for unrelated conditions. If you saw the Micheal Moore film "Sicko," you'll know what I'm talking about. It's probably the single most loathesome practice of the insurance industry. You go along for years, believing you have insurance, paying your premiums, and then one day you get cancer. The bills roll in. And, suddenly, your insurance company drops you. It seems they recently reviewed your application and discovered that you didn't report acne treatments you recieved when you were 19 in your medical history, so, sorry, but we're revoking your policy. The insurance company recently pointed out that only about 1% of their customers experience rescission. This is still tens of thousands of people each year, I'm betting that there are no healthy customers among this 1%. Now, I don't think that insurance companies should be open to fraud; there are people who will hide actual expensive conditions, and they should have the right to somehow penalize people who fraudulently apply for care. But, the simple solution here would be that all rescission decisions would have to be made within 90 days of applying for a policy. Let them check you out when you first apply. What's unfair is to keep you as a customer for years, even decades, then drop you the first time you get sick.

3. End the billing disparities between the insured and the uninsured for medical care. I once had a blood test for allergies. I got the bill afterward and discover the test cost SIX THOUSAND DOLLARS! It seems like something a doctor might mention when he orders the test. "We might be able to figure out the source of your sniffles with this simple test," says the doctor. "Great!" says the patient. "Oh, and the test cost six thousand dollars." "You know, my sniffles aren't all that bad," says the patient. However, the test didn't really cost $6000. Since I had insurance, there was a "negotiate rate," and the test actually only cost $1200. Insurance would pay 900, I'd pay 300. I did so, but couldn't help but wonder why a poor guy without insurance was going to be charged 5 times as much. But, this isn't some wierd anomoly: Look at your own bills. There's one rate for the uninsured, and a different one for the insured, and the insured rate is less. The logic baffles me. Why should the same service cost different people different prices? If the test can be provided for $1200 to the insured, it should be provided for $1200 to the uninsured. Am I crazy in thinking this? What am I missing?

Okay, I could probably go on to list at least ten more things that are unfair in our current system, but it's time for me to do some work on an actual novel now. But I know that at least some of my readers consider themselves libertarians, while others are conservatives. Can anyone tell me why the government should do absolutely nothing to reform our current system? Can you explain why these things I'm griping about aren't unfair?


Loren Eaton said...

The reality is, as much as I dread government meddling in the free market, they've already meddled, and the current existing system is a Kafkaesque nightmare.

Yes. Allow me to offer my father's most-recent Medicare statement as an example. On July 17, 2009, Medicare acknowledged that a doctor had billed them $75 for an electrocardiogram. They approved $8.76 of the bill and actually paid $7.01. Dad's on the hook for $1.75. Oh, by the way, the electrocardiogram was conducted July 30, 2008. There's efficiency for you.

My wife's radical view is that we need to abolish all health insurance but major medical and allow market forces to bring down prices that are currently artificially inflated for billing purposes. I don't think that'll ever happen, though.

Lazy Bike Commuter said...

Based on when I worked at a doctor's office, I have two theories about why medical care costs so much for self-pay individuals:

1: They never expect you to pay it so they get a tax write off
2: It gives them a better bargaining position with insurance companies

Last year during the three month period when I had no insurance when I changed jobs, I naturally contracted appendicitis ad had to have my appendix removed. Total charges were about $42k, $39k of that being from the hospital itself.

The hospital had me fill out a "financial assistance" form and reduced their bill to $15k, or about half my annual salary, but they also dictated that I must pay them $258 a month and no less.

Now I've somehow gotten the other 3K paid off, though in talking to my current insurance company, all the providers said that they would have lowered the bills by about 40% if I had known how to negotiate, but they will not do so retroactively.

That being said...I see no good coming from a government-run system. How does the government propose to save money on healthcare? They pay doctors less. Not just a little less....$250 for an MRI vs $1200 from ins 0r $3000 from a private payer. The doctor begins to lose money.

The office where I worked seriously considered dropping Medicaid because accepting the meager payments was costing way more money than it was worth.

Medical bills suck, but it's ultimately my fault for choosing not to participate in COBRA--I thought $1200 for 3 months was too much since I never get sick anyway. This is why I never go to Vegas.

On top of eeverything else....I can't think of a single program that is run by the government that is run WELL, or that I would choose to be in charge of my life.

James Maxey said...

Loren, LBC, thanks for contributing with examples. Medicare is basically a take it or leave it proposition for doctors. It can get away with paying less than 10 bucks for an EKG not because it's a fair price, but because the government gets the power to decide what it will pay, end of discussion. I don't have any magical powers to know what the true value of an EKG is, but eight bucks feels a bit low. I can leave tips bigger than that when I eat out.

The reality is, if doctors are force to make less than a service is worth from some patients, then they will try to make up the lost revenue by charging others more than the service is worth. I sometimes hear a discussion about American drug prices as compared to what they cost in Cuba, or Canada, or the UK. A drug that's $20 a pill here sells in Canada for $.25 a pill, let's say. But, in Canada, the government is the only buyer, so it sets the cost. A drug company has to accept the lower rate, but it's not a problem: They can make up for the lost profits by charging more for the drug in the US. In this fashion, US consumers are subsidising lower drug prices world wide.

Still, as many horrors as I can evoke of what happens when the government meddles in business, I also have to admit that our current system just sucks. It's too complex, too expensive, and too petty, for lack of a more accurate term. I fear government beaurocracy, but I've also had to deal with corporate beaurocracy, and can't say that I find it any more pleasant or logic based.

I guess, if I could invoke my science fiction imagination, what I'd most desire is transparency and clarity. When I shop online, I get a menu of options and explanations of the prices. Things are pretty simple. Why isn't there some sort of internet medical service where I can compare prices among different providers? True story: Just last month, I went to a doctor for a check up, and while I was there we were discussing a large skin tag on my eyelid. The little flap of skin was harmless, but it was positioned so that it hung over my eyelid; it wasn't blocking my sight, but it was big enough that, if I tried to see it, I could. I asked how much it would cost to have it removed. She told me she didn't know, but agreed that it made sense to remove it. It wasn't just cosmetic; if it got any bigger, it would start interfering with my vision. So, she lopped it off.

I got the bill today. $175, negotiated down by the insurance company to about $90. Neither amount seems horrible for what was esentially minor surgury (if something that doesn't even require stitches in the aftermath can be called surgury). Still, it seems odd that the doctor just didn't know what it would cost. Couldn't a doctor carry a PDA linked to a database that would report the prices of the various tests she orders or drugs she prescribes? If I'm getting my car repaired, I can get competing quotes and a range of options, such a lowering the cost with rebuilt parts. Why is it that we are expected to make our health care decisions in absolute blindness when it comes to cost?

Drakonis said...

If you ever develop a major disease, get out of the US. There are plenty of safe, working techniques for most diseases thought to be incurable IE: Cancer, HIV, AIDS, type 2 Diabetes,and ハンチントン病 (do you have a translation fore this word?). There are many more, so you don't have to worry so long as you can find the right people.


rastronomicals said...

My opinion has always been that while ceding the administration of any service to the government is always going to decrease efficiency and increase waste, there are some instances where private industry just cannot be trusted.

These tend to be in areas that deal with the "common good;" it's to the common good, for example, that we have a national park system. It's to the common good that we have the Food and Drug Administration, or OSHA.

We Americans are often reluctant to bring the government into our lives, but we will recognize the necessity of doing so from time to time.

Except with our health insurance system. There is probably no more obvious yardstick of the "common good" than the health of the commoners, but somehow we haven't gotten this one right yet.

I'm glad I work for a small company. The boss sits in the same room with me, so a face-to-face with the decision-maker if needed is never more than a spare second away. My job security is unquestioned. I have a job here as long as the company is around--and it's not going anywhere. My pay is competitive or a little moreso, and my pension plan is pretty darned good.

But what I don't have is health insurance. I'm not pleased about this, and I buy my boss' arguments about the impossibility of implementing a plan for a five-employee company only to a certain degree. But at the age of 42, and in my good state of health, and most importantly without any local options for employment within my esoteric industry, I am not at the point where I'd even consider quitting my job over the matter.

A couple or three years ago my girlfriend took a new job and was able to get me onto her insurance, but rates for the co-insured increased to the point where we had to drop it about a year ago. It made more sense to pay for the doctor's visits than to pay the premiums . . . .

But it's a scary situation. You and I share the same concerns, Mr. Maxey. We've been OK so far, but we're shortly to enter the time of life when things start to break down 'n' need fixin'.

So if you're me, and you hear the brouahaha over Obama's health plan, what would you think?

Would you be getting in line with the wingnuts to disrupt the townhalls, or would you figure that whatever Obama comes up with, you'll be better off than with the nothing you currently have?

Yes, it does appear that Obama and the Dems are a little hazy on the details right now. But the Republican objections appear to be nothing more than ideological marching orders.

I'll go with the intelligent guy who's recognizing a problem and is trying to fix it, expecially since there's just about no way he could screw things up so bad that the crappy way things things are for me right now in this regard will end up being worse.

James Maxey said...

Ras, thanks for contributing to the debate. I think you've summed up the pro "let's do something" argument really well. But, I think you're being a little too peaceful about the "hazy details." Sitting back and trusting the congress to do something wise and good isn't something I'm comfortable doing. I don't want a plan sold by identifying problems, but leaving the solutions fuzzy until the last seconds before the vote. Because, I do think there are many, many worse things in the world than winding up with congress producing no legislation. I wouldn't want a health care plan that increases the deficit by even a dime, for instance. And, while I understand the logic behind them, I dislike any legislation that might produce an individual mandate to buy health insurance. You say you don't have any: What if the law suddenly says you have to purchase it, and, if you don't, the government will fine you? What if you work of a 5 employee company, and the bill establishes that all companies with 5 employees or more have to provide health insurance, and your boss suddenly says, "Hmm... guess I have to lose an employee." These are hypotheticals, of course. The reality is, no one knows what the details of the plans are that we, the voters, are being asked to support.

Obama could nip this in the bud by drawing the house and senate leadership into his office and saying, "Here's my plan. Here are the details. Go out and sell it." Instead, he's let congress write the plans, and they haven't, you know, actually locked down anything six months into the new administration.

If this is a good plan, then it seems like the President would want to publish it and discuss the benefits and defend and explain the details. Instead, there is only a discussion of vague "principals." Opponents get asked, "What, you don't think there's a problem?" I think there's a problem. I think there is a HUGE problem. I think there's a problem that we ignore at our peril. But, I won't support simply "doing something." A very solid majority of Americans are happy with what they have at the moment, health-care-wise. I'm not among their number. But I don't want the government disrupting their lives just so my life might get a little easier.