“It’s just wrong to have life-and-death medical decisions made by bean counters at HMOs, who don’t have a license to practice medicine and don’t have a right to play God. It’s time to take the medical decisions away from the HMOs and insurance companies and give them back to the doctors and the nurses and the health care professionals.”
Thank you Al!
When I pointed out some of the silly rhetoric spouted at the Republican Convention, I promised to do the same for the Democrats. But then I felt a few twinges of fear. What if the leaders of my party left me stranded by eschewing nonsense and meaningless populism?
But how could I have doubted them? As soon as I heard Al Gore’s acceptance speech it was clear that he had come through in the clinch.
Rhetoric about “bean counters at HMOs” making “life-and-death decisions” isn’t unique to Al Gore. Many other politicians spout the same nonsense. You may also hear it from some physicians who work for HMOs.
Unfortunately, this sort of hot air obscures, rather than clarifies, the sort of reasoned discussion that will have to take place if we really want fairer and more effective health care in our country.
To start with, in virtually all HMOs, for-profit as well as nonprofit, the standards and criteria for covered treatments are established by committees of physicians. They work with accountants and other non-physician managers in tailoring covered benefits to a particular plan and enrollment cost.
But these standards are not arbitrarily set by “bean counters.” Remember that whether they are for-profit or nonprofit entities, HMOs and traditional insurance plans compete with each other for business. Any enterprise whose costs grow out of proportion to its fees will eventually go out of business.
Most people would like to have all the medical treatment that they desire or their doctor recommends. Most people would like to pay as little as possible for this treatment and are pleased if their employer or government bears the cost.
Most physicians would like to be able to give their patients any treatment that they think would result in better health or in some desired outcome, such as conceiving a child. And they expect to receive their “usual, customary and reasonable” income for doing so.
This would all be possible in a world where resources are not scarce. Unfortunately, in the real world, resources are always scarce. So choices have to be made. That is the “no free lunch” assumption that underpins all economics.
If health care consumers face little or none of the cost of treatment, the quantity of treatment that they demand will be very large. As long as medicine was limited to relatively simple procedures, medicines and devices, the cost of most care was not necessarily extreme.
But with the scientific advances of recent decades, huge amounts of money can be spent on achieving conception, saving the life of very premature babies, replacing joints, transplanting organs and a host of other treatments. Costs can be enormous.
For centuries health care was rationed, as other goods were, by price. If you could afford it and thought it worthwhile, you got treatment. If you could not afford it or did not judge it to be worthwhile, you did not got treatment.
For the indigent, there was minimal treatment at a county or city hospital. This rationing method dominated health care in the U.S. until the last 40 years and still is the rule for some in the population.
Health insurance equalized the risk across many households, and when adopted by large employers during World War II to sidestep government wage controls, established the precedent of employer payment. But just because the employer writes out the check for most of the coverage does not mean that most of the cost does not come out of employees’ pockets.
While many European governments implemented socialized medicine plans of one type or another by 1950, the United States did not pursue this alternative until Medicare was introduced in 1965. Even then it was limited to retirees and others eligible for Social Security and followed an insurance reimbursement of private providers model rather than the government enterprise model of European socialism.
European socialized medicine rationed care by administrative fiat or by queuing. That is, when resources were not available to immediately provide treatment, patients had to wait long periods for non-critical care.
We are always going to face hard choices on how many resources we will devote to health care, on what will be covered and on what will not.
We can force HMOs to supply any treatment that consumers demand without limitation by “bean counters.” But the bill will be large, and someone will have to pay for it. Only the terminally deluded believe that it will come out of HMO profits or the profits of the employers who pick up the tab for health plans. Most will, in effect, come out of the paycheck of covered employees.
As Senator Byrd might say “don’t charge you, don’t charge me, charge the HMO behind the tree.” That this can be accomplished is as asinine an assumption in health care funding as it is in taxation.
There are many things that could be improved in U.S. health care. But the proposals Al Gore has made to date are only populist posturing that would do nothing fundamental to make the system more fair or more safe.
© 2000 Edward Lotterman
Chanarambie Consulting, Inc.