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The Right’s Story on Health Care

I really hate being put into a position in which I’m defending “the Left”, even more so when my post might be taken as opposing that of my fellow associate blogger Steve Verdon since he and I are in substantial agreement on health care and health care reform.

Here’s how I would characterize “the Right’s” story on health care:

  1. The U. S. system is flawed.
  2. Other countries’ systems don’t work nearly as well.
  3. The U. S. system relies on the free market.
  4. There are two systems of health care in the developed world—ours, and the one every other country uses.

The first proposition is obviously true. The second is shaky: other countries’ systems work better in some ways, worse in others. The third is on the outskirts of Looney-land, heading for town center. The fourth is a baffling over-simplification: every developed country has a health care system with unique features of its own (as one might expect) but the system in the U. S. resembles that of, say, France more than it does the system in the United States 75 years ago.

Notice something about that list? If it’s a fair characterization, “the Left” differs from “the Right” only in its view of the systems of other countries.

Those aren’t scare quotes around the characterizations of political positions above. I’m using quotation marks because I’m quoting other people. The terms “Left” and “Right” refer to sitting positions in the French Legislative Assembly of the early days of the French Revolution and have never been particularly relevant to the United States. Virtually every mainstream politician in the United States is center-right or right wing by, say, French standards. I believe this is a source of confusion to our European cousins who are lead by the use of the terms here to believe that there’s more political diversity here than there actually is. Both our Democratic and Republican parties would fit, from an ideological standpoint, handily into the Tory party in the U. K. with lots of room on the sides.

I am very, very centrist (as Americans use the term). I am what used to be referred to as a “Scoop Jackson” Democrat. I think there are lots of good, freedom-loving, patriotic Democrats and lots of fine, compassionate, caring Republicans. I’m more concerned with outcomes than with counting political coups.

Politically cynical Democrats are promising people that they can get something for nothing. It’s not true. Politically cynical Republicans are warning people that something’s going to be taken away from them. That’s not true, either. Or, more accurately, while there’s a kernel of truth in both positions neither is entirely true.

Like most developed countries we have a hybrid health care system. Some financing is private; some is by the government. The likelihood of our going to a system that is completely public or completely private approaches zero. If your proposal requires a completely public or completely private system to achieve its objectives, make other plans. It ain’t gonna happen.

I think that Democrats are over-estimating the economies that can be realized by achieving universal coverage because, as I’ve noted before, they’re under-estimating the costs of public administration of such a system in the United States and they’re over-estimating the present system’s excess capacity. I think that Republicans are over-estimating the economies that can be realized by compelling people to make more prudent choices about health care (at least not in a manner that’s consistent with reasonable public health). I don’t get two legs put into casts when I break a leg because the insurance company is paying for it nor do I get two heartvalves replaced instead of one. Plus, so long as health care providers are deciding what does and does not need to be done, they’re an important component in the cost equation.

That’s essentially where I come down. I think the real issue on health care in this country is that the costs are too high. Unless you believe that health care providers will be willing to take a pay cut (I don’t) that means that significant savings in health care require a substantial increase in the supply of health care. That’s what we need to think about rather than whether 60% of the costs of health care come from tax dollars or 80% do.

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About Dave Schuler
Over the years Dave Schuler has worked as a martial arts instructor, a handyman, a musician, a cook, and a translator. He's owned his own company for the last thirty years and has a post-graduate degree in his field. He comes from a family of politicians, teachers, and vaudeville entertainers. All-in-all a pretty good preparation for blogging.

Comments

  1. Interesting post. There are a few points, though, that I don’t understand. You note,

    I think that Republicans are over-estimating the economies that can be realized by compelling people to make more prudent choices about health care (at least not in a manner that’s consistent with reasonable public health). I don’t get two legs put into casts when I break a leg because the insurance company is paying for it nor do I get two heart valves replaced instead of one.

    The problem is not that people with broken legs and faulty hearts are getting them fixed, isn’t the problem really that too many people whose legs are not broken and whose hearts are not faulty are running to the doctor? Doesn’t the current system encourage people who are not sick (or not sick enough to require medical attention) to run to the doctor at the first sniffle? Which leads to, among other things, expensive tests by the doctor and unnecessary antibiotics and other medicines? Isn’t the conservative answer (to the extent there is a single conservative answer) designed to (1) engage the consumer more in in his health care by giving him a larger role in paying for it (through such things as Health Savings Accounts) and (2) make health care more portable by not tying your health insurance to your employer (again through HSAs).

    You also write,

    Plus, so long as health care providers are deciding what does and does not need to be done, they’re an important component in the cost equation.

    But isn’t that exactly one of the things the conservative approach tries to address? When consumers are more responsible for the cost of health care, won’t they have an incentive to limit the unnecessary testing that many doctors feel they need to do in order to limit liability?

    Good post. Interesting topic.

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  2. talboito says:

    Politically cynical Democrats are promising people that they can get something for nothing. It’s not true.

    I don’t know about the cynicism smear, but that does not fairly characterize any of the leading Democratic health care proposals.

    While they do have significant differences, each plan details a clear “something for something” similar to what we are paying now.

    You might want to pick the correct house before you go poxing on everyone’s.

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  3. Derrick says:

    Doesn’t the current system encourage people who are not sick (or not sick enough to require medical attention) to run to the doctor at the first sniffle?

    A recent John Hopkins study showed that at most 9% of our excess in health care spending could be attributed to defensive medicine. If you are concerned with rising health care expenditures, the two areas that are the biggest reasons are administrative costs due to the insurance industry and doctors salaries.

    I’m not suggesting that we should begin fixing salaries for doctors but if you look at most of the world, being a doctor is more of a middle class profession than the upper-middle class lifestyle that a large percentage of doctors enjoy. So if your remove salary fixing as an option, you have to do something about the insurance industry, but we know that their lobby is to strong for that to ever occur.

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  4. Steve Plunk says:

    Dave,

    I would certainly characterize myself as right wing but the only one of the four I might agree with is number 2 and that is a very subjective measure. We may view our own system very well but how many of us have tried someone else’s?

    Number one is interesting because the political debate assumes it is flawed, right wing or left wing. The problem is how do say it’s flawed? Costs too much? Doesn’t give care too enough people? No matter how good it has been, is, or ever will be people will always find flaws. So is it really flawed or are we expecting too much?

    Right wingers consider health care much too influenced by government to be free market. We think it should be but know it’s not.

    The last one is portrays us as dolts. We know there are many different systems even within the United States.

    The biggest difference I see between liberals and conservatives is simply how big a role emotions play in health policy discussions. Some wanting to limit emotional appeals while others believe emotion has a valid place at the table with fiscal responsibility and personal responsibility.

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  5. just me says:

    I don’t think the problem is so much salary fixing as it is gatekeeping.

    Doctors run medical schools and the restrict admissions in order to create higher demand. What we need are more doctors to bring down the demand side of the equation.

    And it isn’t that med schools are getting unqualified or incapable candidates applying-there are qualified applicants being turned away all the time.

    This wouldn’t fix everything, but I think it would go a long way towards helping.

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  6. just me says:

    Number one is interesting because the political debate assumes it is flawed, right wing or left wing. The problem is how do say it’s flawed? Costs too much? Doesn’t give care too enough people? No matter how good it has been, is, or ever will be people will always find flaws. So is it really flawed or are we expecting too much?

    This pushes an interesting question. Is it possible to actually have a flawless system? I don’t think it is, there are going to be flaws-I think the real debate is over which flaws people would rather have in their healthcare system.

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  7. Grewgills says:

    Notice something about that list? If it’s a fair characterization, “the Left” differs from “the Right” only in its view of the systems of other countries.

    I think your list and Kling’s are equally fair. That is points 3 and 4 don’t very accurately reflect the actual views of many on either side unless I am drastically overestimating the intelligence of the American people.

    that means that significant savings in health care require a substantial increase in the supply of health care. That’s what we need to think about rather than whether 60% of the costs of health care come from tax dollars or 80% do.

    The answer should be both and, not either or.

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  8. Grewgills says:

    The biggest difference I see between liberals and conservatives is simply how big a role emotions play in health policy discussions. Some wanting to limit emotional appeals while others believe emotion has a valid place at the table with fiscal responsibility and personal responsibility.

    You would be closer to correct if you replaced emotion with compassion.

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  9. There’s an Intersting Discussion About Health Care . . ….

    going on over at James’ place. My favorite part is Dave’s demolishing of the “left/right” construct. Always annoying. (Note to self: decide on this blog’s style for “health care” vs. “healthcare.” And, for crying out loud, pick the latter. “T…

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  10. John VanSickle says:

    Of course costs are rising, and they rise for the same reason that costs rise anywhere: The law of supply and demand.

    Handing out more money for health care increases the number of people who can place demands on the system, causing prices to rise. The mere fact that anyone walking into an emergency room must under law at least be stabilized also increases demand, leading to increase prices.

    Supply is decreasing because the freedom to enter the medical field is restricted by the profession itself for the benefit of its members; those members in turn have been essentially handed over to the tort lawyers for their own selfish enrichment. So supply is lower than it ought.

    To really fix the health care system, the government must stop limiting the supply of medical care and stop increasing the demand for medical care.

    On the supply side, the government can take away the medical profession’s highly unconstitutional privilege of restricting entry into the medical field, and it can institute common-sense tort reform so that doctors are no longer prey for the lawyers.

    On the demand side, the government should identify lifestyle decisions that increase the demand for health care, and refuse to fund health care for anyone making that choice. Smokers, for instance, should be ineligible for any government-funded care for cardio-pulmonary illnesses.

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  11. Michael says:

    The demand problem isn’t that there is too much demand for health care, but that there is too much demand for doctors. The majority of things people see doctors for can be handled just as well by Nurse Practitioners, many thing need nothing more than a well trained nurse or pharmacist. These people don’t get paid nearly as much as doctors, so there won’t be a need for them to take a pay cut, and from what I see there are at least 5-10 times as many nurses as doctors, so the supply is there.

    We can take this even further and train people do diagnose common ailments like ear-infections or strep-throat, set broken bones, or stitch less severe cuts. This model of one size fit’s all is terribly inefficient.

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  12. mannning says:

    Anyone have an idea what it takes financially to get a medical degree, especially at a top university?
    Undergraduate—–$160,000 plus living expenses
    Medical, 3 years–$120,000 plus living expenses
    Internship, 2 year$ 80,000 plus living expenses
    Specialization $ 40,000 plus living expenses

    Bare bones living expenses, married: $30,000/year
    So, about $300,000 for the total period.

    So, in total: $700,000 (give or take a few bucks)

    Average starting wage: maybe: $200,000 at best.
    For nitpickers, median is maybe: $150,000.

    Takes a long time to pay off that loan! Meanwhile, it is hard to live on prestige, buy a home, buy a decent auto, pay your taxes, and live decently.

    Then comes the insurance problem: $50,000 to $100,000 or more per year for malpractice, depending on specialization and area, and not counting personal life insurance.

    You can practice until the age of 60. After that you cannot get malpractice insurance at an affordable rate. So you end up with maybe 32 years of productive time.

    Seems to me one would be saddled with a heavy load for about 20 years, and then have to pay for the kid’s education too, mostly in parallel. Or, you can pass that problem on to them.

    At 60+ you just might be well off, unless someone cuts the rug out from under you and lowers wages and such in some arbitrary manner, thus destroying your 32-year bootstrap plan.

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  13. Grewgills says:

    Anyone have an idea what it takes financially to get a medical degree…Takes a long time to pay off that loan!

    It is certainly expensive, but the indebtedness is a bit less than your numbers would indicate.
    According to the American Association of Medical Colleges’ 2006 report 86% of med school graduates carry debt and the median debt is 119K for public schools and 150K for private schools. A small but significant percentage of students have debt greater than 350K and tuition has been growing rather rapidly.

    Residency is typically paid between 34K and 46K for the first year and increases yearly. Residency for a specialization will earn you an extra few K per year. Fifth year residents are typically making 50-55K. During this period you are generally fed while on duty, parking is paid, and you have pretty good medical insurance.* It is a lot of work for relatively little money, but you shouldn’t be going further in the hole (other than interest on you possibly deferred student loans).

    According the the American Medical Students Association studies have found that total cost per student per year range from 146.5K to 178.6K. Roughly 1/3 of that is instructional expenses and 2/3 educational recourses.

    With federal and state governments looking to make cuts, education budgets for higher education often end up on the chopping block. This exacerbates the already large problem. It is already largely responsible for an over 300% 10 year increase in public medical school tuition. There was a 165% contemporaneous rise in private medical school tuition.

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  14. markm says:

    3 The U. S. system relies on the free market.

    It does?????

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  15. mannning says:

    The AMA left out half of the expenses. They did not account for living expenses, it seems, which, in my post was about $300,000 for the 10 years. Add this back in, and you approach my total without breathing hard. Living on $30,000 a year with a family is a huge challenge, which is only somewhat alleviated with the residency income after 7 years of toil, and the probable birth of several kids. If the wife works, that helps, but what she makes is partially absorbed by babysitting charges, a second auto, and taxes.

    Also not accounted for, or buried in the numbers, it seems, is the help given to med students by parents and others, part-time jobs, and scholarships given to promising students.

    Six of my Son-in-Law’s classmates, however, had debts topping $500k after residency, according to him, and they were obviously desperate to find a good practice to join at a high income. Not all did. This class was for specialty,anesthesiology, so it is perhaps at the higher expense end.

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  16. Grewgills says:

    The AMA left out half of the expenses. They did not account for living expenses,

    The numbers came from the AMSA not the AMA. The first was about how much debt medical students actually graduate with not what the total bill was. That seems to me to be the more relevant number if we are talking about how much they must make to pay for their education. If it cost a million dollars to get a degree, but that was entirely funded by some entity other than the student then the amount they must make to do well is less than if the total cost was 100,000 and the student had to foot the entire bill.

    The numbers given later were costs to the school per student per year. Some combination of tuition and other moneys must pay this if the school it to continue.

    Living on $30,000 a year with a family is a huge challenge,

    34K is on the low end of residency salaries. Still if you break that down by hours likely worked they are getting less than $10/hr.

    The larger problem with having a family at this stage would seem to me the complete lack of time to spend with said family. An 80 hour a week residency seems to me entirely unnecessary to develop good physicians.

    Anesthesiology is among the best paid non-surgeon specializations and requires a longer residency.

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  17. mannning says:

    Thanks for the typo correction.

    We are getting into hypothetical territory here. I consider two cases: 1) the total expenses incurred while getting a medical degree, and the resulting debt; and 2) What the same bright student might have done right out of college with a chem or science degree.

    Both incur the same total expenses for the first four years.

    The college grad could have gone to work immediately at a decent salary, say $70,000 per year, and by the time our med student exited residency, this grad would have banked over $420,000, of which, if he paid himself 10% first, he would have well over $42,000 in savings, and 6 years of a much more comfortable lifestyle (not counting raises). If we plotted it out, hypothetically, the med guy would probably not equalize for another 10 or more years.

    The only conclusion I can draw from this hypothetical is that most people that go into the medical profession sacrifice heavily in a fiscal sense and in a family sense for many, many years, before they reach a comfortable living situation.

    It follows that any limitations put on doctor salaries would have to be phased in over a long time to be somewhat fair to those who committed to the task of getting a med degree and incurred heavy debt to do so, in consideration that in the end they would receive very adequate compensation down the road. Change that possibility, and you will change the number of bright people that elect such a grueling path as well.

    My Son-in-Law had two years of far more than 80 hours a week (more like 100), until the last year of residency, when the rules were changed to limit hours to 80, which he said was a joke because of the ways around the rules that were “discovered”.

    The bottom line for me is that doctor’s salaries might be capped at some very large figure, but we are obligated to see them into a decent living situation by not arbitrarily limiting their income. Or else we are cutting off our noses…

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  18. […] Outside Beltway – Then comes the insurance problem: $50,000 to $100,000 or more per year for malpractice, depending on specialization and area At 60+ you just might be well off, unless someone cuts the rug out from under you and lowers wages and such in some Cheap Area Rug News […]

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  19. Grewgills says:

    The college grad could have gone to work immediately at a decent salary, say $70,000 per year

    I wish that were the typical case. I would be looking at a much better financial situation when I move back home next year.
    Here are some median science salaries*:
    biologist 1 $52,002, biochemist 1 $52,002, chemist 1 $42,462,clinical researcher 1 $52,409, geologist 1 $41,058, pysisist 1 $47,200, academic researcher 1 $49,534. Drop 2-5K from that for starting salary and keep in mind that these positions generally require at least a masters, so add another 2 years of unpaid education. These positions generally top out near 100K. Competition for these positions is high and often positions that require a masters have PhDs in the pool. Add another 4 years for the PhD and the MD and PhD are looking for employment at about the same time and the MDs have made more money over that period and are looking forward to making more money after their education though their debt load is generally considerably higher.

    I think we are in agreement that there needs to be considerable reform in medical education in the US.
    I see no reason other than short supply (and a bit of I did it so you should have to as well) to demand 80+ hour work weeks for medical residents.
    I see no valid reason for the severely restricted number of medical school positions. I would not be uncomfortable with a GP who got the occasional B in their undergraduate courses.
    More NP positions should be encouraged etc.

    * add about 10K for engineering positions

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  20. mannning says:

    Yes, I had engineering positions or programming in mind, especially for the defense industry, which seems to pay better than academic or research positions. As for topping out at $100K, this can’t be right for defense people. I have too many examples from my own experience of salaries topping $150k to 200k for management of technical enterprises, once one pays dues for perhaps 10-15 years. But there is the rub: defense work is not palatable for many people, particularly the more pacifist types.

    The main reason for working residents so hard is simple: it is very low cost labor for the flooding ER business, which is more than half made up by illegal immigrants in many hospitals, and they cannot turn them away. The flood where my SIL was in residency was incredible. He did over a hundred deliveries in his second year; almost all were Hispanics with no insurance.

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  21. mannning says:

    Added: An advanced degree is of little use in engineering. In most companies, it has some prestige, sort of like a stamp of approval, but many senior managers believe a masters or PhD is a waste of time for an engineer. Obviously, there are exceptions to this.

    In fact, the four degreed people I fired in my career were all PhDs who thought they could work on their own projects of choice and not anything that benefited the company: how very arrogant they were!

    (To fire someone is a very long and tedious documentation process in most companies, involving shifting managers, keeping a detailed book on every step and assignment given and the results obtained, and then reviews at three levels of management. So it was a careful, well-documented, and fair process, and not an arbitrary decision.)

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  22. mannning says:

    FYI. GG. Google “Engineering Salary Calculator”

    The middle 50% earned between $55,660 and $93,080. The lowest 10% earned less than $44,800, and the highest 10% earned more than $118,750. Median annual earnings in the industries employing the largest numbers of electrical engineers in 2006 were:

    Computer and office equipment: $70,850
    Measuring and control devices: $72,070
    Search and navigation equipment: $70,790
    Electronic peripherals, components and accessories: $73,010
    Engineering service firms: $66,350
    Federal Government $71,320
    Telecommunications, RF: $74,730

    Salaries in 2006 for new grads: BSEEs received starting offers averaging $54,830; MS grads averaged $68,180; and new PhDs averaged $80,440. Advanced degrees are in the high demand by both Fortune 500s and start-ups. Highest salaries for experienced engineers were concentrated on the east and west coasts, and averaged nearly 5.1% higher than the rest of the country.

    So my $70k figure doesn’t hold up on the average or median, but was biased by the knowledge I had of the defense industry.

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  23. John VanSickle says:

    Of course we could go into why med school (and college in general) keeps getting more expensive, but I’d be quoting from Economics 201 again, for the same reasons.

    We clearly don’t have a free market in place for education, and there too we see lots of people who can’t afford what they want. And the solution we’re given is for the government to give more money to the potential customers, thereby creating more demand (and thus increasing the prices).

    It’s been said before, but it needs to be said again: When solving a problem, the government should first identify what it is doing to make the problem worse, and stop doing that, before investigating other potential solutions.

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  24. Search for Cheap Insurance…

    Sorry, it just sounds like a crazy idea for me :)…

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