On health costs, security, and our nation’s moral character

One of the rhetorical shifts of this week came in the form of the Romney campaign’s press-secretary Andrea Saul responding to a super PAC ad – daring to point out the benefits of Massachusetts “ACA-lite:”

“To that point, if people had been in Massachusetts, under Gov. Romney’s health care plan, they would have had health care,” Saul said on Fox News. “There are a lot of people losing their jobs and losing their health care in President Obama’s economy.”

The above comments, along with some others made my Romney, prompts erstwhile conservative apostate David Frum to write (emphasis mine):

The Romney campaign appears on the verge of pivoting and re-embracing the candidate’s most important achievement as governor. Some conservatives are already expressing dismay. They should not.

[…] let’s just recall why the ideal of universal coverage—Romneycare—fits well and rightly into mainstream modern conservative politics:

He goes on to list six reasons why, and feel free to click through and read reasons two, three and five. I’d like to comment on one, four and six, chosen for relevance given that I seem to be on a particular health policy kick of late. Because despite his head-scratching reference (in point number four) to some of Obama’s ideas for middle-class security threatening “the whole free-enterprise system,” Frum makes good points.

1) “It saves money. Every other advanced democracy covers virtually all of its people at a cost relative to national income of something like 60% of what the United States pays. That’s just wasted money—money that could buy other things.”

He’s right, of course. Yet he curiously fails to mention the distinguishing difference between our system and other democracies. Which is that when it comes to national health care spending, for them, government works. It may work in different ways – various structures of publicly funded and privately operated systems (Switzerland, Netherlands) to top-down public operations (Italy, UK). Yet irrespective of whatever deficiencies that may exist in those other national health structures (not that we don’t have them too) they nevertheless spend far less in terms of GDP per capita:

Enjoy a slower rate of growth:

While being comparable (or better) in terms of life expectancy gains at birth:

As well as gains at age 65:

It perhaps goes without saying that realizing even a portion of that 60 percent as savings would go a long way towards painting a brighter national budget picture.

4) “It provides support to the middle class in a time of anxiety. Globalization has thus far tended to enrich the rich and squeeze the middle, not only in the United States, but in almost every developed country. Many ideas for securing the middle that we hear from e.g. President Obama threaten the whole free-enterprise system. Health security puts a floor under the middle class without radical change to the rest of the economic system.”

I’m sure many of my conservative friends would vehemently disagree with the idea that any health security framework that would qualify as ‘universal’ would be possible without radically changing the economic system. The effects of achieving universal coverage is a debate for another day, thus whatever the externalities may be it still strikes me as a laudable goal overall given the appeal of such security universality brings.

Two ways that universal health security can create such a floor is through greater job mobility and fewer medical bankruptcies. The literature on health insurance’s effect on job mobility is well established, whereby the result of having employer-provided insurance can result in ‘job-lock.’ Here’s Jonathan Gruber, writing about job mobility in 2009 (my emphasis):

Over the past fifteen years, dozens of studies have documented the detrimental impact that job lock has on the economy. These studies typically compare the mobility of workers who are at firms with insurance but do not have an alternative source of coverage (such as spousal insurance or COBRA continuation coverage) to those who do have an alternative source of coverage should they leave the firm. The studies find that mobility is much higher when workers do not have to fear losing coverage; job-to-job mobility is estimated to increase by as much as 25 percent when alternative group coverage is available.

Job lock is a serious problem for our society, because one of the bedrocks of our long-term economic success is our fluid labor markets compared to other nations, […]

I would continue to offer conjecture that such job mobility is especially important in a stagnant economy. How many people are unwilling to leave their jobs because they face the likely prospect of finding no other job at all, let alone one that might offer health insurance? If, as Gruber states, fluidity in the job market is a ‘bedrock’ of our long-term prosperity, then it stands to reason that we would want to pursue policies the make it easier for the market to efficiently allocate labor resources. Of course this directly implicates the tax-exclusion of employer-provided health insurance, and is something that most agree should be phased out. The Affordable Care Act does something like this through limiting “Cadillac health plans,” but alternative proposals tend to ignore that we should have a workable alternative before attacking such ‘job-lock.’

Which leads me to the other impact of poor health security – the issue of medical bankruptcies. A study published in the American Journal of Medicine found that in 2007 around 61.2 percent of all bankruptcies were medical in nature, an increase from 46.2 percent in a similar study conducted in 2001. Most of those debtors were from the middle-class, having achieved a level of economic stability that in other respects is now more difficult than ever to attain.

From the AJM report (emphasis mine):

How did medical problems propel so many middle-class, insured Americans toward bankruptcy? For 92% of the medically bankrupt, high medical bills directly contributed to their bankruptcy. Many families with continuous coverage found themselves under-insured, responsible for thousands of dollars in out-of-pocket costs. Others had private coverage but lost it when they became too sick to work. Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year. Income loss due to illness also was common, but nearly always coupled with high medical bills. 

Of course, the grim-reality doesn’t end there (again, emphasis mine):

[…] there is ample evidence that the financial burden of illness is increasing. The number of under-insured increased from 15.6 million in 2003 to 25.2 million in 2007.3 Of low- and middle-income households with credit card balances, 29% use credit card borrowing to pay off medical expenses over time. Collection agencies contacted 37.2 million Americans about medical bills in 2003.9 Between 2005 and 2007, the proportion of nonelderly adults reporting medical debts or problems paying medical bills rose from 34% to 41%. 

I happen to think it absurd that such a high number of bankruptcies (with all the accompanying negative economic externalities) can originate from illness or injury. These are conditions that can be cruelly arbitrary in nature, much more so than other ‘roadblocks’ in our economic lifespans. And finally…

6) It’s the right thing to do. “To make men love their country, their country ought to be lovable,” wrote Edmund Burke. The United States will be a better country without this unnecessary fear pressing on millions of its people—and a better country will be a stronger country.

It’s subjective, sure, but if love of country doesn’t motivate conservative support for universal coverage, how about mutual and moral responsibilities to reduce burdens? Indeed, such a concept once enjoyed strong support from the presumptive Republican presidential candidate. And in the Journal of the American Medical Association – written (gated) by Tina Rulli, Ezekiel J. Emanuel, and David Wendler – comes the position that individuals have…

[…] a duty to buy health insurance based on the moral duty individuals have to reduce certain burdens they pose on others. Because physicians and hospitals have a duty to rescue the uninsured by providing acute and emergency care, individuals have a corresponding duty to purchase insurance to cover the costs of this care. Requiring individuals to meet this obligation is consistent with respect for individual liberty…

I don’t often delve into issues of morality, but please allow me this small bit of social-theoligizing; what is the point of our nation’s productive wealth, beyond its enrichment of fewer and fewer citizens, if it also does little or nothing positive for the least of its members? If, as Hubert Humphrey spoke of it, “The moral test of government is how it treats those who are in the dawn of life, the children; those who are in the twilight of life, the aged; and those in the shadows of life, the sick, the needy and the handicapped,” then the absence of health security that Frum, myself, and many others wish for is a sad indictment of our country’s moral character.


One response to “On health costs, security, and our nation’s moral character

  1. Pingback: A (policy) means to an end | Punditocracy·

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