About Rationally Speaking

Rationally Speaking is a blog maintained by Prof. Massimo Pigliucci, a philosopher at the City University of New York. The blog reflects the Enlightenment figure Marquis de Condorcet's idea of what a public intellectual (yes, we know, that's such a bad word) ought to be: someone who devotes himself to "the tracking down of prejudices in the hiding places where priests, the schools, the government, and all long-established institutions had gathered and protected them." You're welcome. Please notice that the contents of this blog can be reprinted under the standard Creative Commons license.

Saturday, November 12, 2005

Owning your own health care?

I recently came across a 2004 article by Amy Feldman on one possible -- according to some even inevitable -- near future for health care in the United States. The idea is to shift progressively more "ownership" (i.e., purchasing power) to individuals, and away from government and businesses. The underlying assumption is the usual one of capitalist-driven solutions to problems: empower the customer and she will do a better job at managing the resources; if it's your money you are spending, you'll be more careful with it.

To some extent, of course, this is true. I grew up in Italy, where there is socialized medicine (though one can always purchase private services -- the two aren't mutually exclusive), and sure enough one recurring problem in the Bel Paese (beautiful country :) is the fact that people abuse the system by buying more medicines than they need to.

On the other hand, one can argue that this is all good and well for everyday maladies, but that when it comes to serious stuff that requires long-term cure or hospitalization, most people aren't prone quite to that much abuse (after all, who really wants to go through more surgical operations or days in the hospital than is really needed?). Of course, it is in the interest of medical practitioners to overstate needs, so that they can make more money. Perhaps, but I'm not so sure that empowering the "customer" (really, the patient) would make much of a difference in those cases. How many people would argue with a doctor over crucial, possibly life-saving, measures that the doctor says are needed?

The idea of making people more responsible for how they manage everything, from health care to retirement accounts is theoretically sound. Why wouldn't we want to be more in charge of our own lives? Who would argue against increasing personal responsibility in all areas of life? But the practice of this trend tends to ignore some fundamental facts of human psychology. Most of us are simply not equipped to make sound financial or health care decisions, and "shopping around" is something for which we either don't have the time or that simply exposes us to a barrage of information that we cannot properly process.

This may sound like another patronizing liberal call for deferring to "experts," and if so, I'm guilty as charged. But I consider myself an intelligent and over-educated citizen, and I still don't feel at all comfortable making crucial financial and health care decisions on my own -- regardless of how much information I can find on the Internet at the click of a button (indeed, the problem is that I can find too much information, most of which is either garbage or hard to assess critically).

Amy Feldman's article attributes the idea of individually-owned health care to Regina Herzlinger, a Harvard Business School professor associated with the Manhattan Institute, the conservative think tank who brought us the nonsensical slogan of "compassionate conservatism" on which George W. successfully run before it was obvious for all to see that he is surely conservative, but he ain't no compassionate fellow.

I forced myself to keep reading about Herzlinger nonetheless, and found the catch later on in the article. The Harvard professor does realize the obvious consequence of what she is proposing: more individual control of health care will likely result in an increased divide between the rich who can afford good care and the poor who can't, exacerbating the current trend. Moreover, Herzlinger does acknowledge that the sickest people will not fare well under such system. Hence -- and presumably to the chagrin of her fellows at the Manhattan Institute -- Herzlinger actually advocates a balanced system in which the government (!!) intervenes to protect the poor and sick. Well, then, that makes (medical and social, if not economic) sense, but of course begins to sound a lot like your typical European system, anathema to conservatives in this country.

As Italian writer Umberto Eco once quipped, there is a simple solution to any complex problem -- and it's usually wrong. Outright individual ownership of health care services is a simple solution, and it is wrong. A mixed system, on the other hand, would probably balance the best of both worlds. But can we get the "compassionate" conservatives on board with it?


  1. We use a plan that splits the difference between the larger long term costs and smaller incidental type health issues. Very much like what you are talking about here, I think.

    When the insurance person introduced this to my husband and I, my husband said "Ned, it sounds too good to be true, why would you do this for me?"

    (obviously a former skeptic :)

    In the end, the (roughly 50%) amount you place in you "short term" self-managed account can be saved with interest and turned into a retirement account. Isn't that wild? One does tend to have a high deductible, but the medical savings account keeps it from becoming a potential problem. In three years, if one doesn’t run to the dr. for every little thing, one could have 12-15 k in savings. Otherwise that money, especially for people who are on plans entirely by themselves, is just unrecoverable.


  2. MP,
    While I agree with much of your analysis... ie. too much info for even an educated person to digest, the problem lies with putting a pile of money in the hands of politicians. My bet is (and it's a winning bet) that the politicians will not do with the money what YOU would prefer. First they will syphon off a bunch of it, then they will institute programs and policies that neither benefit you nor follow your principles.
    Besides, privatization doesn't necessarily mean that you would have to make every little decision. You might, for example, join a 'health care union'... something like a credit union. The union would hire experts to analyze the various health care offerings and set up appropriate plans. The point would be to keep the money out of the hands of government which will *always* use it to the wrong ends.

  3. Do you realize how far $12-$15k will (or won't) go. My wife was diagnosed with multiple myeloma (a blood and bone marrow cancer and uncurable at present) 5.5 years ago. The treatment to keep her going (and she is doing quite well thank you) costs $3-$5k/month. A broken leg due to a lesion, caused by the myeloma, on her left femur penciled in at a neat $35k.

    We have medicare plus a full blown health care plan that costs nearly $1k/ month. One year of premiums eats up that little nest egg. If we didn't have that she would have been dead before she was 60. Modern medicine really works, but it really costs. So far we can afford it (or a least the insurance). But with the maniacal national government we are presently suffering how long will anybody from the middle class and poorer last.

    Health care is other-worldly and anything short of a million dollars in your healthcare savings account is a joke and even that is paltry.

  4. My insurance also costs about $12K per year. Five years ago my daughter was diagnosed with Hodgkins Disease (lymph cancer). I don't know the total, final cost of treatment since the insurance company paid most of the bills but I saw some big numbers go by. My guess is the total was over $200K. Insurance is vital. We would have been wiped out without it. Sharing risk with your fellow citizens... spreading the cost... is an appropriate thing to do. Government run insurance however is inefficient and subject to political vagaries. I wouldn't recommend it.

  5. Dennis: "My wife was diagnosed with multiple myeloma (a blood and bone marrow cancer and uncurable at present) 5.5 years ago."

    That's not so good. Very sorry to hear that. But she seems to have done well in comparison to others. A good friend of mine is a supervisor for the Cancer research center here in NM. When my kids are grown in a few, I hope to work for her. Another good friend, an ass. Dean of Med, died in February from metastic [mela] or myeloma. ?? He was such a sweet and gracious man. He permitted the University to do experimental treatments on him, so others could live better lives in the future. Probably one of the most amazing (and almost encouraging) deaths I've ever witnessed.

    I do hope that your wife beats it.

    "Do you realize how far $12-$15k will (or won't) go."

    That is only the part that takes care of smaller incidental costs. One uses a debit card to extract it from a specified bank account that will only permit withdrawals for medical expenses. Interest builds on what we don't spend tho.

    The other % is paid to 'Blue Cross and Blue Shield' and is supposed to cover (I think) up a million. We haven't tested this on big expenses, however.


  6. Owning you own health care can be a great idea. Hopefullly that way more individuals will recieve health insurance.


Note: Only a member of this blog may post a comment.