Why Republicans Fail In Health Care

August 14, 2017

Why Republicans Fail In Health Care

07/28/2017 02:51 pm ET | Updated Jul 30, 2017

Sisyphus was a lot like Trump. In Greek mythology Sisyphus, King of Ephyra, had an overabundance of hubris. He thought he was smarter than everyone, even Zeus. Consequently, he was punished for eternity by having to repeatedly push a boulder up a hill only to have it roll back down again. According to Camus’ interpretation, Sisyphus eventually accepted the absurdity of his fate, thereby achieving a certain happiness. Trump assuredly does not fit into Camus’ explanation. But on healthcare, Trump and his congressional allies align well with the interpretation of the Roman philosopher and poet Lucretius, who said that Sisyphus “is the man who thirsts to run for the rods and cruel axes of public office, and who always returns beaten and dejected.”

Lucretius wrote of the emptiness of the pursuit of power for its own sake. That is essentially what the Republicans have been up to with healthcare. Their Sisyphean push of ACA repeal reflects not just run-of-the-mill political divisions but an utter lack of substance. Trump, McConnell and Ryan ultimately didn’t care what was in their various bills but just wanted a “victory.”

They didn’t care because any notions they advanced of “Republican approaches” to health care would not solve real problems. They can’t because of a deep philosophical flaw in the thinking of Republicans. That’s why controlling he White House, the House of Representatives, and the Senate wasn’t enough. It’s why the various explanations offered for the GOP’s failure don’t really address the point. The failure to repeal and/or replace isn’t just because of a division in the Republican Party between its libertarian/ultraconservative wing and the so-called moderate wing. Nor is it simply because of the lack of presidential leadership, even though Trump has shown, appallingly, his ignorance of the content of his party’s proposed legislation, of the ACA itself, and of the fundamentals of how insurance markets are supposed to work.

The reality is that even if we had a knowledgeable, rational president, and a more unified GOP senate caucus, it is doubtful they could produce a solution that actually addresses deficiencies in health care. The real reason for Republicans’ paralysis on health care is that the party simply will not accept that the only way to produce an efficient and equitable health care system is through more, not less government involvement. There is a reason why among the world’s 25 richest nations, only the US doesn’t have some form of universal health care. The other countries that have universal health care all accept the notion that ensuring equitable access to health care depends on heavy government intervention, and that the “free market,” for all its virtues, is not equipped to guarantee access for rich and poor.

The concept of “moral hazard” underlies much of Republican thinking about health care, especially among those Republicans who advocate the least amount of government involvement in health care. Moral hazard is the idea that people take more risks when they are insured against the consequences of their behavior. In the health care arena, theoretically that induces excessive and inefficient consumption of medical services. However, as Malcolm Gladwell wrote in a seminal 2005 New Yorker article,

The moral-hazard argument makes sense, however, only if we consume health care in the same way that we consume other consumer goods, and to economists… this assumption is plainly absurd. We go to the doctor grudgingly, only because we’re sick. “Moral hazard is overblown,” the Princeton economist Uwe Reinhardt says.

The focus on moral hazard suggests that the changes we make in our behavior when we have insurance are nearly always wasteful. Yet, when it comes to health care, many of the things we do only because we have insurance—like getting our moles checked, or getting our teeth cleaned regularly, or getting a mammogram or engaging in other routine preventive care—are anything but wasteful and inefficient. In fact, they are behaviors that could end up saving the health-care system a good deal of money.

Republicans have promoted health savings accounts as a way to reduce moral hazard. The problem is that poor people – and many in the “middle class” – don’t have enough income to benefit from tax-protected HSAs. Moreover, HSAs can be quite complicated when it comes to accounting and paperwork. Even if HSAs were somehow simplified, there is little evidence that substituting tax credits for direct government health care subsidies is effective in reducing wasteful health care spending or in improving the health of citizens. As Gladwell said, health care is not like the regular consumer marketplace. While informed and engaged patients generally experience better health outcomes, it’s nearly impossible for patients to be fully equipped to make wise decisions in choosing medical services, drugs and doctors simply based on the idea that they are spending their own money rather than money provided by the government or a good insurance plan.

The Morning Email
Wake up to the day’s most important news.

Is there a reasonably workable Republican approach to health care coverage? Yes, it’s called Obamacare, a.k.a. the ACA. As Democrats occasionally remind Republicans, the concept of mandated individual coverage coupled with government subsidies was hatched at the conservative Heritage Foundation in 1989. A foundational principle of Obamacare is to preserve the private insurance marketplace. As Northwestern professor Craig Garthwaite said in a recent Washington Post op-ed, “Obamacare is broadly an extension of traditional Republican beliefs.”

Obamacare’s flaws flow in large part from the gymnastics it performs to protect private insurers, and its failure to sufficiently regulate the private marketplace. Take Switzerland, for example. It’s fair to say that the Swiss are enthusiastic capitalists. They chose not to establish a government-run health system like in the UK. Switzerland, like the U.S., decided to preserve the private insurance marketplace. But in order to make its system widely accessible and affordable, the Swiss version of Obamacare much more tightly regulates insurers and providers. Insurance companies must provide basic insurance plans to all citizens. These basic plans are standardized and cover most needs. Deductibles and co-pays are capped and are much lower than in the US. Premiums are low because insurers are not allowed to make a profit on the compulsory basic insurance. They are permitted to profit only on supplemental plans that cover, for example, private hospital rooms and certain services. In other words, the Swiss have accepted the need for much more government involvement than do the Republicans.

I remember attending a health care conference in Austin, and being warned by a consultant that Obamacare was a big step toward “being like the Europeans. You don’t want that do you?” I asked the consultant if he had ever been treated in Europe. No, he hadn’t. I told him that I have – in Britain, Germany and Switzerland. I told him my experiences were positive and asked him why he was so fearful of European systems. He uttered some banalities about quality of care and alleged waiting times (by the way, waiting times in the US are soaring). I told him that I had lived in the UK for four years and that, while the UK’s National Health Service (NHS) has its problems, I had no doubt the vast majority of Britons would pick their system over the hazardous uncertainties of U.S. health care. In fact, I’m quite sure that the results of a 2016 Gallup poll could not be replicated in Britain. The poll showed that six in ten Americans worry about unexpected medical costs.

Republicans must abandon their anti-government dogma and go big in the opposite direction. The U.S. needs to adopt universal health care (UHC). Whether that would involve a single payer system or something else, it will require more government involvement. To quote from a 2016 report by the Organisation for Economic Cooperation and Development:

…There are some core organisational principles of UHC that all countries share in common. In UHC systems, health coverage is mandatory regardless of age, gender, income, health status, employment and occupation. Risk is pooled across the broader population… Funding of UHC implies cross-subsidisation from the healthy to the sick and from richer to poorer populations. These principles mean that individuals should not face financial hardship because of the costs of health care. That is, an individual’s access to care should be based on need and not on ability-to-pay.

Achieving effective and equitable UHC has a strong potential to improve and extend people’s lives, reduce inequality and potentially lead to economic growth. There is a positive association between UHC and health outcomes. Failing to do may lead to deteriorating population health outcomes.

That’s the reality – not dogmatic and false assertions about the magic of the “free” health care marketplace.

Comments

2 Responses to “Why Republicans Fail In Health Care”

  1. rebecca spoon on August 14th, 2017 3:31 pm

    Why REPUBLICANS fail in healthcare? Give us a break, The sad sick truth is that BOTH sides have sold out us and the truth on healthcare. Obama and Democrats passed what used to be the Republican plan without a single Republican vote. We are sick and tired of being lied to about healthcare by BOTH totally corrupt sides of the aisle. We need One Plan that protects the lives of everyone equally from the president on down. Anything less is discrimination, inequality and injustice of the worst sort (to paraphrase Dr. Martin Luther King). This time DEMOCRATS are perpetrated it by passing what should be called the “Still Unaffordable and We Don’t Care Act”…or Rombamacare.

  2. Barbara Harrison on August 14th, 2017 3:47 pm

    Rebecca,

    I very much agree with you. Both parties are corporatists. Amount is irrelevant. They both take money from health insurance companies. True since payer is picking up support. But there is still a lot of work to do to get the word out. It is critical that we understand poor rural whites who according to our outlook vote against themselves. In many cases they are the key to the Republican vote. On the other hand the Democrats need to be called to task for their words but lack of action.

    It is time we approach this issue and all issues by economic actions. Demonstrations, protests and rallies are fine. BUT without economic action, I am not too sure we will move forward through this broken system, which has been broken from the founding of this country.