The Unspoken Barrier to Real Healthcare/Insurance Reform

I often say “I blame conservatives for Obamacare” or even write it on signs to provoke discussion.  Oh, it is not anything I’ve ever seen conservatives do.  This is purely an act of omission that is part of a much greater deception that has befallen perhaps three-quarters of our population.  There are two things that reveal the depth of the deception and provide the basis for the direction of my thoughts.

First, in the debate prior to Obamacare, one lame conservative rebuttal went like this: “Surveys show that >80% of Americans like the Healthcare they have!”.  In the first place they really meant Insurance.  This was repeated over and over, and was a major red flag of misunderstanding.  Second is the fact that adoption of High Deductible Health Plans with Health Savings Accounts remains only a small portion of the market share (<10%) after 9 years of availability, being another sign that the issue is poorly understood.

So just what is this deception or misunderstanding?  Quite simply we have embraced a product and approach that encourages massive overuse and benefits no one greater than whoever sold it to you.  Any attempt to “insure” the everyday, the expected , or that within the ability to pay otherwise is a fool’s game that always does insure one thing, that the incentivized overuse of others will be in your premium.  That most young people face a greater unexpected risk to their finances by a major car repair than health issues still does not make the purchase of recent attempts to sell car repair insurance a good idea for most who buy it.  Yet Obamacare seeks to build on this fallacious and flawed approach,  aided immensely by the many who’ve already bought into it by accepting low deductible, cover everything, third-party prepayment schemes and calling it insurance.

To this day the gold standard of research, a brilliant piece written in 1994 is as relevant today as it was then.  CATO Policy Analysis No 211 Why Healthcare Costs Too Much by Stan Liebowitz examines the effects of what happens when we create the illusion of free or almost free with low or non-existent deductibles or small copay amounts.  His study put a staggering estimate on the cost of the overuse this causes.  The amount was $300 billion in overuse plus $33 billion in associated administrative costs, for a whopping total of 1/3 of a Trillion Dollars in 1994!  Notably Liebowitz suggested as a remedy the greater use of high deductible insurance and health savings accounts.   In the time since 1994, into this toxic soup has been stirred more and more state mandated coverages providing even more opportunities to overuse.  Some of these are as silly as marriage counseling or massage therapy, things that should be questioned as whether they are healthcare at all, yet they are in our policies and premiums with billing codes to support them and schools to train the billing coders.  Where does it stop?

Conservatives need to recognize the powerful truths that have been hiding in plain sight and promote the simple solutions that are at our feet.  In addition to the Liebowitz study and others we have the results of a real world example in the state of Indiana that gets too little mention.  By only offering a choice to their 30,000 state employees and then getting behind it with education, Governor Mitch Daniels in his March 1 2010 op-ed in the Wall Street Journal revealed the results of getting >70% of their state employees to elect a high deductible health plan by their choice.  He said that Indiana in 2010 would save at least $20 million as satisfaction was high with only 3% switching back to the traditional PPO plan after having discovered the high deductible approach.

The times when Obama did provide an opening by saying he wanted to see better plans if they were out there, the ammunition was at hand.  Somehow we got caught up in their argument and never went full-bore into what does work and why it works.  It is no more difficult than the restoration of a functioning free market that comes from increasing direct payment and limiting third-party payment to its rightful place in the shadows of absolute necessity.  The low deductible cover almost everything approach is an expensive false comfort accepted by too many and why this illusion stands as a barrier to meaningful reform.  Folks do not like to admit how wrong they have been.  By peeling away politics and legalities and emotion and lately religion, and getting to basic choices on the Smart vs. Stupid Scale, based on facts and then the constant promotion of these truths, real reform may yet be achieved.  The role of education should be obvious.  Let’s get on with it.

Note: This post shared to WatchdogWire-Pennsylvania

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