My first semester in college, I talked my way into a political economics class restricted to upperclassman. Never one to shy away from a challenge, I wanted to take the course because I was passionate about understanding the intersection between government and the free market and how it shapes our society. Not surprisingly, it was the best class I’ve taken and its lessons continue to influence my views on the balance between government and the private sector—and lessons that leaders in Washington would be benefit from learning.
While the fiery debate on the Affordable Care Act continues with discussion of malfunctioning websites, cancelled policies and rising premiums our attention is on the symptoms rather than the cause of the problem. In the elegantly simply lessons of that sun soaked classroom we focused on two kinds of economic goods: public and private. Public goods are those things that must be experienced by the whole both in terms of costs and benefits. For example, a small group of people can’t have national defense while excluding others from it—either we have it or we don’t. Same goes for roads, clean water, public safety, etc., these are all goods that contribute to a strong society, and cannot be paid for and used by only a select group of people, those items are private goods. If you want a house and have the resources to secure it, you can own a house and not everyone needs to own a house to have a healthy community. Perhaps oversimplified for the sake of this this article and its simplicity is what enamored me; if a good has a public benefit then it is most economical for it to be provided for by our society without profit. Essentially, if we want everyone to have it then, we share in its cost through taxes and it is distributed to best serve the community.
The truth we seem unwilling to accept in this country is that health care is a public good—to have a healthy vibrant society, we need healthy people and the health of one person does impact all of us directly and indirectly. Just imagine the one sick person on an airplane, bus or crowded elevator—he is having an impact. Or the economic impact of a sick woman on her family, employer, school, etc., also has costs. Even more to the point, is that we have decided as a society that we will treat any person, regardless of their ability to pay—to me the perfect definition of a public good.
Yet, that is not how we view healthcare in the United States, we treat it as a private good—and it isn’t working for anyone. The only beneficiaries of the current system are the behemoth insurance companies that profit mightily from the enormous sums of money being spent on “healthcare” not patient care (or the nurses and doctors who provide the service). We are stuck trying to pay for public goods through private sources and no matter if a website functions or not—it isn’t going to work. The real problem with Obamacare is that it didn’t address the fundamental issue—to effectively deliver health care we need to treat it is a public good and put the investment of our nation’s resources—public and private on keeping people healthy and treating the sick from a place of ease of access and belief that individual contribution provide for the health of all, especially those who fall ill.
Follow the money, is a well-worn refrain and yet no one in Washington seems to be doing it. The dirty little secret is that people employed by large employers have the best coverage at little or no cost—negotiated big business to big business. For those who work for themselves or small companies, an increasingly larger share of individuals do each year, or are non-working adults such as students or caregivers, they are left to fend for themselves in the morass of individual plans. While Obamacare is noble in its desire to pool individuals to be a part of a larger group, the current problems are endemic of a system that doesn’t want economies of scale—it wants profit.
Ultimately the key question is should insurance companies be profiting from a healthy citizenry? Although we already know the answer, insurance companies don’t profit from healthy people, they profit from sick people, so we have a health care system that is the world’s most expensive and one of the least effective in keeping people healthy. If our political leaders want to address this issue they will get beyond rearranging the chairs on the deck of the Titanic and be honest about the need for a single payer system. Of course that would be mean standing up to one of the largest political contributors—health insurance companies.
For the public, it is time to look to electing leaders who can see beyond the next campaign contribution to provide what we all want—quality health care that is assessable to all for the betterment of our society and the health of those with whom we share our communities.
Thank you for having been a curious student! While teaching MPA students policy analysis I would use the Basic Methods do Policy Analysis text by Patton and Sawicki. To analyze any problem, you must first properly define the problem. If only our legislators would be willing to define problems objectively, without partisan or campaign contribution aspects overwhelming objectivity. I believe ideologies can unite to solve problems if they have been properly defined and if partisanship and campaign financing are made secondary.
So you have defined our national health care problem quite well, and I believe your analysis is right on, so you have earned an ‘A’.
Thanks Paul . . . good to know the “‘student” skills are still sharp. An important part of being a leader is knowing that we always have more to learn!
I have to disagree with your statement that ‘insurance companies don’t profit from healthy people, they profit from sick people’. Prior to my career in state government I worked in dentistry for 20 years. Insurance companies pay out less for healthy people than they do for sick people. Think about it – if all the medical care that you need every year is your physical, some labs and a dental cleaning, the insurance company is paying much less than for someone who has diabetes or cancer. That’s part of the reason why ObamaCare encourages the enrollment of young, healthy people: to subsidize those who are sick.
Marian . . . I agree that healthy people cost less than sick people AND the way the system is currently structured there is very little “profit” in having healthy customers. Profit comes from expensive (and often excessive) medical treatment. The underlying belief is to treat disease and not maintain health because profit rules our current health care system–not a dedication to a healthy citizenry.
Also, the dental industry is one of the few areas of our current system that normalized preventive care i.e., six month cleanings, that has led to much healthier teeth for those with insurance.
Nice post. Good insights.
In some ways, those who rail on about the ACA as “socialist” are sort of right, in that the conflicting attitudes about it are not simply points of policy preference, but more deep-seated beliefs about what the purpose of a nation IS.
More and more, one sees the emergence of “à la carte citizenship”; i.e., I’ll pay taxes for those services I want/need, but don’t ask me to be involved with or even remotely responsible for supporting those services I don’t want/need. Over-arching all the discourse on “government waste” and wise/unwise expenditure of treasure/revenue is the not-so-trivial matter of what nations exist for. And if not for public good, then what for?
I often wonder if there is a connection between many of the current debates and attitudes, and the fast-food industry.
I’ll explain. The late 1970’s saw the emergence of the fast-food industry and service sector, that provided a generation of youth with more disposable income than they had ever had. I don’t know about your adolescence, but the only people I knew who worked during high school (i.e., the school year, not the summer), either did some babysitting or had a paper route, or else had to work in the family business (I did every Saturday in my dad’s machine shop), or had a car habit and eventually dropped out of school. The idea of someone working 15 hours a week, in tandem with school attendance, was science fiction, just didn’t happen.
When low-paying service-sector jobs started popping up in the late 70’s like dandelions, we saw a general increase in adolescent employment. While there are some good things to come from this (see this decent review: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2936460/), much research noted a variety of negative outcomes when kids started working more than 12-15hrs weekly. One was a variety of counter-productive work attitudes. Another was a decline in both family and school involvement. Another was an increase in use of controlled substances (tobacco, alcohol, etc.). But for the purposes of my point here, another was unrealistic consumer expectations, fostered by illusory wealth. It’s easy to think that the future will allow you to have whatever your little heart desires when you live at home, have money to spend, and don’t need to spend any of it on toilet paper, milk, heat, garbage bags, rent, insurance, etc., or other collective costs (AKA public goods). And when you get pursued by those willing to extend you credit (something I NEVER experienced during university), those expectations get magnified.
So where am I going with this? It is now 35 years later, and those who may have been 16 in 1977 (still got your Ramones and Talking Heads albums?) are now 52. They consider themselves to be “veterans” of paying taxes and voting, but are completely unaware that they have never known a time when they weren’t supposed to, or expected to, have access to disposable income, like those birth cohorts before them. In their minds, they are entitled to have money to spend on what they want. And “taxes” are simply viewed as a means to deprive them of having more spending money (Yes, I know that’s simplistic, but hear me out). Public goods are simply an extension of that infringement on their consumer expectations.
I’m not attempting to paint those cohorts as whiners. Rather, their beliefs about public goods have been shaped by their rather unique experiences, stemming from the labour history, and corresponding economic history, during their conscious lifetime. The same way mine were shaped by growing up during a time and circumstances when affording something on one’s own was a rare experience, and shared purchases were more likely. I wouldn’t be the first to suggest that political philosophy is shaped by economic opportunity.
I don’t know that societal eras can be described in terms like “a mistake” or “correct”, but I think we do find ourselves at a sort of crossroads where we need to ask if the attitudes that have been shaped into so many adults over the past 35 years are ultimately sustainable and compatible with the notion of nationhood. Is nationhood compatible with “à la carte citizenship”, and if not, how do we turn the darn boat around? And if the boat can’t be turned without tipping over, what does nationhood and citizenship become down the road?
So, in sum, I think you’re quite right. The “battle”, for want of a better term, is over the idea of “public good”, the role it plays, and ought to play, in the life of citizens, and what they are willing to give up for it.
I agree wholeheartedly the issue was, is, and will always be what is a “public good”. I would also add, “and how to pay for it”. Where I disagree in your analysis is with what appears to be “one or the other”, but not “both”. ACA/Obamacare is an attempt (I believe a poorly thought out one, Massachusetts appears to have done a better job on a smaller scale) to work the public-private collaboration. Europe is often cited, yet few of those countries have a single-payer system today, but a blend of public-private. People love their Medicare (I can’t wait until I can use it). But, the abuse and waste is huge. A recent article in the Washington Post once again demonstrated the problem. The private sector is more efficient, but does not always consider public welfare vs. profit. So, a blend, IMHO, is more likely to be successful. There is tremendous room for debate on what the balance should be.
I also dislike “à la carte citizenship”. Right-to-Life people do not want to pay for abortions; pacifists do not want to pay for defense. Car commuters don’t want to pay for more buses; mass transit commuters don’t want to pay for more roads. Lots of people don’t want any kind of national service requirement, even if it includes more than military service. Part of the cause of such attitudes, I believe, is that government is doing much more than it did 40 years ago. Thus, government programs and policy will “gore more bulls”, cross paths with a much wider array of its citizenry.