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Our country's health care reform dilemma has me pondering the relationship between health care and the Tragedy of the Commons. The idea of the commons seems to be everywhere these days, perhaps because political scientist Elinor Ostrom won the 2009 Nobel Prize in Economics for her work on "Governing the Commons."

I wonder if opponents of reform have worked themselves into a such lather because they are being asked to think of health care in a different way  - not as a commodity that generates profits, but as a commons that all participants have an equal stake in cultivating and maintaining.

A commons is by definition a finite, "common property resource" shared by all. Viewing health care as a commons would require not only a change in perspective, but a radical change in behavior from all the participants in the system.

If one imagines health care delivery, and the money required to maintain a system that provides care equally to everyone, as a commons - that is, a public system with finite resources -  it's easy to see why the system is failing.

There are two fundamental and deeply intertwined problems afflicting our health care system:

  1. Over-utilization of the system by doctors and patients.
  1. A payment system that reinforces and incentivizes over-utilization.

Now, in any commons there is a phenomenon known as "free-riders" - those who consume more than their fair share of a public resource or make excessive use of a common property resource. The textbook example is someone using public transportation without paying the fare. If too many people do this, the system will not have enough money to operate.

In the "commons" known as our health care system, there are several types of "free-riders," all of whom drain care and/or money from the public system. The most obvious example is a person who does not have health insurance but uses a hospital emergency room when he requires care. The cost of this care eventually gets passed on to those who do have health insurance, either in the form of higher premiums or denial of coverage by an insurance company.

A hospital is obligated to treat anyone who comes to its emergency room. So when Patient A, who is uninsured, needs emergency care, the hospital must incur the cost of treatment. To make up for the loss, the hospital must negotiate higher rates with insurance companies for other non-emergency treatments and procedures. This, in turn, increases the cost for the insurance company. So when Patient B, who has insurance and pays his premiums, goes into the hospital, his insurance company may deny him coverage for his treatment in an effort to contain its losses. Patient B can't afford the cost of the treatment, so he is forced to go without it.

In this scenario, Person A is taking from the public resource without shouldering his fair share of the cost to maintain it, while Person B suffers a disproportionate loss.

The individual mandate currently being considered in Washington addresses this problem. Many people are outraged by this idea, but when viewed from the perspective of a commons, it makes perfect sense.

Except for the fact that there are other free-riders.

Our health care system has participants who use the system to generate profits. By definition, these participants want to take more from the system than they are willing to contribute; their goal is to maximize their benefits from the system while ensuring that the losses are spread among all the other participants. In other words, they drain the system of money and resources that could be going to care, but instead are going into their bank accounts.

Among these free-riders are for-profit, and, up till now, largely unregulated insurance companies.

Health insurance in this country was not always like this. Here's a quote from an article at

If you want to know what went wrong with our health care system and the best way to fix it, all you have to do is look back a few decades to a time when health care was a community concern, considered as essential as any public utility.

The irony in the current debate over a "public option" health plan is that we once had a form of socialized medicine. Blue Cross, the most recognizable name, began in 1929 as a tax-exempt insurer covering a community of teachers in Dallas. Blue Shield was started as a tax-exempt insurer to cover employees of mining and lumber companies in the Pacific Northwest, with a group of local doctors providing care through a service bureau.

It's important to remember that insurance was originally predicated on the notion of "mutuality." Customers pay money to an insurer in order to pool their resources and spread the cost of the risk. The money collected is intended to protect all of the contributors. The insurer does not seek to maximize its profits. The insurer exists solely to aid those who contribute money.

So what changed?

We lost the positive aspects of affiliation health insurance starting in the 1960s and through the 1980s when Wall Street discovered there was money to be made turning nonprofit health insurers, hospitals and nursing homes into investor-owned companies. What we got was a massive conflict-of-interest--profit vs. public good--that has culminated in a dysfunctional health delivery system that has undermined our economy, reduced our national wealth and torn our social fabric. -

Health insurance driven by profits, not by the needs of its customers, has abandoned the whole idea of mutuality. By denying coverage to their contributors, while reaping profits, they become a type of free-rider - draining the system of money and resources while deriving great benefits from participating in it.

In addition, doctors who over-charge for services, over-prescribe medicine or over-use expensive procedures can be considered free-riders. In our imagined health care commons, they are over-utilizing a common property resource - care and treatment - which inevitably leads to  denial of care and treatment to others. Our fee-for-service system rewards this behavior: in most cases, a doctor who prescribes more treatment will make more money.

Even worse, the doctor's behavior reinforces and perpetuates the free-riding behavior of the insurance company:  if an insurance company is paying money to a provider for unnecessary services, it will seek to limit or deny those services to somebody else in order to maintain its profits.

There is only one conclusion: for-profit insurance companies and fee-for-service treatment have no place in a health care system imagined as a commons. Any notion of maximizing profit will inevitably subvert the system and eventually lead to its collapse.

Now, it must be said that the recent talk of "record profits" for insurance companies has been a bit exaggerated. Nevertheless, 1.56 billion dollars is a hell of a lot of money - and it is money better spent on care. And this doesn't even include the enormous amounts of money spent on administrative costs.

Making a profit by denying coverage or care is simply immoral. There is no way around it. And if insurance companies are spending upward of $1.4 million a day lobbying against reform measures, then clearly there is something they are desperately trying to protect.

As for doctors, most sensible people agree that they should be well-compensated, based on the high cost of their training, their unique abilities and their essential role in our society. Yet, in a conversation I recently had with a health care lobbyist, he pinned much of the blame for the exorbitant cost of our health care system on specialists. He was very clear: they want to make money. They're not happy making, say, $600,000 a year, if it's possible to make $800,000 or a million. They have been fighting cost controls tooth and nail for many years. This is very likely a rather broad generalization. Nevertheless it underscores the point that the whole notion of maximizing profit has no point in a health care system imagined as a commons.

Treating our health care system as a commons would inevitably lead to a broad change in behavior and attitude toward care. The great fear is that this would inevitably lead to certain kinds of rationing.

This fear ignores the reality that rationing already occurs in our system. Unfortunately, the rationing that occurs is largely hidden and nearly impossible to quantify, so it's easy to pretend it doesn't exist.

But there is no doubt that when an insurance company looks for ways to deny coverage for a patient's treatment and that patient therefore does not receive treatment, that is rationing. Eventually that care - or the money to pay for that care - is going to go somewhere. Just not to that particular person at that particular time.

Physicians for a National Health Program says this:

Rationing in our system is carried out covertly through financial pressure, forcing millions of individuals to forgo care or to be shunted away by caregivers from services they can’t pay for.

If our health care system is imagined as a commons, then it is in everybody's interest to participate and to seek better ways to deliver (and receive) quality care at a reasonable price. A change in the delivery of care will no doubt occur - and some will no doubt scream "rationing!" - but the changes would be based on an increased focus on patient care, rather than profits.

The rationing that takes place in U.S. health care is unnecessary. A number of studies (notably a General Accounting Office report in 1991 and a Congressional Budget Office report in 1993) show that there is more than enough money in our health care system to serve everyone if it were spent wisely. - PNHP

Ironically, the phrase "patient-centered care" has been used quite a bit over the course of this debate. That phrase alone speaks volumes about how far we have gone astray. Whenever I hear someone say we need to work toward a system with more "patient-centered care," I have to ask myself, "Who exactly should care be centered on, if not the patient?"

Treating health and heath care as a commodity is immoral. Profiting from the continued illness or death of another human being is unconscionable.

None of the legislation currently under consideration in Congress adequately addresses this reality. We can only pray that whatever passes will represent a small step in the right direction.

For more from this writer, please visit:

Originally posted to Bare Left on Tue Jan 05, 2010 at 07:34 AM PST.

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Comment Preferences

    •  good read (2+ / 0-)
      Recommended by:
      joy221, BentLiberal

      totally rec'd!

      The problem with people who need to follow leaders is that they need to follow leaders.

      by Cedwyn on Tue Jan 05, 2010 at 07:50:08 AM PST

      [ Parent ]

    •  thanks for the lowdown, (1+ / 0-)
      Recommended by:
      Regina in a Sears Kit House

      on the subject; reading it is validating; i've had the idea for years that this was the problem, i.e. the profit motive in the "industry";

      i had blue cross/blue shield when i was raising a family, and we had only (one) moderate income, and could afford the premiums;

      then i was divorced and couldn't afford the premiums any more, they had gone to something like $500 a month for one person; so i gambled and won, because i never needed it, and now i've got medicare;

      at first it was just that i noticed that people who had insurance went to the doctor a lot for everything and just to be told they didn't have cancer; then my present husband, who also didn't have insurance, got hurt using a power tool; a finger was smashed; he went to the emergency room, where they did some preliminary work, and told him to see a doctor; the e.r. bill wasn't too outrageous;

      the doctor's bill also was affordable because he didn't have to do much except approve the first treatment, and recommend therapy with water at the local hospital, several times a week; when the doc was told we didn't have insurance, he said the cost to us would be in the thousands; then he told us how it could be done at home, swishing the finger around in water;

      that taught me a lot about the system;

      i expect that once we have made history with a health care bill, and if our government continues to be administered by qualified people of good will, this issue will pass into history, since all the necessary changes to make it economically viable will be made;

    •  Excellent new slant (1+ / 0-)
      Recommended by:
      Regina in a Sears Kit House

      on how to express exactly some of the points I've been thinking. Thanks. The idea of the commons also applies to lots of the other divisions currently being fought over between the progressives (pro-commons) and the conservatives (pro-individual)

      "It is the duty of every Patriot to protect his country from the government." Thomas Paine

      by rockfish on Wed Jan 06, 2010 at 07:56:32 AM PST

      [ Parent ]

  •  I See, Our 2 Main Problems Equal Excess Care (0+ / 0-)

    No, I don't think so.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Jan 05, 2010 at 08:49:43 AM PST

    •  You don't think many doctors will be biased (2+ / 0-)
      Recommended by:
      unclebucky, JohnnySacks

      towards recommending more and more expensive procedures if they make money on a per-procedure basis?

      ORGANIZE early, ORGANIZE often.

      by bicycle Hussein paladin on Tue Jan 05, 2010 at 08:44:15 PM PST

      [ Parent ]

      •  Exactly, this and many other things have to... (0+ / 0-)

        change to make the future health care program work the way it should.

        Per-procedure basis - Once I worked at a University as tech support. Each department paid a yearly fee to our CSO for that support, and then they could get reasonable good support. In the late 90s the university accountants brought in "cost-recovery accounting," or per-procedure basis. That meant that every consult was billed (and every billing had to be accounted for, and every bill had to be paid individually). When the departments saw the bills, they started asking for less help, and they started to rely on their smarter student assistants for "free" help, get it? And when the call center (yes, then they had a call center to triage calls, instead of simply take care of the need) got fewer and fewer calls, the CSO shrank its staff.

        On the basis of finite resources, per-procedure basis billing should shrink the need. But another problem is the lack of accountability for health procedure requests (oh yeah, here comes the "death panel" BS. I was on a death panel with the current system, when they asked me about "do not resucitate" procedures with my mom, not pretty, but no different than before, than now and than the future. And even though I said no through my tears, they STILL DID about $5000 more stuff).

        Thus, there has to be accountability and self-restraint, things that are very difficult to do when libertarian-types and greedy-guts-types are running the show.

        Again, management of health has to change radically, and they are entrenched now. Boy, if Single Payer Universal ever comes, management will be digging first class deluxe bunkers.

        Ugh. --UB.

    •  Expensive, Worthless Care (2+ / 0-)

      Zero ROI, negligible outcome improvement, any way you put it, it's an unnecessary burden.

      What is the single most proven beneficial outcome improvement? Excercise.
      Severity of flu 25-50%
      Stroke 27%
      Diabetes 50%
      High blood pressure 40%
      Mortality and recurrence of breast cancer 50%
      Colon cancer 60%
      Equal to Prozac or behavioral therapy for depression
      Alzheimer's risk 40%

      Yet, we're bombarded in the media by adverisements for highly profitable miracle drugs which (allegedy) cure and junk food which (definitely) cause the above problems.  Part of the protection of the commons must be borne by the utilizers by taking responsibility for the necessary behavioral changes required so the irresponsible are not 'free riders' expecting a safety net to exist for them regardless of how irresponsible they may be.

  •  This is really good. (5+ / 0-)

    We belong to a United Church of Christ congregation.  The administration and mission of our church is held in common.  We actually vote.  Some serious investment matters came before us several years ago when an elderly member left a sizable bequest to the church without much instruction.

    Almost twenty years passed before a coherent investment and withdrawal plan could be put into place.

    One of the biggest hurdles was to integrate the idea of the commonwealth.  We stumbled upon an article written by James Hudnut-Beumler called, Creating a Commonwealth: The History, Theology and Ethics of Church Endowments.

    He says in part, "Clearly for me, it is all part of the same pie - be it income or wealth, it's God's stuff, not ours."

    Further he writes, "The term commonwealth, thus reminds us that it is wealth and yet that the beneficiary of the wealth is not a private individual, but a community"

    Here is a link to the entire essay on "Common wealth".  We used it in our discussions.

    So sorry for lack of blockquotes, my adobe reader wouldn't allow them.

    Rec'd and tipped.  Very good essay.

    "Never, desist till we ... extinguish this bloody traffic, of which our posterity, will scarce believe that it suffered a disgrace and dishonor to this country.

    by Regina in a Sears Kit House on Tue Jan 05, 2010 at 09:45:08 AM PST

  •  Thanks for writing this thoughtful (7+ / 0-)

    diary. And thank you diary rescue...  

    Love is the lasting legacy of our lives

    by princesspat on Tue Jan 05, 2010 at 08:35:54 PM PST

  •  I think "Healthcare is not a commodity!" is a (3+ / 0-)

    great slogan, and we should use it more. Let somebody try and argue with that. Something to think about as we advocate for more reform in the future.

    ORGANIZE early, ORGANIZE often.

    by bicycle Hussein paladin on Tue Jan 05, 2010 at 08:42:30 PM PST

  •  One of the first jobs I had (4+ / 0-)

    was in the business office of a small community hospital in a isolated desert town. A Navy base next door provide that wonderful socialist health care for them. I remember suing no one for an outstanding bill. We hadd about ten doctors so there was an OB/GYN, a psychiatrist, surgeon, etc. I grew up with a family doctor that was a GP and have stuck with one my whole life.

    Even thought I got married right at the beginning of the Reagan administration I can't remember much else except the kids and spouse to recommend the '80s. The idea of the commons went out the window with the greed is good crowd.

    Anyone who has the power to make you believe absurdities has the power to make you commit injustices--François-Marie Arouet

    by CA Berkeley WV on Tue Jan 05, 2010 at 09:15:53 PM PST

  •  Excellent diary (5+ / 0-)

    What a well-written and thoughtful approach to the issue!

    We were somewhere around Barstow on the edge of the desert when the drugs began to take hold.

    by DParker on Tue Jan 05, 2010 at 09:31:13 PM PST

  •  Your most important point (7+ / 0-)

    I think the most significant point you make when it comes to the current health care reform debate is this:

    Our health care system has participants who use the system to generate profits. By definition, these participants want to take more from the system than they are willing to contribute; their goal is to maximize their benefits from the system while ensuring that the losses are spread among all the other participants. In other words, they drain the system of money and resources that could be going to care, but instead are going into their bank accounts.

    The current proposals are centered around using taxpayer money to help people buy private insurance.  This necessarily means that a portion of that money will go to pay for insurance company profit, overhead, and sky-high executive compensation.  Every single dollar that goes to those items is a dollar that is not spent providing care.  Those dollars are, by definition, wasted from a public policy perspective.  

    Everyone talks about how little money we have to spend on health care reform.  Everyone talks about our limited resources.  Yet no one seems to be able to come to grips with the simple fact that using tax money to pay insurer profits and overhead is throwing money down a rat hole.  

    As the diarist so trenchantly notes, the result of these proposals will be that money and resources that could be spent on care will be going to insurers' bank accounts.

  •  just read 2 paragraphs so far... (2+ / 0-)

    excellent point. I've been thinking of health care as a utility, rather than the marketable commodity, and I haven't been entirely comfortable with the concept.

    The idea of a "commons" (once ubiquitous in New England) is tantalizing...let me read on and think.

    Well done, and thanks.

    Plus ça change we can believe in.

    by papicek on Tue Jan 05, 2010 at 11:06:04 PM PST

  •  there's... (4+ / 0-)

    a component of how this should have been framed from the start, and should be framed in the future.

    Tipped, rec'd, and hotlisted. Excellent diary.

    Plus ça change we can believe in.

    by papicek on Tue Jan 05, 2010 at 11:17:38 PM PST

  •  private health insurance is arguably the most (3+ / 0-)

    profitable industry on wall street.


    Unlike most other businesses, the revenues of the private insurers include our own funds that essentially are held in trust for the eventual payment of medical claims - currently 85.2% as represented by their medical loss ratios.  Their business costs relate strictly to their product - the administrative services - currently 14.8% of their revenues.  Thus their profit margin, to make sense, should be calculated based on their business model of providing us administrative services, but not on the funds held in trust which involve negligible expenses but which provide them with long term investment income.

    Profits on the order of 25% rank this industry at the top of the list by this argument.

  •  Great Diary (2+ / 0-)

    I lament that we couldn't discuss some of the finer points in this article during the recent storm of stupid we called a "Health Care Debate".

    Thanks for a thoughtful essay.

  •  Great diary, very thought provoking. (2+ / 0-)

    Might explain something that's long puzzled me: basically the contradiction that as the need for medical services have gone up, the prices have skyrocketed.  But the added dual pressures of competition for profit from insurers, medical professionals, and facilities combined with a shrinking group of people with the financial capacity to afford their services makes much more sense.

    "Pro life" my ass!

    by jhop7 on Wed Jan 06, 2010 at 02:56:36 AM PST

  •  HCR should be a model for Caring for Gaia (1+ / 0-)
    Recommended by:
    Regina in a Sears Kit House

    Hi Bare Left,

    Wiki on Trag/Commons:

    "The tragedy of the commons ... describes a situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen."

    That kinda shoots the misreading of Adam Smith in the foot.

    But the plain facts are that, unlike the misreading of Smith, neither world resources nor a Single Payer Universal Health system will flourish IF Smith's "invisible hand" has anything to do with it. Unfettered self-interest, denialism and greed do not function within a finite system, Gaia or a health care collective resource. Dip too much into the water bucket before it self-replenishes, and "bang" you are outa luck. And being that it is Universal (a right, not a costly privilege) some people are going to use it as a way to get too many free face lifts, depriving the rest of us of necessary preventative health care.

    If we can't take care of ourselves health-wise, the gorillas (Ishmael), the dolphins and whales, and the honey bee are doomed. And when they are doomed, it's only a few more steps for us to go back to Gaia as a failed experiment.

    Ugh. --UB.

  •  Several years ago I wrote a story... (1+ / 0-)
    Recommended by:
    Regina in a Sears Kit House

    about the Tragedy of the Commons for kids. It is summarized here:

    Remember Hardin's "The Tragedy of the Commons? Here is a more familiar example of what we are doing about Global Warming, the Financial Credit Crisis, and the Health Care Reform debacle:

    "A Boy, Some Worms and a Fishing Pond"

    1. There was a boy who lives on a wooded property on which there was a secret hidden pond with clear, blue water that no one knew about. One Saturday he got the itch to go fishing with his bamboo pole and can of worms.
    1. He pulled in a "big one" and was so proud of himself. And he kept pulling in "big ones" week after week. He was amazed that such a resource was right in his back yard. His Mom and Dad praised him for his ingenuity and he got an extra cupcake every Fish Friday for his efforts.
    1. He told his best friend his secret. THEY went fishing another Saturday and pulled in a bucket full of "big ones". They drank some pops and now, with no place to pee, they peed into the pond.
    1. The word naturally went around the school house. Pretty soon a lot of little boys were pulling in smaller "big ones" with their bamboo poles and worms and peeing into the pond, too.
    1. Fathers heard about this incredible free lunch, and they came with their sons, but they pulled in even smaller "big ones". They peed and poured their leftover warm beers into the pond. They started using newer and better fishing poles with some new 'n' better $5.95 lures. Half eaten sandwiches, apple cores and plastic wrappers fell into the pond accidentally.
    1. A few Saturdays later, the little boy counted 23 people around the edge of the pond, with ever-increasing complex fishing poles and lure systems. 3 boats were seen in the center of the pond, where the water was deepest. They were all pulling even smaller "big ones" but they were happy as cats with canaries as they yelled across the pond to their friends, look what I got! And they all peed into the pond, too. They could be seen dropping trash, broken lures and empty buckets of chicken bones into the pond, accidentally, of course.
    1. The township commissioner arrived one Saturday, looked at the now filthy pond water, and told the people about his concerns. He said to be more careful and then he left. But Sunday morning, when everyone was at church, he himself arrived with his boat and an outboard motor. After a short time, he pulled out "old grandad," the fish that lived in the hole at the bottom of the pond. With a single hammer blow, he killed off "old grandad." He had a picture taken of himself with "old grandad" by the town newspaper photographer. His story was published during the next week.
    1. Next Saturday, there were a record 83 fishers at the pond with commercial nets, deep sea fishing rods, expensive bait, and sonar to detect the schools of fish that were sure to be caught when the net was dragged through the pond. But... nothing,  not even a minnow. All the net pulled up were old boots, beer cans, chicken carcasses, broken fishing rods, blasting caps, a pair of pants, a bowling ball and a 55 gallon drum of artificial worms.
    1. The Mayor of the town made a speech condemning the family who had the pond on their property. The father looked down at his son and whacked him on the top of his head. The Commissioner recommended that under the circumstances, nothing was to be done except creating some way to restock the pond with brook trout or river salmon to create a Township concession for pond fishing. He organized an LLC and bought a web site domain named after the town.
    1. Finally, out of desperation, the family sold the property to a developer. The developer cut down all the trees for lumber, stripped off the top soil for a landscaping buddy of his, and finally filled in the pond with rocks and clay from one of his other developments. The little boy got a business MBA, and the father was put into a nursing home facility. The Mayor became a State Representative and the Commissioner retired to a lakeside property in another rural state. He also has a boy who likes to fish...

    NOW. Multiply this little story by 100, by 1000, by 10,000. And consider the many activities we take for granted all over the world. And what you see is the totality of what we have done to ourselves by not regulating ourselves and our associates in the financial "pond" as well as in the natural "pond," our planet Earth.

    So, what do you you want? A planet Earth that looks more like the surface of Mars near the Phoenix lander? Or a lush, verdant Earth such as we had before we killed off the Cod, Tuna, Buffalo, Passenger Pigeon and Tasmanian Wolf?

    There you have it.

    Ugh. --UB.

  •  It's pretty ard to argue with this: (1+ / 0-)
    Recommended by:
    Regina in a Sears Kit House

    Treating health and heath care as a commodity is immoral. Profiting from the continued illness or death of another human being is unconscionable.

    But they will. And they do.

    Here I come to save the day There's no need to fear. Underdog is here! - attributed to the Republican of your choice (or at least partially, to Andy Kaufman)

    by Anthony Page aka SecondComing on Wed Jan 06, 2010 at 08:52:16 AM PST

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