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:
- Over-utilization of the system by doctors and patients.
- 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 Forbes.com:
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. - forbes.com
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.
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