If you watch American television, and if you're an American the chances are very high that you watch A LOT of American television, you've doubtless seen the Sprint "direct connect" commercials about "what if delivery people ran the world," or "what if lumberjacks ran the world," etc. The object is to sell "direct connect" cell phones by applying the problem solving ethos of a certain profession like lumberjacks to problems outside lumberjacking such as family court.
I want to ask a different question, and that question is:
WHAT IF TRIATHLETES RAN THE WORLD?I'm going to apply this question to the issue of health care financing and reform. The purpose, beyond being to entertain, is to point out questions and issues that should be front and center in any discussion about health care, and which neither the agents of reform nor the opponents of reform are adequately addressing.
First, if we know anything, we know that triathletes are the science geeks of the athletic world. We are, after all, the folks who brought heart rate monitors, power meters, aero bars wetsuits and aero helmets to the mainstream endurance sports. Thus, if Dave Scott or Mark Allen were tasked with overhauling health care, they would first take note of certain laws of economics and policy that are as immutable as Newton's laws of motion. Keep these laws in mind throughout the rest of the rant, because just as physical laws of the universe affect how you move through space, these laws affect whether any policy idea is a good idea. The laws are two:1. THERE IS NO FREE LUNCH.
2. YOU GET MORE OF WHAT YOU SUBSIDIZE AND LESS OF WHAT YOU TAX.
Taking the first "law": there is no free lunch. This is really just the law on which all of economic theory rests. Economic choices are merely the result of individuals or groups with unlimited desires deciding how to prioritize those desires consistent with their limited resources. The point of this next part of the rant is just to get you to put down the electric Kool-aid. What I hope you conclude is this: we have to carefully and wisely marshal very limited resources to handle a very expensive problem.
Electoral politics is the art of persuading individuals and populations that this "no free lunch" law does not exist: you can have everything you want and there will be no consequences and and it will not cost you anything. It has taken numerous forms over the decades regardless of party:
Reagan: the promise to eliminate the deficit by cutting waste and fraud in government.
Bush 41: "Read my lips: no new taxes."
Clinton: Promising consequence-free FHA home loans to low income families -- who are now in default at astounding rates to the detriment of the world economy.
Bush 43: American troops will be greeted as liberators in a short, clean Iraqi campaign.
And not to pick on the Messiah or anything, but the campaign statements on health care are full of this sort of thing: We will cover everyone and it won't really cost anything because we'll pay for it by eliminating (i.e., Ronald Reagan) waste and fraud in Medicare and (i.e., Bill Clinton raising taxes on "The Rich."
No one should have believed the "free lunch" promises from any of this President's predecessors, and one should not believe the current variety now. The plain fact of the matter is that you could confiscate all the income of everyone making over $250,000 and not pay for the current federal budget without the expense of health care. Moreover, Medicare reimbursement rates are already so low that medical students wishing to make a living no longer pursue gerontology as a specialty. As a result, the average gerontologist in America is himself rapidly approaching retirement age.
A scientific triathlete, therefore, upon hearing such nonsense would immediately conclude that someone had just attempted to repeal the laws of gravity by the power of his own voice or told him he could expect to do an 8 hour Ironman without significant training. He or she would conclude that rather than count on this coming true, we must take for granted that "there is no free lunch." Again, the conclusion: we have to carefully and wisely marshal very limited resources to handle a very expensive problem.
So, how do we spend currently our health care resources in this country? The answer is fairly clear: we spend an astounding amount of money on lifestyle-induced chronic diseases--expensive, life-long illnesses we acquire by our own choices.
Let's take just one example: Type II Diabetes. According to one source I heard this week (and I'm sure it depends upon how one counts), 40% of all of our health care expenditures are related to treating this one condition and all of its complications. There are an estimated 23.6 million people in the U.S. (7.8% of the population) with diabetes with 17.9 million being diagnosed, 90% of whom are type 2. With prevalence rates doubling between 1990 and 2005, CDC has characterized the increase as an epidemic.
It's no mystery where Type II diabetes comes from.
Type II diabetes is the type you choose--the type you earn through lifestyle, diet, and obesity. If (as is reported) health care is 20% of our Gross Domestic Product, this means we spend approximately 8% of our entire gross domestic problem on this one aspect of being lazy fat arses.65% of American adults are overweight or obest. That's nearly two thirds, people. This means it is normal to be unhealthy. The flip side is that it is abnormal to be a healthy weight. In fact, only one state (God bless you Colorado) has an obesity rate lower than 1 in 5:
You can click here to see how the obesity rates have exploded over time. During that time, Type II diabetes, long thought to be a disease of adulthood, has appeared with alarming frequency in children as childhood obesity rates have risen.
And this is just one example of one lifestyle-induced chronic disease. Obesity and sedentary lifestyles are also related to osteoarthritis, cancer, heart disease, depression, disability insurance claims, blah blah blah. It's no secret how to prevent any number of conditions of this type:
Healthy habits and choices--often times with lots of outside support and intervention because this is admittedly hard work. This brings us to the second law, which works on opposition to making hard but good choices. We not only fail to enable the making of good choices, we are actually paying people to make bad choices.YOU GET MORE OF WHAT YOU SUBSIDIZE AND LESS OF WHAT YOU TAX.
One example of this law is the obesity crisis itself and government subsidies for the ingredients of fast food like corn (high fructose corn syrup), grains, soybeans, etc. rather than broccoli, spinach and organic free range chicken. Another is the moral hazard posed by any type of insurance.
If someone else pays for the financial consequences of your bad lifestyle choices, you are insulated from the costs. You have less incentive to choose wisely. Even worse, if the government is paying those costs with other people's money--healthy people's money--the government has instituted a policy of taxing health and subsidizing chronic disease. (This same phenomenon was reflected in the problems behind the fee for service system: the doctor gets paid more for doing more, whether or not it is truly necessary, and the patient does not care because the costs were largely born by his employer and his insurer.) This will not "bend the curve" of health care inflation. To the contrary, it will keep it on the rise. And back to "no free lunch," at one point, it has to be paid for.
S
o, if Triathletes ran the world, what would they do? They would turn these laws to work on the problem. If poor lifestyle choices were directly reflected in the cost of one's health care, you would be get less of what you tax. If it were expensive to be fat--instead of the government paying for your electric scooter or your insulin--people would get skinny. If your coach and your masseuse and your physio were fully paid for, you'd get more of what you subsidized.
Mark Allen or Dave Scott might well make your diabetes coverage contingent upon inspecting your training log and food diary. But an insurer (government or private) might well make your health premiums increase as your BMI increases, or might have higher deductibles for all lifestyle diseases. (Our current insurance plan already charges me an exhorbitant deductible for Mrs. Greyhound's home injectibles for a non-lifestyle disease because it is trying to make insulin injections more expensive.)
"How dare they," some of you are saying. "It's none of the government's business how much I weigh or what I eat or what my cholesterol numbers are." Ah, but there's the rub, my friend. This is the flip side of taking the government's money: if Uncle Sam pays the piper, Uncle Sam gets to call the tune. And the closer we move to a single-payor system, the more Uncle Sam will call the tune. Indeed, it is actuarially sound for any insurer, government or otherwise, to charge high risk individuals higher premium. It would be morally hazardous and financially foolish to institute a system that failed to do so. That's why teenagers and habitual speeders pay more for auto insurance and why it costs more to insure a house on the coast or on a fault line. Duh.
The other half of you are asking, "Why don't we do that already? Why should I pay for the health care costs of some fat arse with a smoking habit?" Why? Because it is currently illegal to do make individual risk assessments in group health insurance.
Because of the historical accident of wage and price controls during WWII, most Americans get their health insurance through their employment. (Employers of the era dcould not give raises, but they had to compete for scarce labor while the men were off in Europe, and so they began offering health care coverage. We never broke the habit). Under the Employee Retirement Income Security Act of 1974 (ERISA) and other federal laws that regulate employee welfare benefits, the insured groupr can only be determined by those who are "active at work" when they sign up for benefits, and risk analysis is illegal. Oh, and all that talk about "pre-existing conditions," such exclusions are already illegal under the Health Insurance Privacy and Portability Act (HIPPA) for employee health insurance. (I don't recall the President pointing that out in selling insurance reform to town halls full of people who mostly get their insurance from private employers.)
Ever heard anyone on either side of the debate talk about ERISA or HIPPA or the moral hazard or lifestyle chronic disease. I didn't think so. As long as they don't, we are courting a system that is primed for demographic and actuarial and political melt down.
Most people in this economy do produce and are reasonably satisfied with their health care. (Granted, many are unaware of the problems baked into the system and have given it very little thought). Among the people in this system are a whole gaggle of baby boomers who are getting older and largely fatter and sicker by the day (except for those baby boomers who can and do regularly kick my slow skinny arse at the races). In the big picture, we are contemplating taking money from people who produce (and from people who don't need health care, for that is the nature of insurance and risk spreading) in partial subsidy of people who don't produce and who, in the final analysis choose to be sick. The solution is not to fail to provide health coverage at all, for "there is no free lunch" and those costs will be born in some fashion. But "free health care for everyone" is not an option either.
If someone else pays for the financial consequences of your bad lifestyle choices, you are insulated from the costs. You have less incentive to choose wisely. Even worse, if the government is paying those costs with other people's money--healthy people's money--the government has instituted a policy of taxing health and subsidizing chronic disease. (This same phenomenon was reflected in the problems behind the fee for service system: the doctor gets paid more for doing more, whether or not it is truly necessary, and the patient does not care because the costs were largely born by his employer and his insurer.) This will not "bend the curve" of health care inflation. To the contrary, it will keep it on the rise. And back to "no free lunch," at one point, it has to be paid for.
S
o, if Triathletes ran the world, what would they do? They would turn these laws to work on the problem. If poor lifestyle choices were directly reflected in the cost of one's health care, you would be get less of what you tax. If it were expensive to be fat--instead of the government paying for your electric scooter or your insulin--people would get skinny. If your coach and your masseuse and your physio were fully paid for, you'd get more of what you subsidized.Mark Allen or Dave Scott might well make your diabetes coverage contingent upon inspecting your training log and food diary. But an insurer (government or private) might well make your health premiums increase as your BMI increases, or might have higher deductibles for all lifestyle diseases. (Our current insurance plan already charges me an exhorbitant deductible for Mrs. Greyhound's home injectibles for a non-lifestyle disease because it is trying to make insulin injections more expensive.)
"How dare they," some of you are saying. "It's none of the government's business how much I weigh or what I eat or what my cholesterol numbers are." Ah, but there's the rub, my friend. This is the flip side of taking the government's money: if Uncle Sam pays the piper, Uncle Sam gets to call the tune. And the closer we move to a single-payor system, the more Uncle Sam will call the tune. Indeed, it is actuarially sound for any insurer, government or otherwise, to charge high risk individuals higher premium. It would be morally hazardous and financially foolish to institute a system that failed to do so. That's why teenagers and habitual speeders pay more for auto insurance and why it costs more to insure a house on the coast or on a fault line. Duh.
The other half of you are asking, "Why don't we do that already? Why should I pay for the health care costs of some fat arse with a smoking habit?" Why? Because it is currently illegal to do make individual risk assessments in group health insurance.
Because of the historical accident of wage and price controls during WWII, most Americans get their health insurance through their employment. (Employers of the era dcould not give raises, but they had to compete for scarce labor while the men were off in Europe, and so they began offering health care coverage. We never broke the habit). Under the Employee Retirement Income Security Act of 1974 (ERISA) and other federal laws that regulate employee welfare benefits, the insured groupr can only be determined by those who are "active at work" when they sign up for benefits, and risk analysis is illegal. Oh, and all that talk about "pre-existing conditions," such exclusions are already illegal under the Health Insurance Privacy and Portability Act (HIPPA) for employee health insurance. (I don't recall the President pointing that out in selling insurance reform to town halls full of people who mostly get their insurance from private employers.)
Ever heard anyone on either side of the debate talk about ERISA or HIPPA or the moral hazard or lifestyle chronic disease. I didn't think so. As long as they don't, we are courting a system that is primed for demographic and actuarial and political melt down.
Most people in this economy do produce and are reasonably satisfied with their health care. (Granted, many are unaware of the problems baked into the system and have given it very little thought). Among the people in this system are a whole gaggle of baby boomers who are getting older and largely fatter and sicker by the day (except for those baby boomers who can and do regularly kick my slow skinny arse at the races). In the big picture, we are contemplating taking money from people who produce (and from people who don't need health care, for that is the nature of insurance and risk spreading) in partial subsidy of people who don't produce and who, in the final analysis choose to be sick. The solution is not to fail to provide health coverage at all, for "there is no free lunch" and those costs will be born in some fashion. But "free health care for everyone" is not an option either.
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10 comments:
Mostly I love this except for a big problem. Not all fat people are fat because of diet. So to enforce the 'you are fat therefore you pay more' provision you need a way to tell the fat and lazy from the genetically fat. And that's probably expensive and most fat and lazy people will claim genetic fatitude. In principle this is a great idea, thoug. All we need is really good, efficient diagnostic tools around fat and we're there!
Just to be clear , not all Diabetes type 2 people are because of lifestyle choice. A person can live a healthy lifestyle and still develop type 2. Having said that, most are because of lifestyle. I forget the #'s
Good Rant!
Again, diabetes is just one example. We are killing ourselves with a number of self-induced diseases that we expect others to pay for. In my own family, my mother is pre-diabetic with high blood pressure and osteoarthritis and loves to play the "who's gonna take care of me when I'm bed ridden" when she ought to be choosing to avoid the sick bed altogether.
All I know is that I don't want to pay for the voluntarily idle who make bad lifestyle choices.
If there is a list to sign up for this, some people for the plan can gladly do so. I don't.
Yes, bad things happen to healthy people. I have had Grave's disease, hubby has had avascular necrosis and a hip replacement and rheumatoid arthritis. And you know our lifestyle choices. We also choose to work hard and pay our own way.
Oh and great insightful post by the way. You should run for SOME kind of office!
It was a great rant. I didn't mean to imply it wasn't. My personal rant is that we seem to want to spend a ton of money educating children about nutrition when it is their parents who pretty much choose what they eat. I say leave the kids alone and focus on the parents and make them feel like crap for destroying their children's health.
But there's an issue with that that has to do with availability and affordability of good food vs. junk food for the poor. It's all very complicated.
So really there are multiple rants and as a rant against educated, middle to upper class people yours is spot on.
Well put. Fortunately some companies "get it"
Here's a WSJ article from the CEO of Safeway. They started pricing health insurance similar to auto insurance (the better your behavior, the less you pay) and have kept their per-capital health care costs FLAT since 2005.
That's a pretty honest and simple assessment of the problem. At the very least I hope people start their discussions around this area instead of mouthing general banalities like death panels and such.
This is a complex problem but like any problem can be tackled by having a plan to start and executing it. Like any good execution, you tweak the plan as things come up. Sometimes I forget if all of us even agree on the end goal among all these arguments.
Love the post. I think a lot of it can be summed up with self-reliance. Our society was founded on the idea of self-reliance. We're slowly moving away from that to an idea of everything being provided. People talk about rights (right to free speech, right to health care, what have you) but never about the responsibilities that come with those rights.
Okay, enough of my own rant. Getting off the soapbox.
Good rant. I have many of the same feelings that you do. I am boggled when I see a person that I have not seen in a few months and who had a major health scare such as cancer, heart attack, or bi-pass surgery and the weight that they took off, by fear and order of the doctor, is all back on and they are back to a point where their health is in danger again.
I do think that part of the problem is that many Americans are more focused on the almighty dollar and how to get more of them that their personal health and the health of the ones that they love takes a back seat to getting ahead and having more.
Hmm...I guess less is more.
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