In the battle for universal health care, there are no winners

Pharmaceutical industry writer and blogger Stella Daily has written the following insightful analysis of the problems with health insurance as currently implemented:

In the battle for universal health care, there are no winners

As the 2008 presidential election approaches, the Democratic hopefuls are arguing about health care. Each candidate claims that his or her plan will lower costs and provide coverage to more Americans. Nowhere is the question asked: should universal health care be a goal at all?

Apparently, American politicians have learned nothing from the examples of Canada, the UK, and the like. Canada and the UK provide health care to all citizens -- or do they? In fact, while the national health services of both countries technically guarantee care to citizens, the reality is long waits for even the most basic services, a chronic shortage of healthcare providers, and technology that lags behind that of the US. This is no accident -- not that American politicians have figured that out.

Instead of asking how we can provide health insurance to each and every American -- since providing it to each and every Canadian and Briton clearly has not worked -- why not ask instead whether health insurance as we know it makes any sense at all?

Compare health insurance to other types of insurance with which you are familiar: fire, car, homeowner's, etc. What does insurance typically cover? When you buy car insurance, for example, you buy coverage for the catastrophic costs of highly unusual situations: the cost of replacing your car and paying medical bills should you be involved in a serious accident, for example. What you don't buy is "insurance" to pay for gasoline, oil changes, or even a part that won't wear out until the car has been driven for ten years. It wouldn't make sense to do so -- in order for the insurance company to remain in business, it would have to charge you the cost of those routine supplies and repairs, plus a premium for the salaries of its workers, the rent for its office building, and other costs, not to mention profit. So if car insurance covered gas and routine maintenance, its cost would go up astronomically. It would no longer be "insurance" for an unpredictable catastrophe, but a regular maintenance fee -- and it would cost more than covering regular, predictable expenses yourself.

Health care is no different. Health "insurance" as we know it covers not only truly catastrophic, rare events (such as a cancer diagnosis or a heart attack), but also a vast array of predictable, regular expenses like birth control pills, annual checkups, and psychological therapy sessions. Americans could save money by planning and paying for these expenses out of pocket, and saving health insurance only for the rare healthcare crisis.

I'll use myself as an example. I've been in the work force for seven years now. Throughout those seven years, my employer and I have paid, in total, about $400 per month, or $4,800 per year, for my health insurance. So, that's a total of $33,600 paid for my health insurance.

How much health care have I gotten for that amount? I'm a very healthy 29-year-old who doesn't engage in risky behavior: I'm in a monogamous relationship, I drink perhaps once a month, I don't smoke, and although heart disease runs in my family, I do my best to lower my risk by exercising five or six days a week. I see my gynecologist once a year (and I'd probably see him less often if prescription drug law didn't require me to come back every year to get my birth control pill prescription). Including the Pap smear he performs every year, that's about an estimated $300 per visit, or $2,100 in the last seven years. My birth control pills are partially covered under my insurance; that's another $500 per year, or $3,500 total. I visited the emergency room for a fainting spell that turned out to be dehydration earlier this year; the bills from that visit added up to about $5,000. I see a doctor at most once a year if I should happen to get a cold I can't shake. Let's call that $150 per visit, or $1,050 total. I'm usually prescribed penicillin at these visits, which my insurance does not cover because it costs less than my co-pay.

Add all of those medical bills up, and you get $11,650...which isn't even close to the $33,600 that my employers and I have put into the system. The rest is used by my insurance company to pay for other people's care -- other people who are probably engaged in more high-risk behaviors than I am. Why should I pay for that? And it is I who am paying, even though my employer shoulders most of the cost on paper -- that $4,800 per year could have gone to my salary. Given my druthers, I'd drop the plan I have in favor of catastrophic coverage to take over at, say, the $25,000 mark, the point at which my savings would be strained by a medical emergency. Such coverage would run me less than $100 per month -- so the total bill for all the care I've received to date, plus the cost of catastrophic coverage, would still fall short of what I've actually paid.

The obvious liberal response to my example is: But you're low risk. What about people who aren't so lucky?

First of all, it isn't entirely luck; a great deal of my good health is due to my good choices. If Americans weren't insulated from the cost of their lifestyle choices -- if smokers had to pay more for health insurance because of their higher risk for lung cancer and other health problems, if the obese had to pay more because they're more likely to require treatment for apnea or request a gastric bypass, if IV drug users had to pay more because they're at higher risk of infectious diseases -- then perhaps they would choose to modify their lifestyle to save some money. Furthermore, even for the high-risk individual, insuring for regular expenses still doesn't make sense. The insurance company has to stay in business; how will it do so if not by adding a premium to what those regular expenses normally cost? And, most importantly, a person's high risk for health problems does not constitute a claim on anybody else's time or money. Healthcare is a good, not a right; it has to be traded for like any other good, not extorted from the pockets of others. For those who cannot pay their own expenses, family, friends, and private charity may be inclined to benevolently help out; but even if they don't, the sick and indigent do not have a claim on the well and the wealthy.

This is why socialized medicine -- even socialized medicine dressed up in the guise of "private insurance" where the insurers have no right to select who gets covered or how much they pay -- can never work. It has not worked in Canada or the UK, and it will not work in America. Would that there were a presidential candidate who understood that.

(Disclaimer: FIRM is a nonpartisan organization and does not support any particular political candidate or party.)