Douthat is Right, Health Care Debate Will Never End, But He Misdiagnoses Some Underlying Causes, Part 1: Other People’s Money

Ross Douthat predicts that despite Obamacare’s comeback from’s disastrous rollout, its failure to unravel and the failure of Republicans to repeal it, health care debate will never end: “What we should expect for years, decades, a generation: a grinding, exhausting argument over how to pay for healthcare.“ Health care policy experts tweeted their agreement.

Douthat is totally right that this debate will never end. And all his facts and analyses are correct too. But he mistakes “a society that’s growing older, consuming more care, and (especially if current secularizing trends persist) becoming more and more invested in postponing death,” a relatively small effect, for a big one. It’s not aging that is the big driver of health care spending growth but new and improved health care technologies driving up costs per person.

More importantly, Douthat fails to identify the underlying, inescapable reasons that, like the proverbial poor, a health care crisis will always be with us. Thus he fails to distinguish problems we can (eventually) avoid from those we can’t. And he conflates causes that affect all rich countries with those specific to the US. To avoid over-reacting to Obamacare’s problems and rushing into the arms of a snake-oil salesman promising the unobtainable…. to spot the Obamacare reforms which will help, we need to understand the reasons and distinguish the cases.

To help you do that, I offer, over four blog posts, a guide to why no rich country can avoid permanent health care crisis and why it is so hard to fix the US-only problems.

Part 1: Other People’s Money

When patients and their doctors make health care decisions—head MRI or no, bypass or angioplasty, fancy new insulin pump or an old one —they are spending other people’s money. This is an inevitable consequence of health insurance—and what makes it valuable. If we had to spend only our own money to buy a by-pass operation, a heart attack would mean choosing between ruined health and ruined finances.

Unfortunately, spending other people’s money has inescapable side-effects. Doctors and patients have no automatic reason not to spend and spend, unlike if they had to spend their own money. Therefore, all health insurance systems need a way to say, “no, that costs too much compared to the benefits.” Just as insurance protects the health and finances of those who get sick, cost containment protects the finances and everyday lives of those paying the premium or tax bills.

There are lots of approaches to cost-containment, but they all have side-effects. Insurers review planned tests or surgeries to decide if they are “medically necessary.” That’s a great way to make sure care is beneficial and there is not a cheaper effective option. But it takes up time. Worse, canned treatment plan recipes can miss important aspects of a particular patient’s case, leaving potentially valuable care uncovered. And there are the specialist referrals, limited networks, and other approaches to keep care—and the prices paid for it—down. Most people know someone with a (self-perceived) horror story. Since health care can be a matter of life or death side-effects are not to be dismissed.

Still the cure of (some) cost containment is better than the disease of unchecked costs consuming everything else we might do or invest in.

These debates about what health care to pay for and how to contain costs occurs in every single rich country, despite the diversity of systems.  In Britain, outrage erupts because standard cost-benefit calculations used to determine whether the National Health System will cover treatment show lower value for drugs extending the life of the elderly. In Ontario Canada, debate rages about contracting out low risk procedures to private clinics.  In the private US health care system, people fight their insurers on a claim by claim basis about what is “appropriate care.”

The cries of death panels and ads pushing seniors over a cliff that Douthat describes are just America’s politics’ version of fierce debates that inevitably occur with any health insurance—and occur in other countries.

The inevitable endless health care crisis should not blind us to the progress Obamacare made. Now self-employed cancer victims can enjoy good health and good finances. Soon, perhaps after another decade or so and if we are not scared into chasing some impossible health care system, we can look forward to the never-ending health care crises that other rich countries have.

Stay tuned for Part 2 on how medical care’s continued success means every country is in constant crisis about how to pay for our golden age, and Parts 3 and 4 on problems particular to the US, and how they are and are not solvable.


One thought on “Douthat is Right, Health Care Debate Will Never End, But He Misdiagnoses Some Underlying Causes, Part 1: Other People’s Money

  1. Pingback: Never-Ending Health Care Crisis, Part 2: Struggling to Pay for Stuff That’s Worth It—and a Possible Reprieve | DahliaRemler

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