It used to be better, so let's make it even less like it used to be

Nurse Ratched is, well, a nurse, and she is in support of a public option for health care. I think her point about rationing care is right on. We already do it, from not going to the doctor every time we cough, to GPs not pushing for a specialist consults when they are unlikely to turn up anything, to insurance companies not covering highly experimental procedures. The difference is that insurance companies ration payment while government would ration procedures. They are not the same thing, but that leads to my next point:

Everyone is in a rancor about the cost of health care, but I don't think that cost is the primary sticking point. If you told me that I could live to 200, but that I would have to spend 50% of my income to do it, I would find a cheap apartment and start eating Ramen every night. Wait, I do that already. But you get the point. People by and large are willing to pay for good health, and a dying man will clutch anything but his checkbook. The problem with the current system is uncertainty, because health insurance is not health insurance. Insurers will try to reject anything they can, and in the end you put in hundreds of hours for them to cover some percentage of your costs that is well below 100%.

She blames fat cat CEOs and shareholders, the usual suspects and everyone's favorite targets. She says that if they weren't taking home big salaries and profits this wouldn't be a problem. This is mostly true. But while she establishes the correct arguments, Nurse Ratched whiffs the conclusion. It is the same fallacy I pointed out in Malcolm Gladwell's piece a while back. She even points out the fatal flaw in her argument for us in her opening stanza:

I remember when nurses and insurance companies use to get along with each other. Back in the 1960s, these nurses even took time out of their busy schedules to pose for one of their ads. We took care of patients at the bedside, and the insurance companies paid the hospital bill. It was as simple as that, but then things started to change. It began with three little letters—HMO

The problem isn't private insurance, in other words, it was whatever happened that brought about HMOs. I contend that this was dense thickets of regulations. These made compliance too expensive for small, traditional insurers. They also put up roadblocks - literally - so that private groups could not deduct their insurance costs, and in fact could not even legally set up joint funds for medical costs. We have been steadily erecting barriers to entry and cutting down grassroots competition for nearly 50 years in medicine. If we had done the same thing in, say, education, imagine what the consequences would have been. Oh, wait. Nevermind.

The other thing the good nurse says is that we need a public option. She again preempts herself by noting that, uh, we do have a public option. We have several of them. They are called Medicare, Medicaid, SCHIP, and higher bills to cover free care for those who cannot afford insurance. Actually, it turns out that we all subsidize Medicare through the back door because they get to dictate rates rather than pay what is charged. So really, there is a huge amount of subsidy already in the system. Why does everyone think that a little bit more will dramatically lower costs?

In summary, I only see one problem with the current system, and that is the lack of ethics in actually paying out insurance policies. I don't think cost is a problem per se. I do think vastly greater competition would vastly improve the system, and unlike socialized medicine proponents I can point to an existence proof of a system in America that worked this way and worked well, nostalgia notwithstanding. You don't bring back the good old days by running away.