October 7, 2009

The Real Reason Reform is So Difficult

Imagine you are on an ocean liner, well out at sea. There's plenty to do, plenty of choices to make. Perhaps you are thinking with anticipation about dinner. You might wonder how you look in your shorts. You think about someone you met. You have your own world, with its pleasures, challenges and preoccupations.

One day, as you are going to your next activity, the ship wide loudspeaker system suddenly announces the captain has decided to conduct daily evacuation drills. The alarm rings, and everyone has to find their life vest, put it on, and find and assemble at their designated lifeboat.

How would you feel?

If you are like most people, you'd feel a little disconcerted, and at some moment or two...or three, you might feel a little fear. You might begin to wonder just how safe the ship is. Is there a reason for these drills?

What if the afternoon bridge club you attend has some noisy talkers who don't like the captain much, and they start to claim that if everyone knows how to get to the lifeboats then it would create a rush to the boats in a real emergency and there might not be enough boats, and therefore those that are already are on the ball and already know where their life vests and lifeboats are will now actually become less safe, because now they have to compete with the mass of people who now will rush the boats. Later, as you lie down to sleep that night, perhaps you'd even begin to imagine floundering in stormy water in your life vest as the ship goes down.

But even without noisy talkers making up new fears out of thin air, just normal imagination alone would be able to come up with a fear or two.

While the lifeboat drills actually increase your safety, it is likely you would feel less safe in response to this new change.

Health care reform is like this, but worse.


Why worse?

Because of costs.

Before reform, cost was something we could ignore mostly. Costs were hidden to most people, most of the time. Mostly our employer paid those costs, and we simply went when we needed care, without consideration of prices.


Before reform, we didn't have to mull over daily the fact that our health care contributions and deductibles and co-pays just keep going up and up, or that our pay raise is small since employer health premiums ate it up. Our own health costs still seemed possible to tolerate, since it appeared our employers were paying most of the costs. Most of us did not have any major illness or accident to even test out these new levels of out-of-pocket expenses.

Serious out-of-pocket expenses were only theoretical for most people.

Besides, maybe the costs would stop going up next year, or next....

Maybe next year we'd start eating more healthy. Maybe we'd start working out.

That way those larger deductibles wouldn't be quite so scary -- you'd hedge your bets and hope to make it to 65 and Medicare before the big bills.

But...that would all be tomorrow. Next year. You wouldn't have to deal with it today.

You'd get some ice cream and settle down in front of the TV.

After all, your premiums for this month were already paid.


But behind our backs all these years, health care costs have been operating under a strange and powerful dynamic. We don't choose how much to pay and for what. Many people are at an all-you-can-eat health care buffet where someone else pays the bills, and you have to choose full buffet or nothing. Others look in from outside the restaurant, starving. Others eat and then get a bill at the end of the meal rather different than they expected. Planet Money has a nice podcast that illustrates some pieces of this health care pricing dynamic.


There are several pieces to how American Health Care became so very expensive (and what to do about it (also Mayo Clinic's version of good value-based reform is here)).

Overwhelmingly expensive.

Like houses (more on this later).

So expensive that health care itself has created a large part of the "middle class squeeze."

This feeling of being in trouble financially is widespread.

We are not talking about a minority of Americans...

Consider -- the fears in the electorate are all about cost and care:
  • Will I be able to afford health care next year, or two years from now, with premiums going up 8%, 10%, or sometimes even 15% or more?
  • Can I even afford my current health care premium right now?
  • Will I be able to afford to pay my other monthly bills if I also have to pay more for health care?
  • If my bills are already squeezing my household budget, how can I possibly help pay for other people over the years if reform passes and poor people get subsidies? If health care costs go up in general because reform provides more people more health care, then won't that mean higher taxes 5 or 10 or 15 years from now for me, and thus won't the squeeze I feel now will become overwhelming then?

The fear springs from the pressures on our family budgets right now, and where we feel things are going financially.

The reason this fear is strong is that Americans are already squeezed as noted here in January:
Slightly over half said that their household income provided them with just enough money to pay their bills.

Reform is difficult because over half of Americans feel a real financial fear right now, and so narratives in which health care reform is portrayed as doing little to control costs are viscerally frightening.

Not quite as frightening as being told that terrorists have been taking photos of your child's school. But...frightening enough. Frightening more on the order of hearing that your company CEO is on a trip to China or India to scout for some outsourcing. Ok, perhaps not quite that frightening, but....it's up there.


That reform would in fact greatly improve the health care security of most everyone can get lost in the fray when these types of fundamental fears are so active.

What can Congress do?

They can talk more about how reform will bend the cost curve, and lower costs for everyone in the future.


Different polls suggest different levels of support for reform, depending on how the poll question presents reform. Polls also suggest that simply adding a significant tort reform (such as a moderate cap on "non-economic damages") to the health care reform would increase public support, as would adding a "public option." Either one of these additions would bring in more support from the sides to add to that in the center. Both would guarantee reform popularity.

Meanwhile, the learning process is painful and slow, but progressing:

No comments:

Post a Comment