Romneycare — so-called Obamacare — ruled constitutional

Healthcare costs are a millstone around the neck of the US economy: we spend twice as much as countries such as Japan, yet have over 50 million — 1/6^th — of our population without coverage, have public health metrics surpassed by some developing countries, and have regions of the country with little local access to healthcare even for those with insurance. In the subcomponents of the CPI (Consumer Price Index), medical care is often the item rising the fastest.

Health care provision in the US is enormously complicated, a crazy-quilt combination of medical professionals, insurance systems — which don’t always treat preventive care — hospitals that are non-profit and for-profit, medical practices that may be solo, a partnership with or without a nurse practitioner (rules for which vary by state), incorporated in a larger group, or employed by a hospital or health maintenance organization (HMO). Labs can be owned by doctors and hospitals — despite the conflict of interest — as well as by independent entities. Record keeping is not uniform, and health histories spotty; a doctor may not be able to get information from other doctors who have treated the patient in a timely manner, or be able to check what medications someone is currently taking.

Some of this comes from our history. Blue Cross began as an attempt to improve the financial system of Baylor University Hospital in Texas; it thus focused on surgery and other in-patient care. Universal coverage was initially delayed in the 1910s over whether it should be done at the state or the Federal level. In the late 1940s the issue was whether it would be handled through government, employers, or unions. Early insurance such as Blue Cross (and Blue Shield surgical coverage) varied from state to state, and by that time life insurers were also entering the field. (General Motors, for example, initially used MetLife, not the Blues.) Employers lobbied hard and successfully to be the ones in control of cash flow, but today they are running away as fast as possible.[Note]

All of this means that we can’t have a one-size-fits-all policy unless we also force (for example) uniformity in one or more areas of our hodgepodge. At least some incumbents will see their business disappear, and the political path chosen by Romney in Massachusetts was to leave the actual provision of healthcare — whatever piece it might be — as is.

So back to the issues. One is lack of coverage; the other is expense. Private insurance systems face the challenges of adverse selection, that purchasers of insurance will be dominated by those who are older or in ill health and believe they’ll need insurance. Those who are healthy are tempted to opt out. But doctors are socialized under the Hippocratic Oath. Our society as a whole is sympathetic. Hospitals can’t throw a patient out on the streets to die if they run out of money. We have Good Samaritan laws; malpractice leaves providers exposed to legal liability. So that means that, covered or not, those who are seriously ill get treated. The cost then falls upon those who are insured. And then more people either cannot afford coverage (if you’re on minimum wage!) or choose not to purchase it. Universal coverage avoids the downward spiral in coverage from moral hazard. Romneycare, enacted now at the national level, faced that issue directly.

Then there is moral hazard, the temptation of those, once insured, to be less cautious (e.g., auto collision insurance may make people less careful of how they park) or kin the case of medical insurance, to overuse it. Since fee-for-service coverage is the standard in the US, that really comes down to doctors providing too much care. It of course makes their practice (and hospital) more profitable, because patients aren’t provided with a menu and asked to choose. (Just the opposite: we are bombarded with advertising urging us to pressure our doctors to provide more.)

This is particularly important at the end of life, when it is not unusual for a terminally ill patient to receive hundreds of thousands of dollars of care in their last week of life. We do have hospice — my father chose that route, not wanting to die in a hospital, not wanting his suffering multiplied during his last day or two, and feeling it was just wrong to use all those medical resources simply because he had insurance. My mother, brothers and I concurred. Unfortunately many individuals refuse to face this issue, and in that case all it takes is one family member demanding “do everything you can.” See for example a recent front-page article from the St. Louis Post-Dispatch End of Life Care, run while visiting St. Louis for a niece’s graduation from her medical residency.

Then there is technology, were we clearly are facing diminishing returns. Cancer treatment has benefited above all from early diagnosis (which unfortunately is not easy with lung cancer, but is with the other most prevalent types of breast, cervix, prostate and colon cancers. Others — blood cancers — can often be cured, and then followed by bone marrow transplants. At least three family members have benefited from that, all at ages young enough to enjoy decades more of life. We can go on and on. But now we are at the point where new drugs as often as not merely improve on existing ones, and where better surgical diagnostic and surgical techniques allow us to address harder-to-treat heart conditions (which affect smaller and smaller slices of our population). It’s hard to see how to handle this from the standpoint of ethics — that Hippocratic Oath and its derivatives. Other countries do however try to see that new technologies are used only where there are very strong medical arguments in their favor, including likely years of remaining life.

The current Federal incarnation of Romneycare does little to address either moral hazard or the dilemma arising from costly new technologies. It will save us money, through better and earlier treatment, most relevant for younger patients. It thus leaves a lot to desire. However, it is a step in the right direction, and far superior to the alternative of doing nothing, and watch the insurance system continue to unravel as fewer and fewer employers provide coverage.

I have no answer to the puzzle of why the package is known by the sitting president’s name, and not by that of his challenger, who in fact was the one to put it together with the help of a variety of Republican think-tanks (back when think-tanks actually did spend time thinking rather than generating purely partisan twitter “bites”). I can understand, sort of, the partisan logic that has Romney opposing Romney care in the context of the Republican primaries, though I think it odious. I can’t fathom why the media is passive in the face of the effort to carry that into the general election.

Note: I wrote a paper on the history of healthcare at General Motors, presented at the Business History Conference in Milan Italy, the Society of Automotive Historians in Tugelo, Mississippi and published in Automotive History Review (2012).

Remember (not that many are old enough!) that until the 1940s there were no antibiotics and few other effective medications. Doctors could set bones, deliver babies and perform [by today’s standards] simple surgery. Staying in a hospital cost less than staying in a hotel. The main focus of healthcare was thus the provision of sick time, because the main out-of-pocket cost of illness was lost income, not medical expenses.