Snow Shovels and ObamaCare

The boys of summer are back, with all their aches and bruises and strains and trips to and from various levels of disabled lists.  The Washington Nationals are afflicted with injuries; manager Davey Johnson just sets his scowl and talks of “playing through pain”, while sports writers lament possible danger to the futures of struggling young players.  It reminds me of the famous (and my favorite) Far Side cartoon that showed two cowboys under attack from Indians with arrows flying everywhere. One cowboy with a huge arrow stuck through him is saying to the other, “Sure it hurts, Clem, but it’s a good kind of hurt.”  We laugh because it speaks to our moral ambivalence about the virtue of suffering.  Johnson obviously believes in the virtues of struggling on through pain.  He has converted in his mind a childhood game into an adult occupation requiring personal sacrifice.  So, what is a good kind of hurt anyway, and is there virtue in ignoring it?

Most economists would likely agree with Davey Johnson.  In the same newspaper, columnist Charles Lane laments attacks on the “Cadillac Tax” provision in the Affordable Care Act, aka ObamaCare.”  ObamaCare provides a tax exclusion to employers for the value of health care coverage provided employees, to encourage broad coverage. The Cadillac Tax provision places a surcharge tax on employer health care plans that are worth more annually than $10,200 for individuals or $27,500 for families. The surcharge is up to 40 percent on that part of the value over the limit, affecting about 16 percent of employer-provided health plans.  Lane notes that many economists lament the health care tax exclusion because it “unduly insulates” people from the costs of health care and “encourages excessive consumption.”  Lane thinks the Cadillac Tax is a good provision because it discourages employers from overly generous health care coverage.

Of course, citing economists as authorities on justice or generosity can be shaky.  My favorite current economist Joseph Stiglitz reports a Chicago economic survey in which people were asked whether it was fair to raise the price of snow shovels immediately after a big snow. 82 percent of the general population said no, but only 27 percent of economists thought it unfair.  Apparently, excessive consumption of economic theory without compensating ethical grounding can unduly insulate young minds from the realities of moral living.  Economists, like baseball managers, are alert to the “moral hazard” of making life too easy for struggling people, but have a tin ear for justice or for future externalities.

To his credit, Lane recognizes that an ideal solution would be national health care not tied to particular employers, but still maintains that “gold plated” health coverage is to be avoided.  The idea that all people, not just the privileged few, could merit “gold plated” health care never seems to cross his mind. He is instead concerned with excessive costs, which he equates with excessive coverage.  He seems blind to the fact that the U.S., while first by far internationally in per capita health care costs, ranks about 30^th internationally in health care efficiency. We spend over twice as much per capita on health care as do other advanced countries, for far less results.  According to a 2010 international study, “Compared with six other nations—Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom—the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives."  We in effect ration health care today by denying coverage to about 15 percent of our people, and we provide many of the rest with just enough coverage to continue “playing through pain,” not to resume healthy lives in the present or in the future.  The solution is not less coverage but more, provided at substantially lower costs though improvements in efficiency.  Then, a “Cadillac Tax” would perhaps be meaningful, but possibly unnecessary.

The avenues for such improvements are obvious, from transparency to regulation of drug developer and equipment manufacturer charges – no more “educational seminar trips to Hawaii or Bermuda” as a cost charge off – to negotiated provider rates to hospital error reduction to greater emphases on prevention.  But we fail to follow them because of self-induced ideological blindness and acceptance of inappropriate goals.  The blind acceptance of laissez-faire minimal regulation is literally killing millions of us.  And the unthoughtful acceptance of economic goals is equally dangerous. Inefficient medicine contributes to our GDP even as it weakens us, but we subsidize the organizations that provide it and applaud their contributions to GDP.  The future higher health needs of employees after retirement occasioned by current neglect due to poor coverage are just externalities to the employer. Let Medicare deal with it, so we can blame the government for its higher costs.

Summer, with its vacation schedules and cook outs and baseball games is a good time to reflect on the joys of places other than the office.  Lemonade and snow shovels both remain cheap.  Personal sacrifice may involve giving up a nap to go to a festival.  We appreciate that life means more than “playing through pain.”  It’s time we realign our health care aspirations and priorities to reflect that also.