Health Care 1

The issue of health care has been center stage for months now. It is the centerpiece of the president’s legislative agenda and has generated a great deal of controversy. Amid all of the punditry and soundbites, I wonder if the actual issue (problem to be solved) has become obscured.

The first task of any systems analyst or engineer is to make sure you are solving the right problem. It may seem obvious, but I think that much of the angst associated with this, or any, political issue is that people already have the “solution” to the problem in mind. So their efforts are not so much focused on coming up with an answer to the problem as they are on selling their particular solution. Often such “solutions” are conveniently tied to political ideologies or economic self-interest.

The complexity of this issue becomes evident when you try and capture all of the justifications for why the health care issue is problematic. Some argue that access to health care is a fundamental human right. But such a statement is freighted with a lot of unanswered questions: What is the definition of “health care”? Is it the ability to go to a doctor when you are sick or injured and not have to pay for it? How sick do you have to be? Who makes that determination? What about elective medical procedures? What about preventative medicine? And then there is the question of what exactly constitutes a “fundamental human right”. Where do “human rights” come from? If access to health care is a fundamental human right, what about access to clean water or food? What about clothing and shelter? If one agrees that all of these are fundamental human rights, how does one define the degree to which they should be provided? Is it the role of government to ensure the granting of these human rights?

If the problem is focused on the basic economics of medical care (note that I switched from the term “health care” to “medical care”) then we might be honing in on the potential problem. If I am sick, but I think it’s just the flu, or if I sprain my ankle, I can make an appointment with a physician and receive an examination, a diagnosis, and a prescribed treatment. I expect to pay for it, but I know that it won’t bankrupt me. On the other hand, if I am injured in an industrial accident or a car crash, or am diagnosed with cancer during a routine visit to the doctor, the cost of paying for the medical care I will need will far outweigh my ability to pay for it out of my personal savings. That is why the concept of medical insurance was invented – to fill a specific need in our economy. A company pulls together a pool of people, all of whom share the risk that a small percentage of them will have a catastrophic medical expense. Each member of the pool pays what is called a premium, which is mathematically calculated based on the likelihood of members of the pool succumbing to statistically unlikely medical events (most people will not die of cancer or be disabled as the result of an automobile crash).

So, I’m thinking that there might be a number of Americans who don’t have such insurance, which is true. The figure being bandied about is 47 million. Of course, a significant percentage of that 47 million are people who could afford catastrophic medical insurance, but have opted not to acquire it. We may be getting closer to what the real problem is… What if the market for “major medical”, or catastrophic insurance, was unconstrained sufficiently such that market forces allowed enough competition in that market to drive “prices” for premiums to an affordable level? Of course, this raises the question of exactly what is considered “affordable”. This, then, reduces the problem space to one in which we are asking the question, “how best to allow premiums for medical insurance to find a level at which most Americans could reasonably afford to purchase such a premium (as they do with auto or homeowner’s insurance premiums)? If this is the fundamental question, then one must ask what is the role of the Federal government in bringing this about? If we are now assuming that the Federal government actually has a role in solving this problem, we must analyze the extent to which the government has participated in creating this problem in the first place. If it has, then the primary goal of government would be to extricate itself from contributing to the problem. This question must be addressed prior to the imposition of any governmentally-mandated solutions.