Why No One Can Really Win The Health Care Debate

As the noise over the debate over health care (er, health insurance) debate reaches ear-splitting levels, two things seem clear:

First, 'winning' the health care debate is impossible because the end results will vary different for each household.   Second, regardless of which side feels as if they have 'won,' health care, like most aspects of our lives, will evolve to meet the needs of any new markets.

While both sides moan in agreement that health care costs are a burden on the country (correct), they have very different reasons why they say it.  One side says the current health care  'public option' of Medicare and Medicaid underpays hospital and doctors what their services cost and thus private insurers must act as a de facto tax by making up the cost difference and thus spiking private insurance fees (again, correct), while the other side argues that health insurance companies have driven up costs unnecessarily by overdoing testing and denying patients with expensive conditions their fair care (once again, correct).

Meantime the 'third' side (if one can call it that) surgically removes the economic basis altogether and argues that health care is not and should not be about money, but rather about, well, health care and saving lives.   To deny that point is to fundamentally alter the discussion and enters into an ethical realm which calls more into question a debate over the merits of Adam Smith's Theory of Moral Sentiments rather than a rote discussion of have and have nots.   Philosophical debates, as we know, are also unwinnable by nature.

Despite the complexity of the health care debate, there are truly only three outcomes: 1) our system remains the same (unlikely), 2) our system remains largely the same with a tax on existing health care policies to pay for the uninsured to become insured (most likely) or, 3) the system is fundamentally altered with the addition of a nationwide government-run system (somewhat likely).

Whatever the outcome, one side or another will claim victory, but no one will really change the perceived two-tiered nature of health care.   Either the macro system will remain the same or it won't, but markets always adapt.   If more Americans become covered by government-mandated insurance, more Americans with the means will leave that system entirely and create a new, private health care market.

Witness again our favorite northern example, Canada.

As the New York Times detailed just two years ago, private medical clinics are surging in Canada.   Though health care in our neighbor to the north is considered 'free' (most people seem to forget 'free' just means pre-paid by someone's tax revenue, but that's another discussion), more Canadians are ready to cough up cash to be seen quickly by private doctors who exist on the margins of the system.    Those who can afford it can afford not to wait and choose not to, and more doctors are eschewing the system to become physicians to a select group.   They literally buy their way past the medical velvet rope and into a growing, exclusive private system.

It is those millions of Americans in the middle, those currently with jobs that offer them private insurance plans but who don't have thousands of extra dollars to spend on medical care who will endure longer wait times and more crowded doctor's offices.   That's the only part of the health care miasma that's irrefutable.  If mandatory health insurance becomes a reality, an estimated 30 to 40 million people will enter the world of insured health care and thus enjoy more regular medical visits.   Simple math tells us then that unless we create 20% more 'care capacity' or reduce the current level of visits and testing, scarcity of certain resources will exist and wait times will grow.   Whether that is an acceptable trade again depends on one's position and point of view and thus is another unwinnable argument on a singular scale.

The only other certainty is that whatever the outcome, someone will claim victory.   Parties will be thrown and barbs traded.   It is the sometimes sad, often beautiful nature of the American debate.

America though will go on.   And it will go on as it always has, using Schumpeter's idea of creative destruction to transform a perceived inefficiency by creating new markets.   If that new 'market' happens to be government-mandated health insurance, then the creation will come as it has in other national health care plans: uber-private medical care for those with the means.

The short-sighted view is that 'winning' the health care debate will be defined by some as what gets passed by Congress.    However 'winning,' like politics and real estate, is entirely local.   110 million households can each make their own determination of victory in the end.

Regardless of the outcome in Washington, some may gain and some may lose, but if a public option passes we can be certain of one thing - a private market will develop, catering to those who can afford to jump the line.   If doctors decide this is a better use of their own time than the long lines and mediocre payments for their services than the government provides, again the story of the American economy will be written as it has so many times; the middle class - those without the loudest voices between the haves and have nots - will end up bearing the greatest burden by seeing less for their health care dollar.

Whether that's good or not is in the eye of the health care holder.