Genetic Information, Health Insurance, and "Socialized Medicine"

Brad Delong provides an excellent blog about U Cal's genetic testing of students and the likely ways in which genetic information would be used by private health insurers, not to manage risk better, but to sort on it better, thereby defeating the ostensible purpose of insurance. Disease prevention and health promotion over the life cycle should and would be the objective of any health insurer likely to bear the costs of all your future illnesses and injuries. Of course, our fragmented US system does not provide the incentives to do this. The system most likely to align short and long term health risk management objectives (and (I would add) to reduce health care costs in the long run) is a single-payer system, which the US is not likely to have any time soon.

The problem with the current system is that if my genes predict a hip fracture at 70, the average private or employer-based plan should have little or no interest in incurring costs to prevent it since they are unlikely to bear those future costs. I will age into Medicare several years before age 70 and the costs will fall to the US (payroll-)tax payer. On the other hand, Medicare and US taxpayers have a real interest in preventing disease and promoting health over the life cycle since many of our (bad health) chickens come home to roost after age 65-67. Those of us who are younger and still working are on the hook for at least some of those costs or will face reduced future Medicare benefits because of their increasing share of national output.

As in the financial sector, private health insurers have offloaded much of the high risk (and costs) in health insurance markets onto US (payroll-) taxpayers, who pay for much of Medicare and Medicaid. These are two programs that became necessary because private markets failed to provide insurance for individuals and families characterized by high risk of medical expenditures: the elderly and the poor (who are often poor because acute and chronic health problems prevent them working). Mercifully, our ethics and our values require them to have access to health care. Hence, we have two government run programs: Medicare for those over 65 and Medicaid for those who are poor children, poor chronically ill adults, poor elderly adults in nursing homes, or poor pregnant women (with some variation in eligibility thresholds across states).

Yet the spectre of "socialized medicine" prevents us moving to single payer, where the incentives for prudent life cycle management of risk across all age and income groups would be better aligned. Why, when we already have what is in effect single payer for the elderly and the poor, do some believe that single payer is "socialized medicine" and why do they fear it so?

I gained some insight into this recently when an elderly relative started complaining about "Obamacare" and how it would lead to "socialized medicine." Knowing the person had heart surgery courtesy of Medicare and was receiving ongoing monitoring and care, I said, "I didn't realize you were so unhappy with Medicare." To which I received the reply: "I'm not talking about Medicare, I'm talking about socialized medicine."

"How is Medicare different from socialized medicine?" I asked.

"Medicare isn't socialized," came the reply. "I pay for it. I pay every month and when I've had surgery, I've had to pay some of it. Medicare is like any other insurance."

"Well," I said, "I know you're paying a premium for Part B and I know there are copayments and deductibles, but Medicare is a government run health insurance program."

To which the reply was: "But I'm talking about socialized medicine. You know that whenever the government gets involved in anything, it never does a good job."

"I had no idea you were having problems with Medicare." said I. "I always had the impression you were pretty satisfied with it. And with the VA, too. I know you've used the VA for some care recently. What problems have you had with Medicare or the VA?"

"Well, none with Medicare or the VA, but I'm not talking about Medicare. I'm talking about socialized medicine."

"So you're happy with Medicare?"

"Yes."

"Would you mind if your [adult] children could buy into it? Your son is unemployed. Would it be OK if he could buy into Medicare?"

"Well, sure. As long as he has to pay like I do."

You were all wondering how someone could say, "Keep your government hands off my Medicare?" Well, there you have it. Now that I've told you, I'm still not sure I understand it. It was one of the most frustrating and at the same time enlightening conversations I have had in a long time. The person with whom I was conversing is intelligent, educated, and not senile.

I'm just not sure how to use the above information. I was unable to persuade my elderly relative. I confess that since the conversation, I have despaired that the national conversation will ever be much better.

                          ************************************************

I will be taking a much-needed break for 10 days. If I can get access to WiFi from our remote lake location, there may be a post in the interim. If not, look for a new blog shortly after Labor Day. In the meantime, I look forward to all thoughtful comments. Thank you all for visiting, reading, and commenting. And thanks to my friend, Mike Lawlor, for managing the blog in my absence.

Comments

[The Raven]

Most people aren't in the debate; in Converse's survey, 84.5% don't reason about policy at all. See. Scroll down.

Given that, political activists need to rely on other ways of getting policy made. We may not all be doctors, but that doesn't mean we "deserve" malpractice.

[The Raven]

Oh, drat. See:
http://adviceunasked.blogspot.com/2009/08/scaling-malkin-in-response-to-krugman.html

And:
http://adviceunasked.blogspot.com/2009/08/thoughts-on-democracy-part-1.html

[Coises]

“genetic information would be used by private health insurers, not to manage risk better, but to sort on it better, thereby defeating the ostensible purpose of insurance.”

No, that’s exactly the purpose of insurance: to quantify risk as accurately as possible and then distribute the cost of covering that risk proportionately across the insured, while making a profit commensurate with the insurer’s risk and trouble. (Why proportionately? Because otherwise a competitor would be able to underbid you on some segment of your market and leave you worse off than if you did charge proportionately when that segment leaves your plan.)

“Mercifully, our ethics and our values require them to have access to health care.”

Which is humane and appropriate, but does not describe “insurance.”

I’ve noticed that the debate about “health care” is almost always really a debate about “health insurance”; and at that point it has already gone astray. I sometimes think that if we could ban the use of the words “health” and “insurance” in the same sentence, we might begin to get somewhere.

“You were all wondering how someone could say, ‘Keep your government hands off my Medicare?’ Well, there you have it. Now that I've told you, I'm still not sure I understand it.”

From what you quoted, it sounds as if your relative actually believes that his or her Medicare premiums are commensurate with what ordinary insurance would cost. Perhaps this person really doesn’t realize that the government subsidizes Medicare though payroll taxes. It’s not just government run, it’s government financed.

The other part of this, of course, is the American dread of “socialism.” I put it in quotes because it’s the word, not the concept, to which Americans react. I doubt that most Americans even grasp the concept. It means to them something like big, grey buildings with ugly, cold people dressed in grey who require you to fill out long, grey forms to request permission to buy a new toaster, which you might get in two or three years if you're lucky (and when you get it, it will be grey).

“Capitalism,” on the other hand, is treated like a religion. Americans act as if they believe that since money is power, if God allowed some person (or organization, or corporation) to have a whole bunch of money, He must have wanted him to have a whole bunch of power. It’s the Divine Right of Kings ( http://en.wikipedia.org/wiki/Divine_right_of_kings ) all over again.

The cherry on top is people’s astounding ability to rationalize. What they want to believe that applies to them is always the exception, and what fits their established beliefs about the rest of the world is never proved false by their direct experience.

Shit. As a race, I think we’re doomed. Thanks for reminding me. ;-)

[rjs]

i was going to say something about letting the likes of rush limbaugh and glenn beck control the national dialog, but ill just go with coises's assessment:
"Shit. As a race, I think we’re doomed."

[Kathy Garolsky]

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[Daniel Crawford]

I doubt if your aged relative is susceptible to rational argument, although by the same token it's not really her fault. Marcuse said it all in 1964 - see what he called "The Closing of the Universe of Discourse" in One Dimensional Man.

[John Emerson]

The lesson here isn't that Udall's relative is stupid. It's that 50 years of intensive right wing propaganda has defeated the liberalism. The right wing has almost complete control of the media; media "liberals" are centrists and media "centrists" are sane conservatives.

People have been whining about the media the whole 50 years, but no one has done anything, and whenever something like the Fairness Act or media monopoly comes up in Congress, enough Democrats cave in to ensure defeat. The Democratic Party itself does little or nothing to get its message out between elections, and confines itself to electioneering every two years, usually under crisis conditions requiring a move to the center (which is what the Democratic money people want). Elections are taken one at a time with no attention to the long term future.

Under Clinton the Democrats figured out a way to convert soft "party-building" money (long term) into immediate-term electioneering money. That was like eating the seed corn; "party-building" is what was needed. But Clinton made his career on the move to the center and didn't want party building, because a stronger party wouldn't have to be centrist.

That's the way the information economy works: you get the information you pay for (e.g., the spendy Financial Times) and people who rely on free and cheap media get precisely calculated disinformation. Freedom at work (in the Chicago School sense)!

[rjs]

as per usual, ive found someone who says it better than i could have; so ill give you james howard kunstler:

Of course, what has allowed Beck to occupy center stage is the failure of rational political figures to articulate the terms of the convulsion that American society faces, brought about not by communists and other John Bircher hobgoblins but by the forces of history. The failure at the political center is a conscious one of nerve and will, of elected officials in both major parties playing desperately for advantage in defiance of the truth -- this truth being that the USA went broke trying to swindle itself into prosperity. Add to this the failure of the law to go after the swindlers, which has undermined the fundamental belief in the rule of law that enabled this society to function as well as it did previously.
Barack Obama personifies this failure these days, a politician proclaiming "change" who not only managed to change nothing, but promoted a continuation of the national self-swindling with legislation so dazzlingly prolix and complicated that no one can claim to have read either the Health Care Reform Act or the Financial Regulation bill, the two hallmarks of his tenure so far, neither of which will change anything about how we do these things. Why Mr. Obama has turned out to be such a weenie remains a mystery. Even the former communists at Russia Today laugh at the idea that he is a "communist" or a "socialist" and so do I. He certainly appears to be hostage of the more malign forces in society these days -- the medical insurance racket, the too-big-to-fail banks, the multi-national corporations.

http://kunstler.com/blog/2010/08/one-lump-or-two.html

[Deb Schultz]

It's revealing that the elderly relative thinks he/she 'pays' for the Medicare care they are receiving. There seems to be no awareness of the huge subsidy which makes that premium affordable. It's also revealing that the elderly relative does not know that in many countries with 'socialized medicine', the user also 'pays' for the care received. EVERY user pays and every payer receives; that's the 'socialized' part of the dreaded 'socialized medicine'.

I think most people simply don't know how Medicare and Medicaid are funded and probably they don't really care to think much about it -- as long as they are receiving care, they don't, you know, care. Just so long as you keep your hands off 'their' Medicare.

[John Emerson]

"Socialized medicine" is a boogie man slogan which people have been trained to be horrified by. It has any meaning they want to give it, or no meaning, but it's a bad thing.

The bad guys took control of the public dialogue 30+ years ago. Ideas were not involved, it was all sound bites. Control of the commercial media by the owners and managers, plus a lot of subsidized propaganda from "think tanks" were what won the game.

Will Democrats and liberals learn to respond, even 50 years too late? Or will they just continue to sit and whine?

[Rad Onc MD]

The problem isn't the current level of care that Medicare provides. It is the fact that the program has a huge unfunded liability and we will not be able to pay for future promises at this level of care. And it seems you forgot that 1/2 of the story.

[dr2chase]

The answer, obviously, is to embrace the stupid: "Just say no to Socialized Medicine. What we want, is Medicare for all!"

There, that wasn't so hard, was it?

(Of course, the right-wing counter to this is that putting all those healthy younger people into Medicare, will bankrupt it, because everyone knows how cheap it is to care for the old, just look at their low premiums. So be ready for more stupid.)

One of the first rules of business that I ever learned, was that if selling something depends on teaching the (potential) customer, then you are not going to sell much.

[dr2chase]

@Rad Onc -

#1, as if any other health insurance did not suffer the same funding problem, and

#2, there is the hypothesis in the article, that in a single-payer system the single payer would have an incentive to care more about the future costs of the elderly, as opposed to the current system, where health insurers are happy to kick the can down the road, as long as down the road is past age 65. I can tell you that we develop some stupid habits when young (like sitting on our dead asses) that cost us when we are old (studies show larger benefits from exercise in the old, than in the young, measured as reduced mortality rate).

[rjs]

same story: its about who controls the national dialog:

"When our canvassers call on our members on their doorsteps, they hear Glenn Beck or Bill O'Reilly in the background," says Dan Heck, who heads a massive union-sponsored program in Ohio devoted to persuading its members to vote this November for candidates who would mightily displease Beck and O'Reilly. Heck's organization, Working America, was created by the national AFL-CIO in 2004 to reach out to white, working-class voters in key swing states such as Ohio, Michigan and Pennsylvania. "Right now, we talk to 25,000 people every week,"

http://www.washingtonpost.com/wp-dyn/content/article/2010/08/31/AR2010083104880.html

[Oliver]

I say make Steven Colbert President and have him abolish socialized Medicare! If reason doesn't cut through to the teabrains maybe fear will.

[pjcamp]

You must be using some unusual definition of the word "intelligent."

That person sounded pretty goddamn stupid to me.

[Jordan Flipsyde]

Better one suffer, than a nation grieve. (John Drydon, British poet)