The Healthcare Continuum

I recently listened to the Affordable Care Act arguments before the Supreme Court. The legal arguments are very interesting, but I’m not a lawyer so I will try to stay away from them here. My bet is that the mandate will get overturned 5-4, community rating and guaranteed issue will fall with it but the vast majority of the rest of the act will stand, including the medicaid expansion. The arguments were fascinating, however, there is an argument that I wanted to hear and which didn’t come up much: healthcare is a continuum.

The supporters of the mandate have largely been allowed to frame healthcare in a binary way: You either get treated or you don’t. That allows them to paint a very clear picture of the healthcare market: “Everybody at some point in time will get sick and need healthcare. If they don’t have health insurance at that point, somebody else will pay for it. Since nobody knows when they will get sick we must mandate that they have health insurance all the time.” Some examples brought up during the arguments were people needing a heart transplant or being hit by a bus. In effect, what they are saying is that you don’t chose to purchase healthcare, that decision is thrust upon you by life events. All they are doing is regulating its financing.

This argument however ignores a very important point which is that healthcare can be purchased on a continuum of cost and quality. For instance, if you feel chest pains and walk into an ER, there are a wide variety of tests available to determine whether you have a heart attack or not. Some of those tests are relatively cheap. But if those turn out negative, more expensive tests might reduce the risk of a false negative further and further. So now the question is not: care or no care? The question is: What care and at what cost?

When looking at that world, many of the arguments by ACA proponents fall away. It is not true that our healthcare expenses are fully thrust upon us by life’s events. When feeling chest pains, some of us may opt for the full suit of scans, while others might chose to take a few extra days off with loved ones. Either choice might be sensible and there is no reason to assume that everyone would make one choice rather than the other. And yet, that is the choice ACA proponents assume away and wish to legislate away. That is fundamentally problematic, because while experts may know their topics quite well, the trade-offs between vacation time with loved ones and a slightly increased chance of heart attack problem detection, are not questions of fact. Those are questions of personal preferences.

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5 Responses to The Healthcare Continuum

  1. Joe Seydl says:

    I don’t follow this at all. The issue is whether one has insurance or doesn’t have insurance. If one has insurance, he will be more likely to walk into an ER when chest pain arrives. If one doesn’t have insurance, he will be less likely to walk into an ER when chest pain arrives. It’s the insurance that dictates the choice in your example, not personal preference.

    The choice to purchase insurance is very different than the choice to walk into an ER when chest pain arrives; because choosing to forgo health insurance imposes a cost on those who choose to purchase insurance. Obviously, this is where the individual mandate comes in. I like how you try to shift the conversation to one of a choice of care and not a choice of insurance, but the world does not work this way.

    Say there’s an unemployed worker who is uninsured and living on food stamps. If this worker suddenly felt chest pain, of course he would love to walk into an ER and get tests done. He may still do this, even without insurance. But the fact that he doesn’t have insurance will weigh heavily on his decision to walk into the ER. There’s no way to get around this, unless we lower the cost of insurance so that this worker is able to still purchase insurance, even with little to no income. This is what the individual mandate hopes to achieve: A lower cost for health insurance, by pooling risk through many more purchasers.

  2. Steven says:

    I don’t think that the argument ‘falls away’. It seems like focusing on the degree to which we can manage our own costs in certain situations misses the point.

    There is a non-zero chance that any one of us will be involved in some accident where we are rushed to the ER and treated in a manner that is mostly out of our control. If I get in a car accident or struck by lightning, I don’t have a heart-to-heart with my doctor before she does anything. Because I know that in these instances I will get treatment no matter what my health coverage is, I have health insurance. If I don’t buy my own, then I’m just letting hospitals pay the cost for me.

    Healthcare centers budget for patients with no coverage. That is, they consider the distribution of possible expenditures on treatment of the uninsured. If I don’t have coverage, then I increase the expected costs that health care centers will have to eat up and so I am, whether I ever get injured or not, getting free health insurance at the expense of other people.

    I wish the government had done a better job of arguing this point. We all have some type of health insurance. People with private insurance pay for their own, and those without it let others pay for it. What they want to do is make people pay for what they already have.

    • PrometheeFeu says:

      First, I think it’s important to note that the ACA individual mandate covers a lot more than what ERs are required to do. An estimate presented during litigation showed that for the relatively young uninsured demographic, they have healthcare expenditures that average $800 to $900 per year. Yet, because the individual mandate requires very extensive coverage and those people are lumped in a riskier pool, they would have to pay between $1,500 and $3,000 per year for insurance. (My memory is not perfect, so take these are orders of magnitude, not exact numbers) That is vastly in more than asking people to get insurance to not impose a cost on others.

      Also, while you and I could spend a very significant amount of time listing examples where choice is or isn’t available, it is undeniable that a significant portion of care involves some degree of choice. Medical professional associations recently released a report showing that around one third of healthcare expenditures were useless or harmful. I don’t know how they define that, but I would wager that it implies that some sort of choice could be made to not provide that product. ( Even when you are hit by a bus or struck by lightning, a significant amount of the provided care is provided after you or your family has been consulted. So sure. There is a non-negligible quantity of healthcare expenditures that you don’t really have much choice about. But there is a significant quantity of those expenses about which you can make a choice and so at the very least, this law appears to attach the problem with a machete when a scalpel is needed.

      • Steven says:

        I don’t really disagree with any of your points. I guess I see the issue as whether or not a health care mandate falls into the realm of regulating interstate commerce. If it does, then the government can regulate it. Whether or not the health care law does a good job of regulating it is a side issue to the Supreme Court hearings. I tend to agree with you that it does not.

        If the case can be made that we are all in the health care market in some way whether we like it or not, then the case in favor of the law is very strong. That some of our involvement or even most of our involvement is voluntary doesn’t really matter for this argument. If we’re all in the market, then our behavior in that market can, by the constitution, be regulated by the federal government. Otherwise it’s a stretch.

        In other words, I think you have an argument for why the health care law is excessive, but not a good argument against its constitutionality. Maybe I’m missing something – what arguments in favor support of the ACA are you saying ‘fall away’?

        • PrometheeFeu says:

          Not being a lawyer, my opinion on the matter should be taken with a grain of salt.

          First, listening to the oral arguments, the government seemed quite anxious to make the point that one must enter into the healthcare market and will not have choice in how or when we will do so. I would take that as a sign that it is an important matter, if not of Constitutional law, at least of persuading the Justices who are after all human. (I realize the oral arguments are mostly for show, but I think they do reflect the debate which has already occurred through the briefs.)

          Second, if the healthcare market is one in which one predominantly enters by choice, it might be sensible or at least plausible to segment it for the purposes of the Commerce clause. Perhaps we are all in the chest X-rays market, but we are not all in the birth control pill market. And so when proponents of the mandate claim to be merely regulating the financing of healthcare rather than mandating insurance, one could respond that it is the case with regard to some acts, but not others and that the ACA reaches too far. I do not purchase birth control pills and therefore am not subject to regulation regarding the financing of such purchase.

          That said, I do agree that the argument is much more powerful lex ferenda than lex lata. Indeed, while I would find such an argument to be only helpful towards demonstrating the unconstitutionality of the act, I find it dispositive as to the wisdom of the ACA.

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