Medical Care and Pauperization

By George P. Brockway, originally published December 29, 1987

1987-12-30 Medical Care and Pauperization Title

HAVING recently seen the insides of more hospitals than I wanted, and having accordingly had bills from more medical specialists than I dreamed existed, I have a more intimate awareness of the Medigap than I had when I wrote my April 20 column on the subject. Hence these reflections on three related problems.

First, I have an unhappy impression that some of the specialists were unnecessary, and that some of the things the necessary ones charged for were unnecessary. A couple seemed to drop around for two or three minutes of bed side chitchat long after the diagnosis had been made and their specialty’s noninvolvement confirmed.

One of the latter, a nice fellow with an impressive beard, sent me a bill for 12 such visits at $65 a pop. Medicare will ultimately pay somewhat less than one-half of that, and a group policy I have will probably pick up 80 per cent of the balance; so I’m not hurting too badly. But every medical expense, whether legitimate or not, goes to swell the national medical bill and thus the medical insurance bill. Medicare then raises its rates or reduces its benefits, and the private insurers do the same.

Now, my impression that this fellow with the beard was riding the gravy train is only an impression. I don’t know, and I have no satisfactory way of finding out. Besides, when I’m a patient I want to have everything possible going for me. So I’m not going to inquire whether bills are padded, and I’m not going to shop around (as the Reagan Administration thinks I should) to get the cheapest rates.

You might think my GP blameworthy for sending in all those specialists. Yet put yourself in his shoes. Suppose he doesn’t call in all the specialists and suppose they don’t order all the blood tests and X-rays and CAT scans and MRIs. Then suppose I wind up with a serious ailment that might have been avoided. As I keep telling you, I’m a mild-mannered man and I’d probably not sue, but plenty of others would. So to guard against a malpractice suit, the GP orders every specialist in sight. Of course, peer review might be able to do something about this problem, and for all I know it does; but I’m sure it’s not easy.

Insurance companies keep trying to get legislatures to limit the amount of damages that can be collected, or to outlaw claims for pain and suffering. This seems to me an unreasonable solution. Malpractice does occur, and accidents do occur. Should I lose the use of my right hand because of an incompetent or accidental slip of a surgeon’s knife, I’d not be “made whole,” as the lawyers say, by a free night in the hospital (less legal fees). If the doctors can’t afford high malpractice premiums, and the insurance companies can’t afford to lower them, I can’t see any course short of turning the whole thing over to the government. As Charles O. Gregory argued in a wise and witty book entitled Torts and Retorts, all sorts of personal injury claims (torts) should be the responsibility of the State.

A leading theme in the history of Western law has been the gradual transfer to the State of rights and duties that in more primitive civilizations were private. In ancient Greece, triremes were built not at State expense but at the expense of rich men chosen by lot for the honor. In late medieval Italy, all families of any consequence maintained private militia, like the followers of the Montagues and the Capulets, and competed in building lofty military towers that would enable them to overawe their neighbors. San Gimignano, a town of no great size, had 70 such towers, 14 of which still stand. (A civilizing step was the passage of a municipal law-a zoning ordinance- prohibiting towers beyond a certain height.) For centuries, the detection and punishment of crime was solely the obligation of the injured. Fairly late, the impersonal judgment of God was rendered via trial by battle and trial by ordeal. Secular public enforcement of criminal law is a relatively new idea.

In the same way, health care is gradually shifting its ground. The notion of fee for service is already being compromised by the movement to shame doctors into accepting approved fees. It’s not too much to hope that we may eventually have the sense to adopt the better European systems.

A step in this direction has been taken by Massachusetts. Cynics say it is a calculated maneuver in Governor Michael S. Dukakis‘ play for the Democratic Presidential nomination. Giving the Duke the benefit of the doubt, I still think his scheme is an example of what Samuel Johnson said about good intentions and the road to hell.

There are close to 6 million residents of Massachusetts and almost 700,000 of them have no health insurance. I must admit I’m astonished that so few are not covered. About two-thirds of the uninsured are employed or are dependents of people who are employed. The Governor proposes to narrow the gap by requiring all employers to insure their employees, with the state picking up the relatively small balance. Clearly what makes the scheme attractive is Massachusetts’ present unemployment rate, said to be less than 2 per cent, since the drain on the Commonwealth fisc won’t require dramatically higher taxes. Before the days of high-tech, when Massachusetts’ unemployment rate was one of the highest in the country, the scheme wouldn’t have seemed so painless.

That brings us to the second problem. Whatever the condition of business, universal employer-financed health insurance has a damping effect on employment. Once additional employees cost you several hundred dollars apiece beyond their pay, you’re not so cavalier about hiring them. (Social Security taxes, right now, work to discourage employers in this way; they’re also heavily regressive on employees.)

Just because we’ve stumbled along this half century with a far from perfect Social Security system doesn’t mean that more of the same won’t hurt us. In The Next Left Michael Harrington argues persuasively that piling payroll taxes on payroll taxes was largely responsible for the high unemployment that contributed to the failure of Socialist President Francois Mitterrand‘s program in France. It could happen here.

Aside from Workmen’s Compensation, medical insurance has no special connection with employment. In a more civilized nation, all such protection would be a national responsibility, met out of the general revenue without the intervention of insurance companies, private or public. The tax bill might then seem higher, but the drain on the common wealth would be very much less, and the salutary effect on the general welfare would be very much greater.

For this reason I’m not passionately interested in HR 2470, the bill the House has passed limiting some catastrophic medical expenses to $2,000 a year. And speaking personally, although our medical bills will be many times $2,000 this year, HR 2470 will not, as I understand it, benefit us in the slightest. The insurance company that wrote the group policy I’ve mentioned will get all the benefit, and we will have to pay maybe $1,160 a year in increased Medicare premiums. The insurance companies that will be hit are the TV bandits I described here last April-if their bemused subscribers have the sense to drop them as utterly useless as well as scandalously expensive.

Those committed to laissez-faire insurance complain that HR 2470 provides for a sliding scale of premiums. Since this tops out at an Adjusted Gross Income of $14,166, my objection is not that it is progressive, but that it is not progressive enough. It is not reasonable for anyone with an AGI of$14,166 to be put in the same class with David Rockefeller, or even with me.

THE THIRD medical problem is the hundreds of thousands soon to be tens of millions- of senior citizens who can no longer take care of themselves. In the good old days, before there were such things as senior citizens, the old folks moved in with the young folks, or possibly had a spinster daughter move in with them. In either case, the elders were able to give their adult offspring the benefit of their long accumulated wisdom, driving the offspring to spring up the wall. In many a home, something approaching The Tragedy of King Lear was re-enacted. Yet both generations took some comfort in the fact that the elders were not a public charge. Where, for lack of family support, they were the public poor house took over.

All this has changed, for reasons we’re all familiar with: Family ties are looser today; individual pride is stronger; the expected life span is very much longer; bottom-line-conscious employers are quick to replace high-priced and slowed down old hands with eager beginners; and medical research has rendered many diseases incapacitating rather than killing.

These changes lead to the matter of nursing homes and how to pay for them. They are not paid for by Medicare or by most commercial health insurance. They are paid for by Medicaid, but only at the expense of near-pauperization. The rules are complicated, and complicated revisions are daily suggested; yet it remains at best a disheartening and dishonoring process, especially for the middle class that has worked hard for independence. What’s to do about it?

Actually a simple solution suggests itself. Instead of forcing pauperization before entry into a nursing home, apply the force at the end. That is, if it is reasonable for the government to exact as full payment as possible for nursing home care, let it do so from the patients’ estates after death, not from their reserves.

They would thus be able to retain the hope, however slim, of being able one day to take care of themselves again, outside the confines of the nursing home. Moreover, they would be spared the shame of pauperizing both themselves and their spouses, or the alternative heart-wrench of unwanted divorce in order to protect the independence of the non-institutionalized partner.

Obviously it would be difficult to devise regulations that would forestall the temptation to diddle the government in one way or another. But the same difficulty obtains under the present system. Obviously, too, it would cost the government something to have to wait for its money. On the other hand, the money, when the government finally got it, would tend to be greater, for there would be no need for most of the exceptions that now limit Medicaid’s claim on a patient’s means.

Finally, some will object that my plan would deprive offspring of their rightful inheritance. To them I reply: (1) The heirs of patients pauperized as a condition of Medicaid inherit little or nothing as it is; and (2) I’m not one to do battle for the right of inheritance, anyhow. In fact, I join economists as various as Hayek and Keynes in thinking the right might well be abolished. But that is another question.

The New Leader

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