I still haven’t quite gotten to a thorough fisking of “Exhibit B,” yet, and will have to be satisfied with arguing the following thesis in the meantime:

It is impossible to increase insurance coverage in America without increasing medical spending.

We cannot save enough on bureaucratic reform and government-induced “competition” to offset the new costs associated with an influx of 40+ million new participants. Certainly the newly mandated premiums, paid by those who have determined for themselves that it is not worth it to pay in to health insurance, will also offset some of the new costs. But how many of those 40+ million uninsured have voluntarily opted out?

If even a large minority, say 1/3 of the uninsured, is made up of those that have been denied coverage outright or cannot afford it because of various health factors (many estimates place that number far higher), then guaranteeing coverage to 15 million new patients will certainly surpass any of the potential gains seen in those other revenue sources. The very reason that so many of these folks do not have insurance coverage is because private firms have determined them to be too risky (that is, too expensive) to cover.

How can we mandate coverage of this group and not increase health care spending? It seems like an impossible promise.

The contention really cannot be that we can spend just as much as we are right now and extend the same qualitative and accessible health coverage to everyone. The honest situation is that we would have to spend more to guarantee coverage, and as a nation we need to decide whether that public good requires governmental mandates, regulations, and administration or if it doesn’t.

There will be new costs. We need to determine whether and how they ought to be borne.


  • Ryan

    Sir,

    There is another possibility you are not considering. Your premise that Increasing “coverage” will increase utilization is not necessarily true. There are studies that compare the US system with those in Europe that demonstrate that coverage does not increase utilization. There are a number of potential reasons. I will only address two here. First, if you are in the US, you can get a doctor. By law, they can’t turn you away. Therefore, if you need health care, as long as you can find an ER, you will utilize health care. Studies have shown this is very common among medicaid recipients. Once a month, mom packs up the kids and heads down to the ER. In these instances, the fact that one has insurance “coverage” will not impact a utilization decision. Coverage, if it increases the probability of utilizing a minute clinic instead of the ER, could reduce costs. Another possibility is the well know effect of price controls, or in the case of the “public option,” a drastic expansion of price controls (Price controls are already in place for Medicare and Medicaid). Expansion of price controls may put providers out of business as a result of fewer private insurance patients to subsidize Medicare and Medicaid. Furthermore, reduced compensation will inevitably discourage people from becoming physicians in the first place. The result is a reduction in supply. Reduced supply, combined with price controlled unit costs will result in reduced utilization. An wala! increased “coverage,” reduced costs. I would like to add that I am not in support of the plans Congress is currently proposing. As someone who builds and sells health care programs that reduce costs, I believe this bill does nothing to address the underlying issues of costs. That said, it is possible to increase “coverage” and at the same time reduce “costs.” In the final analysis however, given government’s track record, the bill currently on the table will undoubtedly increase costs, but not necessarily due to increasing access and consumption.

  • MaryAnn

    It seems as though almost everyone engaged in this debate has accepted the premise that it is a good and desireable thing that government increase it’s intrusion into the medical and health insurance industries. What if the state and federal governments just got out of it altogether. Insurance companies could go back to doing what they were created to do- cover catastrophic illnesses and accidents rather than routine Dr. office visits, viagra, sex change operations, etc. That would reduce the cost of coverage. The removal of the third party system would once again place the burden of paying for care where it belongs- on the consumer. This would result in more responsible usage, and also in more responsibility in terms of leading a healthy life style. Allowing consumers to purchase coverage across state lines and allowing them to tailor their coverage to their personal needs would also greatly reduce costs. These ideas, and other free market solutions are not being considered by our president or our congress because they are not interested in health or medical care. Their “solutions” are nothing more than a bid to expand government and its’ control over the citizens.