I can’t call it polished and brilliant, but an honest assessment of it says it sounds like something I would have written on my blog–with all that that implies–before I subjected myself to things like word limits and writing regularly. (I call it, “I banged it out without going back and editing it at all, and somebody more brilliant than me will probably blow it full of holes.) So, anyhow. Without further ado, and all that:
There Ain’t No Such Thing As a Free Lunch
There ain’t no such thing as a free lunch. That was the first thing I learned in highschool economics. Lunches do not just materialize out of nothing. Someone, somewhere paid for that lunch. Another thing we learned was that money does not magically multiply when it passes hands, particularly not when it goes to Washington and back. And finally, we were implored to understand the whole supply-and-demand cycle.
These three facts were the cornerstones for understanding any deeper thought of economics. They were basic; they were fundamental. “If you can’t remember anything else from this class, please remember this!!”
Being the younger sister of a true economics geek, I felt rather abashed that, yes, that was really most of what I could take away from the course, besides a vague awareness of some of the mechanisms of economy. I felt like I had an embarrassing lack of knowledge of economics.
Today, I struggle with a different problem. Today I struggle with the fact that most do not seem to grasp any of these foundations, and, in fact, greatly dispute them.
I am thinking, in particular, of health care. Health care is indeed exceptionally expensive; I have no issues with that. What confounds me is the commonly voiced thought that “health care costs need to be reformed.” Oh ho. All that has gone wrong is people charging too much, ay? We just have to straighten everyone out, and then we’ll have affordable healthcare, is that it?
I struggle with this attitude, because as far as I can tell, it violates every single last one of the foundations of economics.
We are getting ready to study reimbursement for health care services we provide, and the whole situation seems absurd. No longer is there a simple straight forward contract between provider an patient—both are enslaved to the managed care companies. The insurance companies tell the provider what services they can charge for, and how much, and how long. The insurance companies tell the patient who they will allow them to visit, how often they can visit, what services the insurance company will approve.
It is absurdness. The whole point of insurance was supposed to be peace of mind—peace of mind for the provider, that they would be paid for their work, even if the patient was unable to pay themselves. And peace of mind, too, for the patient, that they would have the care they needed even if they couldn’t pay. Instead, it becomes a cruel tug-of-war. The patient is afraid the insurance company will deny payment. The provider spends ever increasing amounts of time trying to meet the insurance companies’ demands for requirements for reimbursement—time that neither the patient nor the insurance company will pay them for. The insurance companies short the providers, deciding they won’t pay what the provider needs to maintain their business. The insurance companies short the patients, saying they have to pick up the rest of the bill and pay large co-pays.
So, then, is it all the insurance companies’ fault? The private insurance companies follow the lead of Medicare and Medicaid. Ah, so, it’s all the governments fault then!
It is a very sorry cruel fact that there is no such thing as a free lunch. Like other laws of nature—gravity, freezing temperatures, bodies unable to survive without food. There seems to be a strain of thought that says, “if it’s nasty, we should get rid of it. We can get rid of it!” But we can’t get rid of gravity, and we can’t make something for nothing.
Surely we agree health care needs to be paid for. There are people working every day, sometimes for terribly long hours, to provide health care. They should be paid, yes? Of course! But where does the money come from to pay them? Someone, somewhere has to pay for it.
Let’s see. The patient? Wait. They don’t have enough money. They need help. Perhaps we shall start an insurance company; they will pay what the patient cannot.
And here is our first hiccup. Money does not magically multiply by changing hands. The patients send in their monthly dues to the insurance company, but it simply isn’t enough to cover all the bills. Perhaps part of this is due to the fact that the insurance company needs some of that money to cover its own costs—afterall, insurance employees work, too, right? Somebody has to do all that paperwork. It takes time. They deserve to be paid. So not only does the money not only magically multiply, it actually shrinks. And there isn’t enough to go around. So, the insurance company looks to cut costs. Part of that is done by trying to limit what the providers can charge, but part of it passed back to the patient in the form of higher dues, higher co-pays and less coverage.
Wait. Now insurance is more expensive for the patient. They can’t afford insurance. They need help. I know—the employers can help pay for the insurance!
But where does the employer get this money? They have overhead. They aren’t an endless well of wealth. To get this money to help pay for insurance, they will have to cut something else out. Perhaps they will fire employees; paying less employees will me mean money freed up for insurance costs. Maybe they will play the employees less. So who is getting shorted?
Whoops, there is still no free lunch.
Well, there is always the government. They can assist us.
But where does the government get its revenue from? Whoops, again. The taxpayers. Does the money multiply, to take it away from the taxpayers so you can give it back to the taxpayers? Sadly, no. In fact, the money shrinks some, because, after all, government employees deserved to be paid too, right? They work all day too, right?
No matter where we look or how hard we try, we just can’t make healthcare cheap. We can shift around the cost, we can shift the blame. But we can’t make the money grow.
Well, if we can’t make the money grow, we need to make the costs shrink. Right?
How? Everything and everyone needs to be paid.
But surely there is a creative way to cut costs. Surely there is waste that can be trimmed. There is of course, the absurdity of a third party to decide what counts as waste—not the provider, who is familiar with the problems and treatments; not the patient who is dealing with the problems. But the third party payer!
More than that, though, there is still that same issue of there being no free lunch. You cannot turn lead into gold; you cannot turn a sow’s ear into a silk purse. After a certain point, there is simply a limited number of resources, and you must make difficult choices. This has often been succinctly stated by saying “Quality, Speed, Cost: Pick Two.”
Pick two? Everyone wants all three! But the frustrating fact is that if you make quality and low cost a paramount, speed will be shorted. There will be longer lines, there will be limit to how much can be provided. Quality and speed, then. Well, now your costs will be sky-rocketing. In order to get professionals who will work well and work quickly, you will have to pay them exceptionally well. The main reason people are gravitating toward health care is the lure of good pay. Take that away, and no one will bother to learn. (This is the cruel concept of supply and demand. If something becomes rare, you must pay more for it. If the market is flooded, you can pay less.) Cost and speed? Quality goes down.
We cannot avoid this. No more than we can all decide to walk on the ceiling instead of the floor, we cannot make high quality, good speed and supply, and low cost all co-exist at the same time. What we have presented before us is not a question of how can we make desirable properties of speed, quality and cost all co-exist at once. The question is, what are we willing to give up, and what is important to retain? And who gets to decide?
Would you like someone else to decide for you which part will cut back upon? Or not? If one doesn’t want someone else to decide, one must take responsibility. If provider billed patient and patient billed insurance company, there would be accountability. If the provider violated the values of the patient (for instance, was fast and cheap but did not provide quality care), the patient could “punish” the provider by switching providers. If the patient billed the insurance company for the reimbursements they’ve been paying monthly for and the insurance company denied it—the patient could hold them accountable by switching insurance companies.
But that takes time and personal responsibility. It will be work; it will be yucky. For sure. And many people don’t want to deal with that. They want it to be someone else’s responsibility. They have been allowing the insurance company to take responsibility, but you know what? That’s been kind of yucky, too. It really hasn’t been working out so well. So we could hand the responsibility over to the government. Guess what? That’s going to be yucky, too. The government can’t fix it any more than it can give its citizens the power to walk on the ceiling.
We can shift the blame. We can shift the responsibility. We can shift where we are shorted—from cost to quality of care to easy access and back to cost again. But we—not us, not employers, not insurance companies, not the government—cannot make the problem go away. All we can do is look at the choices and decide which we find more acceptable.
And that is essentially the debate that is going on now. Should we give the responsibility to the government, or keep it to ourselves? Do we want the government to decide if we will have quality care or quick care or affordable care? Or is that choice we want to reserve to ourselves, as a personal decision? And some people feel that they don’t care if you want the government to decide for you, but they don’t want the government to decide for them. This puts the government in the bind of how you can decide for some people, but not others—and who gets to decide who the government gets to decide for?
But it’s rather silly to call it health care reform. It may change—of course it will change! But you can’t “fix it” so that it is cheap, effective and available for all—not the government, not the insurance companies, not the employers, and not the providers. Because there is no such thing as free lunch–something, somewhere, must be paying for it somehow. The only question is, what are we willing to pay, and what kind of lunch do we want?