Health, Wealth and Personal Responsibility

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How much is Obamacare really worth? This is an important question as we approach the incoming Trump Administration. Should he backtrack on his campaign promise to repeal Obamacare on Day One? If Trump merely instructed his HHS Secretary to drop the appeal of House v Burwell most insurers would probably bail out of the market and it would collapse. If Congress uses a Budget Reconciliation process to repeal Obamacare provisions, such as the individual mandate, employer mandate, the Obamacare taxes and the subsidies, the health insurance exchange would probably collapse.

Obamacare premiums are rising to stratosphere. Last year when my wife called her broker, she discovered her 2016 premiums would be roughly $6,000 per year for HMO coverage with a $6,750 deductible. The reason (according to Blue Cross Blue Shield) is because medical claims for other people in her risk pool are exceeding expectations.  My wife leads the epitome of a healthy lifestyle. Her health risk is very low risk. She does not expect to use $1,000 in medical care — much less exceed $6,750.  As she pointed out to me; Obamacare is basically forcing her to write a $6,000 check to Blue Cross for which she expects to receive nothing in return. That’s a significant transfer of wealth most households would find objectionable.

During the 20th Century, Americans’ life expectancy at birth increased by nearly two-thirds (62 percent), from 47 years to 77 years. Childhood vaccines were a huge breakthrough. Prior to the modern age, more than one-third of children did not live to see their 5th birthday. Improvements in motor vehicle safety played a big role. Safer workplaces helped tremendously. Better food safety and control of infectious diseases through cleaner water supplies and proper sanitation made a huge difference. Better treatment of coronary heart disease – including the knowledge that smoking is bad for you made a huge difference in longevity.  Better family planning with prenatal care has led to healthier mothers and babies — a major achievement. Finally, disease and infection control using antimicrobial therapy had a major impact on life expectancy in the 20th Century. Notice that many of the greatest public health achievements are more closely related to public health interventions than to personalized medicine.

Americans are wedded to the idea that there are miracle cures to be had in medicine. But as you can see from the above, prevention often works better than treatment. Certainly, there are some highly effective treatments and therapies. Antibiotics have rendered cuts and scrapes that once could potentially have killed you into low-risk minor problems. President Calvin Coolidge’s son died of sepsis caused by staph from a blister he developed while playing lawn tennis. Abraham Lincoln’s grandson Jack died of sepsis after a minor surgery. Heart bypass surgery extends lives. Hip and knee replacements probably extend life by years by helping seniors stay active longer. Insulin and other drugs allow diabetics to live longer and lead normal lives. Yet, for all these effective treatments, there are numerous others that are only marginally effective or ineffective. It is well known that many drugs are barely more effective than a placebo.

Moreover, many medical conditions are better treated through lifestyle modification rather than drugs or surgery. More than two-thirds of medical spending is on conditions related to lifestyle behaviors. Nearly half of premature deaths are preventable through behavior modification (e.g. proper diet, moderate exercise, tobacco cessation and alcohol in moderation).

In his Forbes column, Mercatus scholar, Brian Blase touches on a subject that most of you probably have never given much thought to. How much does medical care really matter? How much does it improve health status? The answer — according to a recent analysis — is not very much. Of the determinants of health, only about 11 percent are attributable to medicine care. Twenty-one percent relate to biology and genetics. Our social circumstances are nearly one-quarter (23 percent), while behavior accounts for 38 percent.

That raises another question: what were all the sick people doing prior to Obamacare? Were they dying in the streets? Apparently not. I have seen no evidence that the country is healthier as whole now that we are spending billions more on Medicaid and Obamacare. They were probably getting less care, but they were getting more appropriate care.

Obamacare is a bad deal for most consumers by design. It was intended as a way to help expand coverage to people too poor to afford a health plan; and to allow people with pre-existing conditions to buy coverage they otherwise would not afford. Obamacare is an income redistribution scheme from rich to poor; young to old; and from healthy to less healthy.

Of course, some people through no fault of their own drew the genetic “short straw.” Are there better, more efficient methods, to deal with the negative externalities of people who’ve made a lifetime of poor choices? Is there a better way that improves health status at a lower cost? Probably. But it would likely require a heaping serving of personal responsibility.

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