It is coincidence, of course, that my recent surgery and my mother-in-law's crisis occurred while California debates universal, compulsory medical insurance. Coincidence or not, the juxtaposition of events stimulated a number of thoughts about what issues California medical insurance must face. Here are issues that I think must be solved for a universal insurance scheme to be successful.
1. Rationing. All social medical schemes, whether paid by insurance or not, must arrange for rationing medical care (because of social stratification due to income differences, private medical schemes by definition include rationing). The rationing can be done explicitly, as part of the payment scheme, or be built into medical delivery more subtly.
Rationing is required, because there is not enough money or medical capacity to deliver all the medical care people want. No nation--not formerly Communist Russia with its vaunted medical system, not Britain with its national medical care, not the US with its mixed private-public medical system--has the wherewithall to provide all the medical care people want, regardless of who pays for it.
Successful medical care creates the demand for more medical care. A person, successfully treated for some symptoms or condition, becomes intolerant of the discomfort and distress of other medical conditions and desires their treatment. Given sufficient money, our nation would soon divide into two large categories--90% of the population being patients in continual pursuit of medical care, and 10% of the population delivering medical care to the other ninety percent. The Ninety percent of the population who are patients would not be able to work full-time and would become, at least part time wards of the state. We would soon cease to be sufficiently productive to generate the wealth required to deliver the medical care the ninety-percent demand. The economy would collapse, the medical system along with it.
Rationing means that not everyone can get all the medical care they desire all the time when they want it. Nearly everybody has to go without some medical care. Notice that I have not said, all the medical care people "need"; I said, "desire". The destinction between desire and need for medical care is already a distinction of rationing, because it presumes that not all medical care that is desired is needed.
Every society that has tried to provide universal medical care has run up against the rationing wall. They deal with it differently, of course, often simply by hiding its existence.
Some societies might centralize medical care in urban centers, in the name of "efficiency", thereby denying medical care to persons for whom access to the urban medical centers is not possible or convenient. This hides the fact that cutting back care for persons in rural and extra-suburban areas is an explicit form of rationing.
Some societies ration medical care by making persons pay for some kinds of medical care or medicines or procedures, thereby denying low income persons access to that care. "Cosmetic" surgery is such an example and is frequently excluded from coverage by America's private HMOs. Many societies deny mental illness the same extensive coverage as physical illnesses as a means of cutting down the cost of medical care.
Similarly, the refusal to provide complete social care for the infirm elderly by defining it as not "medical", or simply by leaving this task and expense to kin, is a form of rationing. Britain ran up against the issue of how to fund assisted living for the elderly in the mid-1970s. It did a study of the cost for national provision of assisted living and found it would bankrupt the national health system. At the same time, it "discovered" that families were already taking care, and could take care, of the elderly largely at their own expense. The National Health Service sighed in relief and enshrined this private solution as a higher good by stating that it was better for the elderly to be cared for in the context of (private) "community", than by the state, after all.
I have not read of any discussion, in the current California debate over universal medical insurance, of rationing, but the issue is implicit in the way the debate is framed. On the one hand, the Governor wants to prohibit rationing by excluding some persons from insurance coverage. In his scheme, everyone would be able and required to have insurance providing some coverage. On the other hand, persons with sufficient private income would be required to pay more for insurance and have to pay privately for certain procedures. The "poor" would have state subsidized insurance. This is a form of progressive rationing: everyone is denied some medical coverage, but relative to their income, the poor are rationed less than the middle class and well-to-do.
I do not think that progressive rationing is fair, because it denies the notion of universal coverage while claiming it exists. Universal coverage means that the middle-class and well-to-do get the same rationing as those groups who are socially favored under progressive schemes.
Update. February 24, 2007. Thomas Sowell discusses the role of (free market) prices in encouraging self-rationing of demand in medicine, among other goods upon which liberals often wish to impose price controls. Price controls combined with governmental subsidy for medicine immediately inflates demand and makes medical services and products scarcer. (Thomas Sowell, "Reject Price Controls," [Riverside, California] The Press Enterprise, Saturday, February 24, 2007, B11; also at the National Review Online, February 21, 2007, under the title "Pricing 101; Pay up or it dries up".)
Contents for Issues of Medicine and Insurance