THCB welcomes back our solid pal, the erudite Michael Millenson, for whom the sun doesn’t shine if there’s no wisecrack in the wings. Now leading a consulting firm specializing in health care quality projects, Michael is a former Chicago Trib reporter with 3 Pulitzer nominations to his credit. Michael’s groundbreaking 1997 book Demanding Medical Excellence was one of the first to call attention to the problems addressed by the Quality and Safety movements. Enjoy.
As wildfires sweep Southern California, I have been surprised that homeowners in some of the most affluent and staunchly Republican enclaves in the state have not protested the widespread deployment of government workers bearing fire hoses and driving ambulances. The pain of watching one’s life possessions burn to a crisp must almost be matched by the pain of watching tax dollars wasted on a task that private, for-profit firefighters could surely perform more cheaply and more effectively. Yet not even the richest of the fire-torn refugees has expressed regret over government intervention in their rescue.
It’s important to remember that wildfires in California are a
foreseeable event, just like hurricanes in the Southeast, blizzards in
the Upper Midwest or – to switch from the cosmic to the quotidian –
illness or accidents befalling individuals. In bumper sticker terms,
stuff happens. If one believes in the marketplace, then it should be up
to individuals knowingly facing risk, not the government, to either
take prudent steps to protect themselves or face the consequences.
If, after all, one believes that Medicare should be privatized, then
one also implicitly believes that the old, frail and infirm should be
left to their fate if they chose a health plan adequate to finance the
flu but with coverage too meager for multiple myeloma. Economists call
this a “market signal,” meaning that it’s supposed to scare everyone
else into acting like Rational Economic Man rather than like actual
human beings. Similarly, if your health savings account is exhausted
before your medical needs, that should teach the guy in the next
cubicle to quit wasting money on a big mortgage and sock away something
for a possible stroke.
Given the Republican allegiance to the marketplace, should not
California taxpayers send fire engines to rescue only those whose home
insurance covers full replacement cost – Rational Economic Man — and
the “deserving poor” who, clutching tax returns in hand, can prove they
couldn’t afford the premiums? The question answers itself.
Firmly held convictions about the importance of individual
responsibility seem to melt away when the flames approach our house,
the winds howl outside our window, the snow drifts trap our car or
disease strikes our family. The marketplace does some things very well,
but responding swiftly to rescue those who cannot rescue themselves is
not one of them.
Fire, wind, rain, snow and illness can strike any of us, regardless of
political beliefs. Paying taxes to protect the vulnerable from
devastation is not a step down the slippery slope of socialism but a
reaffirmation of a basic human commitment. As our nation tries to build
a consensus for sweeping health care reform, perhaps the California
fires can reignite a recognition that Rational Economic Man is a straw
figure and that community and compassion are the values that truly
Michael Millenson (email@example.com) is the President of Health Quality Advisors LLC in Highland Park, IL.
Rearranging the chairs isn’t going to save the ship. The key problem facing our health care system is the cost of medical care. Whether the system is market driven or government run there’s only four sources to pay health care costs: taxes; premiums; the consumer’s wallet; or charity (someone else’s wallet). That’s it. And the drivers of increasing health care costs aren’t tied to how the system is financed. This is the issue that deserves attention from policy makers, but it’s not an easy challenge. So we’re unlikely to see much progrss in that directin.
Wow, you know, the whole part of using analogies is there’s always someone who will analyze the individual electrons used to transmit same, and find them not at all equivalent.
What public-good project should we use instead? Free voting booths?
All are social projects for the common good. The nub of the argument is that people don’t have to prove their worth when they call the fire department. Nor do they have to prove they’re insured to vote.
The value of a doctor’s attention is infinite when one is sick. The price shouldn’t be. The price should be borne by all of us, on each other’s behalf. Because it’s only right.
Not fair. Right. Life isn’t fair, after all. Civilization tries to make up for that. Here, it fails too often.
The analogy doesn’t work for me, because insurance companies often refuse coverage to people with pre-existing conditions.
Building in a remote area surrounded by brush could be considered a pre-existing condition for the homeowner.
Of course, the building and planning departments which allow developments in such vulnerable areas are equally to blame with the homeowners.
Rebuilding after a disaster, whether it’s in the tinder-dry areas of California, or on the Atlantic coast’s barrier islands and beaches should not be supported by the government or private insurance.
We’re still missing one critical piece–the fire’s administrative overhead. Surely we must account for the marketing, profit and claims administration. Are we certain that all that fire fighting was truly necessary? I’m certain a number of homeowners will find that their claims will be rejected because fire fighting wasn’t necessary or they didn’t receive prior authorization to have a fire fought. What is the 800 number for prior approval? Some homeowner will certainly find their insurance retroactively canceled. I’m sure they will be referred to the California high risk fire insurance pool. It takes a lot of adjusters, claims processors, and lawyers to fix all this.
I can’t wait for the jars with pictures of the burned out shells of McMansions to appear in the country club bars asking for spare change to rebuild.
If only their garden hoses where larger they could fight the fires themselve along with their volunteer neighbors.
Oh the moral hazard …. we might get folks away from private fire insurance to government sponsored fire insurance and then we would have “socialized fires!”
Great post, and a great analogy. It’s devastating to hear about what’s happening in California with all of the fires. Unexpected, but as you say, all disasters are inevitable. At some point, you will get sick. Unfortunately, the current healthcare system leaves those unable to pay for care, or just barely getting by with their measely, yet slightly affordable coverage, not many options. Living on a fixed budget is difficult, especially when you have to pay for higher and higher premiums, and the funding keeps getting cut. I know that we’re all looking for some meaningful health care reform that can serve us all as a passionate, meaningful community, but I don’t think the private healthcare industry has that in mind. For those of you concerned, you should check out the site AARP put up called http://www.thisissoridiculous.com and sign the petition to help further Medicare reform. I’m working to support them in this matter, because I think it’s important that all of our voices get heard and that we push for reform as fast as possible before it’s too late. You should do the same. Again, great post and analogy.
I guess a “core” question would be: “Given a large deficit in health care resources to meet health care demands, who should have the greater say in how dollars will be spent, the individual or the governmental agency?”
I know we don’t believe that “good intentions” balance budgets. I assume we’ll have very large deficits in our federally-funded health care programs in the not-to-distant future. Is it better for a 76 year old to decide “I can’t afford that surgery” versus the oversight agency saying “you can’t have that surgery”?
But Michael, how do we know we are getting “quality” fire fighting?
But seriously, what about the requirements in fire prone areas (both for insurance and by local ordinance) that homeowners take appropriate precautions, including landscaping, building materials (e.g. no shake roofs, etc.)? If your analogy works for healthcare shouldn’t specific requirements for health behavior be built into the system? Does public funding lead to regulations regarding weight/diet/caloric intake/exercise etc.? Certainly if we are all going to pay for it we should expect that certain “precautions” be taken. You can’t take personal responsibility out of the equation. The latest example is a story related to me about a guy on medication for high blood pressure, who when asked about ordering “extra salt” on his McDonalds fries replied “oh, its ok, because I’m on medication”. Do you want to pay for his drug benefit, hospitalization andn post stroke rehab costs?
“its largely because the fires threaten to spread to other areas– its the contagion that makes it in everyone’s interest to put them out quickly.”
Actually firefighters had to abandon fighting the fire and concentrate on protecting million $$$ homes. They were just as much protecting insurance companies loss as that of the owners, who by the way get subsidized fire insurance rates due to publically funded fire departments. And who pays for all the other services needed to manage these fires such as police, works departments and power crews. If people think that the rest of us not in the CA insurance pool won’t pay higher rates, think again, my understand is re-insurance will cost us all.
Michael, give ’em hell!
This is really good, befitting Jon Stewart.
I have only one disagreement. Re: “Given the Republican allegiance to the marketplace, should not California taxpayers send fire engines to rescue only those whose home insurance covers full replacement cost – Rational Economic Man” Should not these rational men have entered into contracts either directly with companies of fire-fighting doctors , or purchased fire insurance from companies that then contract with doctors of fire-fighting?
I propose the following market based subrogation of costs. The amount of money a home owner with insurance will be the net of the covered amount (of the insurance policy) minus the cost of fighting the fire. This latter amount will be sent directly to the company of fire-fighting doctors. It’s conceivable that the home owner will receive no money, and may still owe the company of fire-fighting doctors money for services rendered!
How are we going to work quality control into this system? Who will establish the standards of training, necessary skills, and continuing education leading to re-certification?
I think the analogy is stronger than you suggest. You write, “I don’t see significant public dollars being used to deploy high-priced contractors to rebuild the houses (that’s for private insurance).” There may not be much govt. money going directly to deploy contractors, but there is disaster relief funding. What is this for if not to help people financially beyond what private insurance would provide?
Don’t forget that there is more than one way for govt. to reduce the financial risk that people face, whether it is from fire, disease or plunging investments. When Medicare pays for the treatment of someone with cancer, it doesn’t dictate exactly which doctor a person sees, or where s/he is seen, or which treatment is given (though it may refuse to pay for some treatments). When the FDIC steps in to refund the money of depositors in an insolvent institution, it doesn’t insist that the people put their money in government bonds or T-bills. And, obviously, government help for the victims of wildfires need not take the form of creating cheap cookie-cutter replacement homes, but could instead be no-interest loans or short-term emergency funding.
The fire department comparison can give the impression that Millenson was arguing for nationalized health care. But that wasn’t the point of the piece. The point was that homo sapiens is not homo economicus, and we need a government that recognizes this and creates support mechanisms to mitigate the catastrophes that will befall us when we don’t collectively act with perfect information and rational calculation.
I think this is an absolutely critical point, by the way. I used to be a Libertarian until I realized that the image of human nature it contains is as naively utopian as that of Marxism. If you’re still a Libertarian after reading and thinking about the implications of psychologically-informed decision theory (think Kahneman and Tversky) then I don’t know what to say.
Paying taxes to protect the vulnerable from devastation is a far cry from subsidizing treatment for medical conditions that can be prevented by self discipline and personal repsonsibility. A great example is low back pain. Billions of dollars are spent each year are on treating low back pain in indiividuals of all ages, most of which can be prevented through exercise throughout the life span. Don’t we also know that regular exercise can help control diabetes, prevent obesity and other medical conditions? Maybe if we shifted our focus to subsidizing preventative measures we wouldn’t have to pay for expensive medical procedures. But then people would have to take true personal responsibility by actually caring about their health instead of expecting someone else to do it for them after the fact.
I’m not sure the analogy works as extensively as you would make it. While we’re providing public resources to fight the fires, its largely because the fires threaten to spread to other areas– its the contagion that makes it in everyone’s interest to put them out quickly.
While I think you’ve made a terrific analogy to the public health system (vaccines, water testing, CDC), I don’t see significant public dollars being used to deploy high-priced contractors to rebuild the houses (that’s for private insurance).
If you extended your analogy to today’s health system, we would then have a centralized government agency ensure contractors paid at cut-rate fees would be deployed to build “efficient” housing structures– likely reminiscent of the grey concrete Soviet bloc structures being torn down across Eastern Europe. And I don’t think any homeowner would be looking for that as a solution.
What a geat analogy. Well done and timely.
I might add that 60 Minutes did a piece on these fires last Sunday. Years of fire suppression have led to large quantities of underbrush dried by drought caused by global warming which also melts less available snow faster at elevation that also helps the drying of the underbrush. Firefighters interviewed said that years ago a 100K acre fire was rare, now it’s just another day at the office with 400K and 500K fires common. The pines that normally are fire resistant can’t survive these hot fires. All you hear from our great 4th estate is the winds are causing the fires.
Seems Republicans can’t hold their own “personal responsibilty” principals when it costs them money or they want to keep their heads buried in the sand.
Get ready for the big mortgage lender bailout as well that congress is pushing through. That one was caused by lying, and more lying, along with wink wink nudge nudge by lenders. Ain’t it great to have well connected and politically supported friends in high places.