THE HEALTH CARE QUESTION by David S. Lawyer, Feb.1992 (minor changes in 1993)` Note: This was written for the purpose of introducing a discussion on health care policy. It asks a lot of questions but intentionally provides few answers since the discussion participants are supposed to come up with proposed solutions themselves. At present (1993) the US spends about 12% of its GNP (Gross National Product) on health care. At the same time, about 40 million Americans have no health insurance. If they had health insurance, health care costs for the US would be even higher. In the 1930's, only about 3% of GNP was spent on health care. How much of GNP can we afford to spend for this? How should it be spent (such as more on prevention) ? Who should pay for it? This all depends on the economic and social situation in America today. While the US was the world's largest creditor nation for many years, we are now the world's largest debtor nation. Natural resources are being depleted and the US now imports about half its petroleum. We have a low savings rate. We also have a host of other problems (education, crime, drugs, aids, pollution, homelessness etc.) which more money (= resources) could help solve. All of these other needs for resources should be taken into account when examining the question of how much we should spend on health care. How should money be spent on health care? There is the saying that "An ounce of prevention is worth a pound of cure". Some preventive measures such a warning labels on cigarettes cost little or nothing to implement. How should doctors be motivated to practice cost-effective medicine, weighing in all medical decisions the social costs vs. the expected benefits? Often they mainly consider what is best for the patient and neglect the social cost of the insurance payments made by insurance companies or government. If we spent less on health care but more on other needs, would people be more healthy? Since health care resources are limited, how should health care be rationed? Who should pay for health care? When we spent low amounts on health care 60 years ago, there was little health insurance. Individuals usually had to pay the cost out of their own pocket and thus were more frugal than someone who has insurance. With insurance, the patient only considers the co-payment cost which is only a fraction of the total costs. In addition, insurance premium payments for insurance by employers are not subject to income tax, thus subsidizing health insurance. What about responsibility for abusing ones health? It's estimated that 50 million Americans smoke while another 30 million abuse alcohol and/or drugs. Should we have more or less health insurance? Another question is: How much should the rich be taxed to pay for health costs for the poor? Should this redistribution of income be earmarked for health care only? Where is investment to come from if the rich are "overtaxed". How much is "overtaxed": 50% of income? 90% of income? What about saving by the non-rich? Some magazine articles on health care: Atlantic Monthly, Aug 1991, p69+ : Healthy Competition National Review, Apr 16, 1990: National Health Insurance ... American Heritage, May/June 1992, p49+ : How America's health Care Fell Ill