When Compromise Compromises

Compromise is certainly one of the virtues of democratic politics, but, it seems to me, it only works when the problem to be decided is what E.F. Schumacher (1911-1977) called a convergent problem. Schumacher, an interesting figure, came to be known beyond narrower circles of economics with the publication of Small Is Beautiful, a contribution to thought about global development. He was a German-born economist who lived in Britain and worked on the post-war economic rebuilding of Germany, later on Britain’s National Coal Board, and later yet as a writer and advisor on international development. He also wrote a brief philosophical work called A Guide for the Perplexed which, in essence, reflects his encounter with the transcendental. He became a convert to Catholicism at age 60. In Guide he proposed that some problems are convergent and are therefore soluble by the collective contributions of people working together (the democratic situation, in my current context) and those that are divergent, thus problems that polarize groups and can never be resolved by those directly involved in the debate. Practical problems tend to be convergent: how to land humans on the moon. Value questions are often divergent because those on either side do not share a common understanding of the problem or the goal to be achieved.

The health care issue strikes me as a divergent problem but presented as if it were merely a matter of finding the right mix of solutions—as in the case of finding a less-polluting engine or a drug with fewer side effects.

The attempt to compromise the problem, meaning matching the demands of both sides by careful give and take, will not solve the problem. Too many contradictions are involved. Here are those that come to my mind.

If health care costs are a burden on industry and make it less than competitive against others based in countries where a national system picks up the cost, retaining a mixed system does not help our industry. If we provide subsidy for those who cannot get employer insurance, the availability of this option will give industry incentives to get out of subsidizing health insurance—unless the payroll tax on those who opt out is higher than the cost of insurance. If the latter is true, though, U.S. industry will still be hampered in foreign competition; it will continue to be tempted to ship jobs overseas.

One of the highest costs of our system is administrative, arising from the large community of insurance companies, each with its separate overhead. Continuous reliance on the private insurance model guarantees that costs won’t drop.

Another major source of costs is the slicing and dicing of health care into innumerable, separately-billed sub-activities. People of my age are all too aware that medical care consists of one visit to a doctor followed by three separate tests, leading to one or two specialists, each of whom in turn relies on additional tests. And so it goes. To change this system by so-called incentives will only work if the incentives are higher than the benefits now derived by the participants. And if the government tries to keep its own involvement modest, no reform will actually take place.

Another reason for the endless testing is to protect the doctor against malpractice suits. But the reluctance of the Obama administration to tackle tort reform—capping damage awards at low but reasonable levels—suggests that the incentives to continue over-testing will stay in place.

There are convinced elements on the hard right who sincerely believe that social Darwinism is an appropriate view of humanity. Those who hew to such beliefs don’t sincerely want a national health system. Their concept of community is open-ended. Those who cannot qualify must be left outside without much wringing of the hands. At the left is a hardcore of people who believe with equal sincerity that in this case the government must be the sole agent. They are joined by a few royalists like me. This view is rational enough because costs must be brought under control, and this cannot be achieved by the usual incoherence of confusing cost-sharing arrangements, special interest accommodations, and letting the almighty Market decide all of the details. This view is communitarian; all people are included. That, of course will make people think of socialized or European-style medicine which is routinely castigated despite its proved benefits. Never mind that Count Bismarck, who worked for a king, introduced such practices in the nineteenth century already, and Germans are still benefiting from it. But here the culture is excessively individualistic despite the obvious interlocking of all things technological; we seem unable to see the forest for the trees. I call this a classical stand-off. Values are clashing. Compromising this situation will only rearrange how the insurance industry gets its money.

We could, at least in theory, satisfy both sides. We need two health care systems, one for the great majority, funded by all; and the other for those who want luxurious care and are willing to pay its extra costs. The larger system would offer complete but somewhat rationed services to all comers; it would be government-run, financed, and managed but its services delivered by doctors and hospitals participating voluntarily. A completely private system could coexist with it, supported by insurance, as the current system is. All citizens, however, would be required to bear the costs of the main, the public health system. Those who have more can spend their money as they wish on extra or more rapid services and health care that goes beyond the strictly necessary.

Demography is the most basic determinant of social life; culture is the other. Our culture produces mind-sets antagonistic to a rationalized system enjoyed by most of the people in Europe, in Canada, and in many other advanced countries around the world. Are those systems perfect? Of course not. Do they reach all the people? They do indeed. Are they affordable? Yes, they are.

Right now the patterns of discourse are beginning to sound unpleasantly like the build-up to the collapse of the Clinton initiative a decade and a half ago. This troubles me. The message reaching us now is pointing in the wrong direction, the direction of a confused compromise. We really don’t need another convulsion of meaningless reorganization. I don’t want health care compromised by yet another compromise.

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A more statistical approach to this problem is presented here, on LaMarotte, with numbers enough to help visualize the problem in a quantitative way.