How Much Should Government Provide?
My first year in the Legislature (2001), the State had a huge surplus (we thought). As we were moving toward setting aside about $20M for the rainy-day fund, a fellow-freshman representative pleaded, "How can we consider setting aside this money when there's so much need?" It raises an interesting and important question: how much should government pay for?
A good summary of the budget is found here. Because the budget is just under $10B, I'm going to round off dollars. The big 3 expenditures are education (42% of the budget), health and human service issues (24% of the budget), and transportation (11% of the budget). So:
$4.2 billion is spent on education. Who thinks that is enough?
$2.4 billion is spent on health and human service issues. Who thinks that is enough?
$1.1 billion is spent on transportation. Who thinks that is enough?
Advocates for each item above would say that billions more are needed for just that item alone. Okay. Where would we find it?
There are 4 real sources (and, of course, combinations of the 4). Take it from other programs, take it from citizens' wallets, get the private sector to fund it, or grow the economy to generate more revenues.
Other programs. After the items above are funded, 23% of the budget ($2.3 billion) is left to fund all other state agencies, programs, prisons, law enforcement, state buildings, parks and anything else the State does. Who thinks that is enough? Some programs can be trimmed or eliminated, to push money elsewhere. But, to grasp the size of the task, remember that $30M has to be found in some program or combination of programs just to move the public education budget 1%.
Citizens' wallets. If more money is needed but can't be taken from other programs, it has to be taken from the citizens. Reasonable minds can differ on appropriate tax burdens. However, I would hope that everyone would recognize that, at a certain level, high taxes generate even less revenues -- because they scare away productive citizens and jobs. My feeling is that our tax burden (around the 9th highest in the Nation) is too high and currently thwarts our economy. Grabbing more of our citizens' money would be harmful: that's my opinion.
Private sector. Regarding the Medicaid dental issue, I wrote that the private sector might be encouraged to help with some of the funding (even more than it currently does).
Senate candidate Pete Ashdown recoils at the idea of the private sector pitching in. Pete commented:
Herbert Hoover had a similar idea in regards to caring for the sick and infirm who are unable to pay. It didn't work out so well.
Charity is an essential part of being human, but the coffee can at 7/11 isn't going to always buy that needed liver. The Veterans Administration has demonstrated an efficient way for government to provide insurance for our heroes, all we need to do is properly fund it. The private sector on the other hand has done a disasterous job on funding American and business health care needs.
Using the liver analogy, 1/2000th of the overall burden wouldn't be the cost of the liver transplant but, rather, would be the cost of the ride to the hospital. Nonetheless, his point seems to be that government should be expected to provide more than it currently does, though he does not say where the revenues should come from.
Economic growth. A commentor to this post states:
Investing in Utah's economy will provide those who are in need of State assistance with improved access to resources, broader funding of necessary services, and a bridge to self-sufficiency.
The Angry Citizen. And, then, representing the position that doesn't advance anything (the strong dissent with no substantive suggestion), is the comment to this post on how the current Medicaid program faces the real-world problem of dentists not taking Medicaid enrollees:
Then find a way to make it work Senator, BUT MAKE IT WORK!
I'm not sure why he used just one exclamation point, but that was his call to make.
So, to help us MAKE IT WORK!!!, what would you suggest is the proper role of government in funding services and programs, and how should we best go about it?
A good summary of the budget is found here. Because the budget is just under $10B, I'm going to round off dollars. The big 3 expenditures are education (42% of the budget), health and human service issues (24% of the budget), and transportation (11% of the budget). So:
$4.2 billion is spent on education. Who thinks that is enough?
$2.4 billion is spent on health and human service issues. Who thinks that is enough?
$1.1 billion is spent on transportation. Who thinks that is enough?
Advocates for each item above would say that billions more are needed for just that item alone. Okay. Where would we find it?
There are 4 real sources (and, of course, combinations of the 4). Take it from other programs, take it from citizens' wallets, get the private sector to fund it, or grow the economy to generate more revenues.
Other programs. After the items above are funded, 23% of the budget ($2.3 billion) is left to fund all other state agencies, programs, prisons, law enforcement, state buildings, parks and anything else the State does. Who thinks that is enough? Some programs can be trimmed or eliminated, to push money elsewhere. But, to grasp the size of the task, remember that $30M has to be found in some program or combination of programs just to move the public education budget 1%.
Citizens' wallets. If more money is needed but can't be taken from other programs, it has to be taken from the citizens. Reasonable minds can differ on appropriate tax burdens. However, I would hope that everyone would recognize that, at a certain level, high taxes generate even less revenues -- because they scare away productive citizens and jobs. My feeling is that our tax burden (around the 9th highest in the Nation) is too high and currently thwarts our economy. Grabbing more of our citizens' money would be harmful: that's my opinion.
Private sector. Regarding the Medicaid dental issue, I wrote that the private sector might be encouraged to help with some of the funding (even more than it currently does).
Senate candidate Pete Ashdown recoils at the idea of the private sector pitching in. Pete commented:
Herbert Hoover had a similar idea in regards to caring for the sick and infirm who are unable to pay. It didn't work out so well.
Charity is an essential part of being human, but the coffee can at 7/11 isn't going to always buy that needed liver. The Veterans Administration has demonstrated an efficient way for government to provide insurance for our heroes, all we need to do is properly fund it. The private sector on the other hand has done a disasterous job on funding American and business health care needs.
Using the liver analogy, 1/2000th of the overall burden wouldn't be the cost of the liver transplant but, rather, would be the cost of the ride to the hospital. Nonetheless, his point seems to be that government should be expected to provide more than it currently does, though he does not say where the revenues should come from.
Economic growth. A commentor to this post states:
Investing in Utah's economy will provide those who are in need of State assistance with improved access to resources, broader funding of necessary services, and a bridge to self-sufficiency.
The Angry Citizen. And, then, representing the position that doesn't advance anything (the strong dissent with no substantive suggestion), is the comment to this post on how the current Medicaid program faces the real-world problem of dentists not taking Medicaid enrollees:
Then find a way to make it work Senator, BUT MAKE IT WORK!
I'm not sure why he used just one exclamation point, but that was his call to make.
So, to help us MAKE IT WORK!!!, what would you suggest is the proper role of government in funding services and programs, and how should we best go about it?
posted by steve u. at 6/13/2006
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13 Comments:
With healthcare expenditures topping 15% of GDP, it is impossible to believe that there is not plenty of money. The problem is clearly distribution. That shows a failure of government.
Okay. So what policies would you change to improve things?
It is fairly easy to spot problems. We tend to do that as we drive around town or engage in just about any activity. The cost of health care is a clear problem. But the solutions aren't so apparent.
For example, many argue that more government mandates are needed in the health care arena. On the other hand, many argue that the prevalence of government health programs and mandates artificially inflate prices, so that non-goverment options are pushed out of reach of the average citizen -- meaning that more people are pushed onto government roles, further diluting the available money.
How would you suggest we address this?
As one doctor told me, the profit motive is not increasing competition in health care insurance, rather its damaging it. Profit and shareholder concerns account for an enormous amount of the cost of health care insurance and health care.
Whether a private entity could operate as efficiently as the VA remains to be seen. I think what is happening at the Fourth Street Clinic is a good example of efficient private concern. That idea needs to be expanded on a national front.
My economic thesis is summed up in that the free market works when there is robust competition and a level playing field. When those elements are not present, then there is a role for government.
Doctors should be paid what their talents demand. Private insurance doesn't always do that now. Disband all the disparate systems we have at the state and federal level for providing some insurance and create one transparent entity for serving all Americans. I would be more than happy as a business owner to pay what I'm paying now into that kind of system if I knew 90% of my payments was going into care, rather than downwards of 60% right now.
And that's why I'll vote for Pete Ashdown.
Step 1: www.fairtax.org
Step 2: universal, national health care, run by a single, transparent government body, with efficiency at 90% rather than 60%.
Require all citizens to purchase insurance, subject to income, and require all companies to contribute.
Several agencies in Utah state government do their jobs very well. But, I've never thought of governments as models of efficiency. I'm not sure we could point to many areas of government (especially in the federal government) and say, "I want our healthcare system to work just like that."
Solutions need to be studied and implemented, but we should be leery about quickly assuming that government can design the best solution and, then, run the program efficiently.
I don't really have any answers since I'm not a health-care expert, but I have a couple of questions that drive my concerns.
Let me preface my questions by a brief history of the health-care industry as I understand it (please correct me if I err in my understanding): health care used to be necessarily a charity. Most hospitals, in fact, were run by churches or by the government. In Salt Lake, for example we had St. Marks (Episcopal), Holy Cross (Catholic), LDS (that's pretty clear), and the County Hospital (there was one downtown and I believe Cottonwood started out as a County hospital.) I'm sure there were more hospitals, but let's just take those 5 as examples or charitable (and in 2 cases government sponsored) organizations that offered health care to all--even if they didn't have insurance. In those days, of course, medical care did not have all the life-saving qualities that it does today, and more often than not a trip to the hospital meant a trip to the mortuary shortly thereafter.
My first question is when did hospital/medical care move away from being a charitable or government sponsored responsibility of society and become a big business or industry? My second question is should medical care be a profit-making concern? It would seem that people often see medical care as life-saving and that a business that charges for saving one's life is somehow mercinary. In other words, people might feel exploited by a health-care provider who says "we won't save your life unless you give us money."
I realize, of course, that the situation is much more complex than this, but it does throw a received value (charity/compasion for the sick) into sharp relief.
I guess I ask questions because I do not know the answers to the complex problem that Steve has represented here in health care. I tend to favor a more conservative approach (gasp!) that says it is the responsibility of a society to care for the sick and the downtrodden. Why is that conservative? Well it has been a notion that has been floating around for a very long time in humanity.
Theorris,
An interesting twist on the point you raise (whether health care should be done for profit) is the topic that is being studied by the Legislature's Health Care Task Force -- which at times seems to be whether non-profit systems should be allowed to exist and compete with for-profit systems. Of course, it is more complex than that, but it is interesting how the tables have turned.
The VA a model of efficiency? Yikes! How many people do you know that have first-hand experience with the VA health care system? It has it's high points, to be sure, but it also has substantial problems.
When I lived in Norway, people there could not imagine not having government-provided universal health care. But my experiences with their system was that it universally provided long wait times, substandard care, and all the bedside manner a cold government bureaucracy could provide. But everyone could get it.
Our health care system is rife with problems. Because of how we structure our system of paying for care, the system is confused about who its cusomter is. I don't see how further obfuscating the economic relationship between the patient-customer and the provider is going to improve this. In this view, neither Mitt Romney's insurance for everyone, nor Mr. Ashdown's government care for everyone is the right answer. Mr. Ashdown is right about how much money that goes into our system is spent for stuff other than care, but only economic efficiency can resolve this. Universal health care will not.
Yikes is right! My husband is an officer in the army and although I have only worked with a VA hospital once, I have become intimatly aquanited with it's efficiency.
My only experience with a VA hospital resulted in my completely healthy husband having his heart examined from the inside because of a misdiagnosis. There was no recourse or anyone who would even take responsabilty for the misdiagnosis AND if it hadn't been for a letter threatening to involve our congressman and others we would have been stuck paying the $12,000.00 bill.
After 14 years in the military, I have learned how to navigate the army health care system but boy oh boy I don't look forward to my husband's retirement and that efficient VA health care.
I know folks who can tell other horror stories of PRIVATE medical companies along with insurance horror stories. It is not just a government inefficiency issue here, and I would hate to see this thread turn into a bash the government at all costs thread. It seems like the whole medical industry needs an enema. I say the insurance companies should start playing hardball with care providers and refuse to pay their outlandish prices. The care provider SHOULD NOT be able to go after the insured: insurance should cover it all (with appropriate co-pay) or nothing and the medical provider should not be able to sue the living daylights out of a person who THOUGHT he was covered.
M. Taylorsville,
Yes, it is all very complex. Defensive medicine is also another big driver of cost -- medical tests and procedures that are almost certainly not needed but would shore up a future medical malpractice case were something unsuspected to occur. And an awful lot of defensive medicine is paid for (which means "wasted") with Medicaid dollars.
So are you leaning towards or suggesting tort reform, Steve?
Yes. Good question. I'll do a post on tort reform.
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