POLITICS MAY 3, 2010
A lot of people laughed when Sue Lowden, the Nevada Republican running for the U.S. Senate, suggested last month that people start paying for their medical care with chickens. I didn’t. I thought about my late grandfather Kurt, a family doctor who practiced in Brooklyn starting in the 1940s. His office was in the basement of his house and his clientele (like him) was very Jewish. He never mentioned getting paid with a chicken. But it seems entirely possible that somebody, at some point, offered up some poultry--and that, for the next few nights, it was matzoh ball soup for dinner at the Cohn household.
I would be more certain that Grandpa Kurt had been paid with chickens if he had started practicing 10 or 20 years earlier. Before the 1930s, when modern health insurance first appeared in the United States, most people paid for medical services with whatever resources they had on hand--which usually meant cash but, yes, sometimes meant goods for barter. Either way, they frequently ended up bargaining with their doctors over prices, just like Lowden suggests they did. Laugh if you want, but her sense of history isn't that far off.
Lowden’s longing for that era, however, really is baffling. She may think that paying your doctor bills out of your own pocket is a great way to finance medical care. But the people who actually lived in the 1920s and 1930s were desperate for an alternative.
Medicine had undergone a revolution by then. Development of the sanitary technique, better understanding of anesthesia and other advances meant doctors and hospitals had unprecedented ability to treat and cure disease. But that care cost money, and soon it was more than most people could afford. When you got sick, you went bankrupt paying your bills or simply went without treatment.
The answer was for large groups of people to share the burden of medical bills collectively--in other words, to spread the financial risk of illness through the creation of insurance. Everybody paid a little, in the form of premiums collected every month, so that nobody had to pay a lot when injury or illness struck. The idea was instantly popular and, within a few decades, virtually everybody who could afford to buy coverage had it.
Today you can still find people find people bartering for care, mostly in rural areas. But insurance is generally the payment method of choice--and, to hear some conservatives tell it, that's becoming a problem. As The Democratic Strategist’s Ed Kilgore recently observed, it’s a “bedrock conservative conviction that reliance on health insurance, private or public, is what's driving up health care costs.” If insurance didn’t provide so much insulation from medical expenses, the argument goes, people would try harder to find lower prices or simply consume fewer medical services. To be fair, even many liberal economists would agree that overly generous insurance can create incentives for spending too much money on medical care.
But conservatives have argued for stripping down health insurance to the point where many people simply couldn’t afford treatment anymore. A family making $40,000 a year simply can’t find $10,000 to cover out-of-pocket expenses. (That’s a lot of chickens!) Sensible public policy shouldn’t ask people to reduce that health care bill by bargaining with their doctors over prices. It should prevent that kind of financial exposure in the first place.
Also embedded within candidate Lowden’s argument is another increasingly familiar claim about health care spending: That the problem with spreading risk through insurance is that it forces healthy people to subsidize the sick, thereby punishing people who take good care of themselves in order to pay the high bills of people who don’t.
Again, there’s a reasonable version of this argument: Health insurance rates should reward good behavior, like quitting smoking or taking steps to control cholesterol, that reduce costs both for individuals and society as a whole. But many medical problems are the product of sheer chance, whether it’s getting hit by a car or developing cancer. The solution is, or should be, to minimize the impact bad luck has on people’s lives by encouraging spreading risk through insurance.
Unfortunately, private insurance has become increasingly inadequate to this task over the last20 to 30 years. As the cost of medical care has grown, it’s been harder to find affordable coverage. Insurers haven’t done enough to drive down prices on their own and, in response, they’ve actually fostered the separation of healthy and sick. As a result, more and more people have found themselves in the same situation as those people in the 1920s and 1930s: medical bills they have no way to afford.
Health care reform represents an effort to reverse that trend, by making sure everybody can find an insurance policy and making sure everybody has the money to pay for it. And, in a sense, Lowden has performed a public service by reminding everybody what the alternative is: Making health care costs more and more of an individual responsibility, to the point where--yes--some people will end up bartering with fowl.
As my Grandpa Kurt would surely have agreed, chicken soup is a fine way to treat some illnesses--and a lousy way to pay for them.
Jonathan Cohn is a senior editor of The New Republic. This column is a collaboration between TNR and Kaiser Health News. KHN is an editorially independent news service and is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization, which is not affiliated with Kaiser Permanente.