'Sicko,' Health Care and SCHIP

Aug. 5, 2007 — -- Michael Moore's movie "Sicko" is deeply troubling. Critics have objected to its various stunts, its flip title and slight distortions, but its basic points are on target. The United States spends an enormous amount of money on health care, yet there are approximately 45 million people who are uninsured.

Included among them are illegal immigrants and some who could easily afford insurance. Perhaps more significantly, there are countless millions who have insurance but whose reasonable and justifiable claims are routinely denied.

No other developed country lacks universal coverage, and others that spend considerably less on health care, such as Britain, Canada and, particularly, France, achieve better results, including greater average longevity. Perhaps needless to say, the legitimate interest of insurance companies, HMOs and others in saving money is often at odds with providing needed care.

(Not unrelated to health care is vacation time, another area in which the United States differs from other developed countries. A report by the Center for Economic and Policy Research states that the United States "is the only advanced economy in the world that does not guarantee its workers paid vacation." Other industrialized countries offer their work forces a government guarantee of annual paid vacations. In Britain, it's 20 days of compensated leave, in Germany 24, and in France 30! The United States guarantees zero days, and even those Americans who do get paid vacations take an average of just 12 days.)

But how can health care in these other countries be "free" as "Sicko" and many experts claim? Well, it is and it isn't. People do pay more in taxes, but they don't pay for insurance premiums, associated and often inflated medical expenses, and the burdensome blizzard of insurance paperwork. Other approaches such as mandatory private insurance also play a role in some cases.

The bottom line is that universal coverage, done right with appropriate incentives, reasonable limitations, etc., can result in better and lower cost health care. Of course, this doesn't dictate that we emulate any existing system.

Uninsured Children and SCHIP

Of course, there's an army of ideologues and lobbyists who will depict the push for universal coverage as a nefarious effort to undermine the free enterprise system. Witness President Bush's recent rejection of pleas from even a majority of fellow Republicans to compromise with Democrats on renewing the State Children's Health Insurance Program (SCHIP) that gives health coverage to millions of children whose parents don't qualify for Medicaid, yet can't afford private insurance.

This popular decade-old program, which would cost between $7 billion and $10 billion more dollars per year to retain (financed by increases in tobacco taxes), will expire at the end of September if it's not renewed. True to the politics of nope, Bush has threatened to veto it if it passes Congress.

The incongruities are almost too painful to note. Spending $1 trillion ($1,000 billion) on the utter debacle that is Iraq has not made us safer from international terror. Spending a few billion dollars on a children's insurance program that has worked will make us safer from the domestic terror of facing life-threatening illnesses without medical care.

Moore's many case histories poignantly illustrate this -- sick people being dumped on skid row by health care facilities, parents moving into their children's basements after being bankrupted by medical bills, children dying from minor illnesses because their mothers are refused urgent care at the nearest hospital. The administration's priorities are ... supply your own adjective here.

(A caveat: If SCHIP or some other program is effective, why not extend it to all Americans? One problem is that of scale. Programs that work for small groups don't always do so when scaled up to the nation as a whole. A prosaic instance of such nonlinearities occurred to me at a pizzeria recently where the small 8-inch pizza sold for $10 and the large 12-inch pizza went for $15, despite the fact that the larger one was more than twice the area of the smaller. More generally, scaling up can change the costs and payoffs of any policy significantly.)

Give Me Poverty or Give Me Death

"Give me poverty or give me death" doesn't quite have the rousing ring of Patrick Henry. It's heartless to give gravely ill and uninsured people the Hobson's choice of either dying or impoverishing themselves to pay for medical care. Of course, that's not quite right since, as Bush recently observed, "People have access to health care in America. After all, you just go to an emergency room."

As has often been noted, however, emergency rooms are expensive and inappropriate for routine care. It's better for patients and cheaper for everyone else when patients get care and preventive treatment at a doctor's office, the sort of medical care that the extension of the SCHIP program is designed to provide.

Providing needed medical care to all is a monstrously complex subject (expenditures on health care were $2 trillion in 2005, about 17 percent of GDP). As indicated, the present system suffers from inefficiencies, absurd administrative expenses, exorbitant prices, bad management, fraud and waste. There are countless ways to improve it and achieve universal coverage -- most consistent with a vibrant private sector.

The solution to the problem is technical requiring the combined expertise of doctors, actuaries, business people, operations researchers and policy wonks of all sorts. At its base, however, the crisis in health care is an ethical issue. Acknowledging its extent and not succumbing to ideological biases and economic special interests are two necessary first steps to resolving it.

Seeing "Sicko," a funny, but deadly serious movie, might help too.

John Allen Paulos, a professor of mathematics at Temple University, has written such bestsellers as "Innumeracy" and "A Mathematician Plays the Stock Market." His "Who's Counting?" column on ABCNEWS.com appears the first weekend of every month.