Be careful what you wish for

Opinion: April 12, 2012 at 12:00a.m.

By Caroline Poplin

McClatchy-Tribune

As we wait for the Supreme Court to render its verdict on health reform in June, there is an important question to ponder: Does American exceptionalism extend to health care? Are we different than other advanced democracies?

The country was jolted by the vigor of the conservative justices’ attack on the Affordable Care Act, “Obamacare.” It is now entirely possible that the five-man conservative majority will hold the centerpiece of the law, the individual mandate, unconstitutional, along with the requirement that insurers cover high-risk customers for the same price as healthy ones. Indeed, the court may overturn the whole act.

Democrats are dismayed; Republicans are encouraged. But let’s consider the larger picture.

The ACA is America’s best shot at providing universal health care through the private insurance market. Most of the rest of the developed world has abandoned private health insurance in favor of systems closer to single payer, where everyone receives comprehensive benefits paid for by taxes or tightly regulated prices. So far, these systems have achieved better health outcomes for a fraction of what we pay.

There is a reason private health insurance, which served us well for many years, is failing in America now. In the last half-century, medicine has been completely transformed.

Insurance works best where there is a large group of people at low risk for the covered event, which is rare, limited in time and cost, unpredictable as to individuals but actuarially predictable for the group. Think automobile accidents.

Illness and injury were once like that: you never knew who would break a leg, get pneumonia, or have a heart attack. The stricken individual would get surgery, or the few medicines we had, and recover or die.

Life-changing advances

Modern medicine has changed all that. As we learn more, and can do more, diseases which used to be acute and rapidly fatal — cancer, heart attacks, even HIV — have become chronic. With appropriate treatment patients can live with their illnesses for decades. Treatment is becoming more expensive, and, as with HIV or heart disease, lifelong.

So, much disease is now common, predictable and expensive.

The core competence of insurers is risk management: it is up to them to evaluate risks, and charge enough to cover anticipated losses, with something left over for themselves.

In this country, most people are healthy most of the time. Insurers compete vigorously for healthy customers by offering low premiums. Too many sick patients in the pool can ruin an insurer’s day, and force it to raise premiums. Higher premiums can drive the healthy customers into the arms of a competitor. Insurers call this the “death spiral.”

Modern medicine allows insurers to identify high-risk, high-cost customers early, and avoid them. That is why, unless it is tightly regulated, insurance is often unavailable to those who need it most, and insurers drop sick patients at the first opportunity.

The individual mandate in the ACA addresses this problem by forcing the healthy in with the sick, which means healthy customers’ premiums would likely go up.

So maybe other Western countries had good reason to go with a public insurance model, where everyone is really in the same pool, pays the same, gets comprehensive benefits and the government regulates provider prices.

The ACA is the last, best chance for Americans to receive health care through a private insurance market. If the Supreme Court throws out the individual mandate, we will have to decide whether we are all in this together, or one’s freedom to choose to participate is even more important. This decision will test the American character.

Caroline Poplin, a physician and lawyer, is a consultant to the Social Security Administration and law firms. Distributed by McClatchy-Tribune Information Services.