Yesterday my hometown newspaper had an article about how Bush's health care plans are proceeding at a faster pace than his efforts to wreck Social Security. We can't quite talk about his plans for health care is an intent to wreck, because the system itself is in such ill repair that wrecking it would almost be superfluous. For a quick overview, take a look at the recent book by Donald L. Bartlett and James B. Steele, Critical Condition: How Health Care in America Became Big Business -- and Bad Medicine (2004, Doubleday). I just finished reading this book -- mostly stuff that I already knew, but spelled out in detailed case histories that even I found shocking.

The Bush plans are centered around Health Savings Accounts -- yet another tax-avoidance scheme for the rich -- tied to mandatory high-deductible catastrophic health insurance. As far as I can tell, there are two ideas here:

1. If you're rich enough, you can finance your own health insurance; if you're healthy, you'll save some money that way, and if you're not, you're still covered for worst case scenarios.
2. If you run a business, you can push your employees into this sort of plan, cutting your insurance costs by shifting them to employees. If they're healthy, they may not notice; if not, they won't be your problem.

The net effect is to force individuals to manage their spending decisions on health care, much as they decide whether it's worth the extra money to buy a brand name detergent vs. the store brand. Economic theory tells us that responsible shopping would wring a lot of wasteful overtreatment out of the system. The problem is that health care doesn't work like detergent. With detergent you go to the store, look at a shelf with 5-20 alternative choices, look at the prices, read what little info is provided by on the boxes, and guess which one to buy. If it works, fine; maybe you can experiment with a lower-priced one, or maybe the potential savings on the lower-priced one doesn't matter enough to bother. If it doesn't work -- if, say, it destroys your clothes -- you throw it out and never buy anything like it again. Worst case is you have to buy some new clothes. With health care, you know next to nothing about what's wrong with you or what one doctor vs. any other doctor might do about it; you don't even know what they'd charge. You can't even get that information -- if doctors had to sell you on every detail of their practice and competence they'd never have any time to treat you. In many cases the doctors would rather not treat you, so you usually wind up begging and hoping, and are stuck with whoever will see you. Moreover, the worst case scenario is you die.

Given this, all that making you spend your own money to get in the health care door means that those who cannot afford it will avoid the door as long as they can -- in many cases allowing their diseases to become critical, in some cases fatal. That this would happen isn't mere economic theory: we have more than 40 million people in the U.S. right now who have no insurance, and a great many more who have inadequate insurance -- including many with the sort of high deductibles that come with the HSA scheme. Many of those people are undertreated for their ailments; many die, and many suffer needlessly. Pushing high-deductible health insurance means that more people will fail to get necessary health care.

However, the silver lining in Bush's proposals comes in the form of government-backed catastrophic health insurance. The need for this was shown in an article in today's newspaper, titled "Bankrupt cite health bills as a top woe." As you may know, bankruptcies have increased virtually every year in the last two decades. The article attributes 50.35% of all bankruptcies to illness or medical debts. The article also points out that 68% of those filing bankruptcy for reason of illness or medical debts actually have insurance. The problem is that many private insurance company plans max out at some limits -- i.e., they don't really insure you against illness or injury -- and many more disallow claims for myriad reasons. Bush's plan won't help anyone lead healthier lives, but it should at least cut down on some of the bankruptcies. That would be a good thing, but note who benefits: the creditors, i.e., the health care industry and the bankers. That, at least, is a constituency Bush cares about.