Testimony before the Health System Reform Task Force on Authentic Charity Care

Tuesday, December 16, 2008

Mr. Chairman, and the Task Force, thank you for allowing me to present an argument in behalf of, what Sutherland feels is, a vital component to health care reform in Utah: authentic charity care.

We forwarded our recommendations to you last Friday.  I hope you have had time to look them over and get familiar with them so that I might focus more on explaining the need for this policy.

Broadly speaking, our policy purposes are to, first, reverse the ever-growing burden on taxpayers from Medicaid and other state government-driven programs, second, as the best alternative to reversing this trend, promote private-sector solutions to our health care needs, and, third, build community in the process.

As we state in our paper, the goal of our authentic charity care plan is “to create a coordinated, private-sector approach to universal, basic health care for Utah’s neighbors in need.”  I’d like to address each one of those concepts individually.

First, the word “coordinated.”  Most of us remember the first President Bush extolling the virtue of a “thousand points of light.”  Of course, he was right to do so.  In the case of charitable health care in Utah, many people are going the extra mile to help our neighbors in need.  But the needs are much greater than even the heroic efforts that do occur.  Sutherland recommends the creation of a state-chartered Community Health Foundation to meet this greater need.  In other words, while we are championing the power of charity, we are not suggesting that the real medical needs of our indigent and needy uninsured be left to “invisible hands,” to borrow Adam Smith’s term.

What we’re recommending is a focused, centralized, coordinated effort.

Second, authentic charity care requires a “private-sector approach.”  Ronald Reagan is famous for reiterating the expression: “as government expands, liberty contracts.”  In economics, we call this relationship “crowding out.”  The more government gets involved with something, the less of an opportunity exists for the private-sector to play a role.  We remember what Charles Dickens wrote through the mouth of Ebenezer Scrooge, in A Christmas Carol. When the charities came calling, Scrooge replied: “Are there no prisons?  And the union workhouses?  Are they still in operation?…I help support the establishments I have mentioned [through taxes] – they cost enough; and those who are badly off must go there.”

Authentic charity care is “crowded out” by government programs in two ways.  It occurs directly by the growing amount of tax dollars we commit to government-driven health care, leaving less discretionary dollars in the hands of Utah’s families – even if they want to help their neighbors in need, they can’t, because you can’t give what you don’t have.  But, perhaps more consequential, “crowding out” occurs indirectly by distorting current charitable efforts through endless waves of laws and regulations that define “charity” as only the force of government can – in other words, the government will tax us for programs for the needy until it’s no longer politically or fiscally feasible, and then, whatever needs are left, it forces the private sector to provide.  Left with few alternatives, health care providers respond by budgeting a nickel here and there or, most often, resort to “cost-shifting” where non-paying customer Peter robs paying customer Paul to meet the “charitable” need without Paul even knowing he’s been robbed – except those times each year when he gets notified that the price of his health care just doubled.

By “private-sector approach,” Sutherland means a private, voluntary, truly charitable approach to providing medical services – in a way that can effectively compete with government.  You know, I’m afraid we will soon reach the point of creating a black market for compassion.  We can’t let that happen in Utah, not to us.  To this point, you might note our recommendation to create a non-refundable, generous, tax credit.  It’s one of the few ways we see to correct current distortions caused by “crowding out.”

A third key word in this plan is “universal.”  I think we often miss this basic proposition in health care policy: all of us need medical services at one time or another, and not all of us can always afford them.

This Task Force, commendably, has spent a great deal of time looking at ways to make health care more affordable to more Utahns.  A lot of focus has been on insurance – on making private insurance more affordable and more available.  I think we assume that the “insurance track” is the savior of our health care problems, and then we put blinders on to innovation in meeting the real objective.  Now, perhaps I am mistaken, but I don’t think the objective of this Task Force has been to advance the cause of government-driven health care.  In fact, I have viewed the objective of this Task Force to be quite the opposite – to make sure that public policy does not stand in the way of Utahns getting needed medical services.

In that cause, private insurance is just one option, albeit a plentiful option.  Other people pay cash.  And still others, many others these days, rely on someone else to cover their medical expenses.  But the basic proposition holds: when we’re sick, we need medical services – however they come to us.

When Sutherland uses the word “universal,” we mean that every indigent and needy uninsured neighbor of ours in Utah will get the medical services they need.  That goal, no matter how well-intended, will never be met through a combination of distorted free markets and aggressive government programs.  It’s like running a marathon with two crippled feet, except worse in this case because there’s this large crowd cheering you on to an outcome that you can’t possibly achieve.  Here is the heart of the problem with government trying to care for the full universe of medically-needy: our current government programs require “eligibility” and that means someone always will be ineligible.  If someone sick earns $1 more than the eligibility cap, they are ineligible for assistance, but remain just as sick as if they earned a dollar less.  Of course, this failure of policy is the exact reason why so many people today push for expanded government services and, ultimately, socialized medicine – they don’t want anyone to go without needed medical services.

And, fact is, neither do we.  No decent person would.  That’s one huge reason the Sutherland plan of authentic charity care is so compelling – it has no eligibility roadblocks.  Our proposed network of state-wide charity care clinics would help any needy Utah resident, with any medical problem, at any time.

And that objective leads me to the fourth key word in our plan: “basic.”  By “basic” health care, we mean whatever medical services are necessary to make a Utah resident healthy and productive.  If I was sick, all of the sudden the word “basic” would mean whatever it takes to make me whole.

There are two keys in meeting this definition.  The first key is to understand that there is a complementarity between a culture of charity and a culture of self-reliance.  You cannot have one without the other.  In other words, we can’t have an authentic charity care system without also the universal expectation that we’ll work personally to stay healthy and that if we can pay for our medical needs, we will.

Interestingly, government does not and cannot depend on this sense of social reciprocation.  Government programs can’t negotiate this social reciprocation because government programs are too often seen as “entitlements” – and if a consumer views medical care as an entitlement, he will not be as diligent in making healthy choices as he otherwise might if he knew his neighbors were sacrificing for his benefit, nor will he care about paying his own way.

The second key is to insist that all of us be united in meeting this definition of basic care.  Sutherland’s plan incorporates layers of charity care starting with a state-wide network of free clinics.  These clinics would be supplemented by associated advanced services, such as regional surgical centers (also charitable) and all of the good work currently being done by Utah’s hospitals and other high-end providers – all working in unison to meet the medical needs of those who cannot afford them.

I will be the first to admit, that under current social, cultural, and political winds of change, the Sutherland plan is bucking the trend toward more and more government health care.  I know it’s a test of the goodness of our community and an experiment in the power of freedom and compassion in behalf of our neighbors in need.

But I believe it can be done.  Charity has powers that governments do not have.  Charity can change the human heart and charity creates strong bonds of lasting community.  Governments can’t do that.

The Sutherland plan for authentic charity care is not a pipe dream.  It is sound public policy.  In the equation of health, our plan replaces the duo of distorted free markets and aggressive government with a new duo of truly free markets and charity.  I know the work of this Task Force has been aimed at the former; our plan addresses the latter.  It would come closer to accomplishing what we all want than any other system we could possibly invent to help those who cannot help themselves.  The incentives are right.  The price is right.  The results are right.

Even better, by serving temporarily needy people through authentic charity care, Medicaid and other government-provided health care services would be able to focus their scarce resources on our neighbors who are permanently disabled or who are in long-term care facilities.

As this Task Force continues in its wisdom to make health care in Utah more affordable for more people, Sutherland is asking you to carve out at least one little corner of your comprehensive plan for authentic charity care.  You must trust that the private sector will respond.  I have great confidence in that, especially in this state.  People will be helped, taxpayers will be less burdened, and we will build real and lasting community in the process.

Thank you, Mr. Chairman and the members of this Task Force for allowing me to share these thoughts with you this morning.