BY KEN ROBERTSON
Before you get started reading this and the next few columns I am writing, please Google “Chesterton’s Fence” or “Chesterton’s Gate.” The premise of the concept is that you should not criticize or agree to change something until you understand how it came to be in the first place.
The intent of my columns will be to dig a little deeper into “how we got here,” so we can hopefully do a better job when flu season rolls back around during the last months of 2020. I think most people don’t want to again be confined to their homes, become deathly ill, join the ranks of the unemployed, or watch politicians spend another $2 trillion that we must either borrow, create out of thin air (the Fed and the U.S. Mint), or have Americans agree to raise their taxes to pay it back. (Yeah, right.)
Let’s start with why we ran short of the personal protective equipment used by medical staff and first responders. For the past 20 years, medical costs have soared as four major trends combined for a perfect storm.
First, modern American medicine has more innovative procedures, more medicines, more analytical equipment, and more expensive treatments than ever before. Most Americans want all of these advantages when we get sick. That costs more.
Second, most Americans now consume a terrible carb- and fat-filled diet, resulting in a huge percentage of our population qualifying as either overweight or obese. Our jobs and our lifestyle tend to be more sedentary, further increasing our chances of high blood sugar (type II diabetes), some cancers, and heart disease. That increases demand for medical services, and increased demand leads to increased cost.
Third, the baby boomers (born in 1947 or later) started hitting age 65 in 2012. We are eight years into the wave of an increasing Medicare population entering the phase of their life when age-related illnesses begin to mount. Increased demand increases cost. The medical reimbursement rates for both Medicaid and Medicare seldom cover the actual cost of the medical service provided. Our health care providers have historically depended upon employer-based private insurance to reimburse medical providers at a rate high enough to cover the shortfalls of both Medicare and Medicaid patients.
Fourth, as American employers had to compete with low wage and low regulation countries (mainly China), in order to keep their products cost competitive, they have been doing everything in their power to drive down medical insurance premiums. In harmony with that cost-reduction effort came stagnant U.S. wages, labor headcount reductions, and many U.S. companies sourcing raw materials from China. The medical community was not immune to these cost-cutting pressures, so they did it too. We asked them to reduce costs and they did.
The end result is that most of our medicines and most of our protective equipment aren’t made here anymore. We told the medical community to reduce costs. They did exactly what we asked them to do — exactly what we did ourselves, buy Chinese.
Most companies do not carry large inventories of raw materials that are not needed in the short term. Most companies to not build excess production capacity, and most hospitals do not build excess ICU beds because it costs more and has no added short-term financial benefit. Industry and the medical establishment don’t do anything that raises costs without a known financial return.
When American companies did not have to compete with the Chinese, we had good medical insurance. Companies could afford it. The federal government could pretend it was paying for poor people to get “free” medical care (Medicaid) and pretend to pay for healthcare for the elderly (Medicare) when in reality both were heavily subsidized by employer-based medical insurance. The music has stopped and there are not enough chairs. There is no such thing as a free lunch.
People want to blame a scapegoat. President Trump is an easy target. I want to ask you a few thought provoking questions:
Most Americans claim they want to see a higher minimum wage, like $10/hour or $15/hour. Many people vote for politicians who support higher minimum wages. We get to vote for free. When you buy products, do you buy more expensive products made by Americans or do you buy products made by Chinese workers who live in dormitories, work six days a week, and make less than $3 or $4/hour. When it really mattered, did your purchase provide $3/hour jobs or $13/hour jobs?
Most Americans claim they want to see factories and land development not harm the environment. Many people vote for politicians who support more stringent environmental regulations. We get to vote for free. When you buy products, do you buy more expensive products made in America, where those greener environmental standards are enforced, or do you buy products made by Chinese companies who create so much pollution they had to close factories so athletes could breathe clean air and safely compete in the last Olympic games? When it really mattered, did your purchase support a company that pollutes or one that does not pollute? The same argument can be made for worker safety.
When the new coronavirus hit, and we needed to ramp up production quickly, that production capacity was not in the U.S. It was in a communist country an ocean away. Chesterton’s fence asks us to first examine how and why we found ourselves in such a predicament. Before we blame the president, the governor, or the hospital management, let’s look in our mirrors. We do not need to keep making these short-term bad decisions with long-term horrific consequences. The choice is now ours: We can repeat the same mistakes or we can change.
Ken Robertson is an Iredell County commissioner.