A Somewhat Imperfect Market-driven Solution to the Health Care Problem

bqswznuphr The reason no one has been able to solve this county's health care problem is that debate over this contentious issue has been focused in the wrong direction. Despite what all the politicians, insurance companies and health care providers claim, the problem is not that too many Americans do not have health insurance. The problem is that too people do.

Since health care is so expensive, most people must buy insurance either on their own or through their employer. The problem starts with the nature of insurance. Since the insurance company pays the medical bills, most consumers don't really feel the true cost of their doctor visits, hospital stays and labs tests. They may see the bill the provider sends to the insurance company, but they know they don't have to pay it directly.

In any case, there seems to be no correlation between the bill and what the insurer actually pays and the provide accepts. How often have you seen a doctor or hospital charge $1,000 for a procedure only to see on the insurance company statement that the doctor or hospital was paid maybe $200 and they accepted it as payment in full? Something is wrong here.

Medical insurance, of course, is basically a great scheme for collecting money from many people, working stiffs and taxpayers, and handing it over to a few doctors and hospital owners. Currently there are no incentives for doctors and hospitals, or for that matter insurance companies, to control costs. The money is just passing through the latter to reach the former.

Requiring that everyone have health insurance will not solve the problem. In fact, insurance only drives up costs. It can't reduce them. The further people get from actually paying for what they want or use, in this case medical services, the more likely they are to want them and use them. The more they use them --more frequent visits to the doctor, more complex and costly tests-- the more costs will increase. The more people doing this the more costs will go up.

To stop this vicious circle, health insurance should be eliminated, and everyone should be required to pay for their medical care on their own. Once doctors and hospitals stop getting paid by insurance companies and instead have to rely on the meager resources of real working people, they will see their incomes fall. At which point they'll have to lower their fees till they're affordable to people instead of to insurance companies.

After all, how long do you think do you think doctors could go without payments from their patients' insurance companies or Medicare. They have to make payments like everyone else on their Mercedes, their fishing boats, their offices, their homes, their summers homes, their winter homes, their...

Before long the doctors will have to adjust their fees so that people who drive Civics, fish off the pier and own one home, or no home, could afford their services.

Maybe for a while, before doctors and hospitals lower their fees, a few people will go without needed medical care. Some heart bypasses may be bypassed. A few people may die. A few children may not get the care they need, and a few expectant mothers may not get the care they and their babies should have.

Come to think of it, isn't that what's already happening.

The battered American syndrome

The attitude of most Americans toward attempts by their government to "help" them is not dissimilar from the attitude of woman suffering from "battered wives syndrome." They believe the next time will be better than the last time. Whatever happened before, no matter how often, won't happen again. They'll give him, or it, another chance.

The result, however, is usually disappointment, bruises, scars or worse. But the scars heal, the bruises fade and the disappointment turns into hope. Rarely, it seems, is the result disillusionment or even long lasting insight. Today, despite past experiences and numerous failed examples of previous efforts of the government to deliver on its promises, many Americans believe their government can actually deliver a health care system that is better than what they already have.

Granted what they have is not perfect. Too many people don't receive the health care they should get because they can't afford the care or the insurance that'll enable them to get it. Others simply can't get it because know one will offer it to them or they don't work for an employer who offers it. Or, they don't have an employer. Still other don't buy insurance simply because they don't think they need it since they are young, healthy and immortal and therefore won't die. Instead they spend the money they've saved by living with their parents to buy a faster car or motorcycle that will accelerate from zero to death in 12 seconds, letting taxpayers cover the expense of peeling them off the pavement or unwrapping them from around the tree.

We, of course, already have a government health care program. It's called Medicare. It's modeled after that other great American Ponzi scheme, Social Security. Together these programs provide the elderly with retirement and health care benefits. Most recipients are happy with these programs because the benefits can be very generous. For example, while most working people have to make do with the limited choices of HMOs, Medicare recipients can go to any doctor they want. Since the elderly vote, and in some Midwestern cities they vote even after they've died, Congress has been very generous with those benefits.

But Medicare is no more an example of a successful government program than was President Johnson's War on Poverty, which poverty won; the U.S. Postal Service, which is considering cutting Saturday delivery while raising rates; or FEMA's response to any recent natural disaster. Medicare and Social Securty are slowly bleeding the country dry. Sometime this century all collected federal taxes will to go to pay for elderly entitlements.

Simply put, Medicare and Social Security are huge wealth redistribution programs in which money is taken from those working and earning to be lavished on the elderly who aren't doing either. A government health care program for everyone not covered by private insurance, which in time will be everyone, will, according to the Obama administration, be very different. It will be a huge wealth redistribution program in which money is taken from those working and earning and lavished on anyone who isn't doing either.

The fatal flaw with this approach is the same one Margaret Thatcher identified as the problem with socialism, "eventually you run out of other people's money."