I enjoyed reading this account of the March on Washington. I hope his take is correct!
Here is another one.
Monday, September 14, 2009
Tuesday, September 1, 2009
Diagnosing and Treating What Ails Health Care
I've had a pretty busy summer, so I haven't posted in awhile. Not that there has been any shortage of material! I've been chomping at the bit to weigh in on the ongoing saga of the Democrats' quest for health care "reform". I put quotes around the word "reform" (there, I did it again) because the Democrats' plan would do anything but "reform" health care in America.
In fact, what the Democrats have been proposing to do, rather than treat the disease, would actually provide more of the pathogen that has led to the health care system being in its current condition. Before we try to cure the disease, we need to identify its causes, because I think it is abundantly clear that most of the politicians (including some Republicans) have not taken a close enough look at the patient to make a diagnosis. (As you may have guessed, I shall be using a lot of medical analogies in this post!) Let us start by looking at the symptoms...
The primary symptom is that medical costs are rising much faster than inflation. In fact, because nearly every other symptom of the current state of health care, such as accessibility, can be tied directly into this one, I will deal exclusively with this one in this post. Now, what can cause this particular symptom? Econ 101 anybody?? I can think of three relevant potential causes:
(1) Restrictions in supply, i.e. a large decrease in available health care facilities or doctors, or a tax or some other cost that makes it more expensive to treat patients or produce medication (or a glut of frivolous lawsuits);
(2) Increased demand, such as might occur when people get health care at either a reduced cost, or if the cost to them is in some way hidden, such as where their insurance pays for doctor visits, leading to only a marginal increase in premiums over time, or if the cost is entirely borne by someone else, as in the case of Medicare/Medicaid (I can cite many examples of seniors who, simply responding to the incentives created by reduced cost, use unnecessary doctor visits for a social outing). Note I am not saying that people are going to the doctor because they are suddenly a lot sicker than they used to be; what I'm talking about is people going to the doctor for a common cold, or to the emergency room for a hangnail. Okay, slight exaggeration on that last one... I hope.
(3) Lack of information and/or competition. That means that, because health care is such a necessary service for people when they are really sick, they tend not to care too much about whether Dr. Smith is more expensive than Dr. Jones. Add to that the fact that neither Dr. Smith or Dr. Jones don't tend to let on to their patients how much they charge for, say, wound irrigation, and you wind up with consumers who are not only non-responsive to price, but who are ill-informed about price. Insurance is a big one here, too -- many people see health insurance as a necessity, plus there isn't a whole lot of competition between insurance companies to bring prices down.
So, what is the cure that the Obama Administration et al propose? A "public option" to compete with private insurance. Actually, on the surface, the competition angle at least sounds like a good idea. The problem, of which public option proponents tend to be dismissive when confronted with it, is that private insurance companies really can't compete with the government in terms of, well, the ability to print their own money. Plus, employers can hardly be expected to continue to foot the bill for providing insurance to their employees when the government will pick up the slack for them. Hence, the public option really just winds up being public provision of health care.
So, back to the point... the Democrats propose to cure the problems caused by excess demand and lack of competition by ultimately (1) providing universally-accessible health care that is (from the perspective of the consumer) virtually free, and (2) actually reducing competition by crowding private insurers out of the market.
Now that we have a diagnosis, what is the appropriate cure? My US Senator, Jim DeMint, has proposed a health reform plan that gets closer to the point, but I don't believe it goes quite far enough, plus I don't like the idea of shoveling TARP money into health care -- repaid TARP funds should go directly to paying down the debt that they created. Here are a few ideas that I've been chewing on -- I'll start with some that are already being discussed in other conservative health care reform plans:
(1)Tort reform... it's like the weather; everyone talks about it, but no one does anything about it! It is such an obvious part of reducing health care costs that I really see no need to discuss it further. Democrats ignore this important aspect of reform... given the number of liberal attorneys in the Democratic Party, I can't imagine why... hmm...
(2)Allow competition between insurance companies across state lines. This is a component of Senator DeMint's plan, and others.
(3) A tax credit or expanded deductions to help families pay for insurance premiums. Again, this is part of several other plans.
(4)Follow Wal-Mart's lead and start placing nurse-practitioners in retail pharmacies for handling minor ailments. This will reduce the patient load on primary care physicians and emergency rooms and will introduce a little competition, which will both have the effect of bringing down prices. This of course is a private-sector component, and not one of policy, unless there are any restrictive regulations that need to be altered or removed.
(5) This one was my Father's idea: Doctors, hospitals, pharmacies, etc., should be required to post their prices for consumers. This is simply a matter of empowering consumers with information to make good decisions, as in any other facet of the free market. Why are prices clearly posted for cabbage in Food Lion, but you go into the hospital with no idea how much your gall bladder surgery is going to cost? That creates an environment in which consumers (or insurance companies, as the case may be) can all-to-easily be taken advantage of.
(6) Do away with HMO's. They were created by the government, anyway (in a previous ill-fated attempt at "reforming" health care), and no one likes them. Plus, they reduce the ability of patients and doctors to determine appropriate treatment.
(7) This is probably the only one of my proposals that would increase government oversight into the private sector, which I hate, but if the goal is to bring down excessive demand for medical care it is an important component: Do away with comprehensive insurance (i.e. no deductible/copay). Allow insurance companies to adjust deductibles according to income level, but anyone who visits the doctor using private insurance has to pay something. This will make costs more visible to the consumer, and reduce the incentive to go to the doctor for frivolous stuff, like a paper cut.
(8) Here is my big one: Stop direct government payouts of medical benefits through Medicare/Medicaid. Use a portion of the savings from the reduction in costs of direct payouts and bureaucracy to provide Medicare/Medicaid recipients with monthly reimbursements for premiums to purchase private health insurance. The same rule applies regarding deductibles and copay as above, so that everyone but the most destitute will have to pay something for a doctor visit.
Again, these suggestions are just that -- they are certainly open for discussion and revision. And there are still some issues that these points still don't entirely address. However, I hope that they will underscore the point that we need to seek solutions that will address the underlying problems with health care, and not just blindly follow the "more government" mantra of the Left.
(Thanks to my friend, Dr. Michael Mikota, who allowed me to bounce some of these ideas off of him and provided some really good feedback!)
In fact, what the Democrats have been proposing to do, rather than treat the disease, would actually provide more of the pathogen that has led to the health care system being in its current condition. Before we try to cure the disease, we need to identify its causes, because I think it is abundantly clear that most of the politicians (including some Republicans) have not taken a close enough look at the patient to make a diagnosis. (As you may have guessed, I shall be using a lot of medical analogies in this post!) Let us start by looking at the symptoms...
The primary symptom is that medical costs are rising much faster than inflation. In fact, because nearly every other symptom of the current state of health care, such as accessibility, can be tied directly into this one, I will deal exclusively with this one in this post. Now, what can cause this particular symptom? Econ 101 anybody?? I can think of three relevant potential causes:
(1) Restrictions in supply, i.e. a large decrease in available health care facilities or doctors, or a tax or some other cost that makes it more expensive to treat patients or produce medication (or a glut of frivolous lawsuits);
(2) Increased demand, such as might occur when people get health care at either a reduced cost, or if the cost to them is in some way hidden, such as where their insurance pays for doctor visits, leading to only a marginal increase in premiums over time, or if the cost is entirely borne by someone else, as in the case of Medicare/Medicaid (I can cite many examples of seniors who, simply responding to the incentives created by reduced cost, use unnecessary doctor visits for a social outing). Note I am not saying that people are going to the doctor because they are suddenly a lot sicker than they used to be; what I'm talking about is people going to the doctor for a common cold, or to the emergency room for a hangnail. Okay, slight exaggeration on that last one... I hope.
(3) Lack of information and/or competition. That means that, because health care is such a necessary service for people when they are really sick, they tend not to care too much about whether Dr. Smith is more expensive than Dr. Jones. Add to that the fact that neither Dr. Smith or Dr. Jones don't tend to let on to their patients how much they charge for, say, wound irrigation, and you wind up with consumers who are not only non-responsive to price, but who are ill-informed about price. Insurance is a big one here, too -- many people see health insurance as a necessity, plus there isn't a whole lot of competition between insurance companies to bring prices down.
So, what is the cure that the Obama Administration et al propose? A "public option" to compete with private insurance. Actually, on the surface, the competition angle at least sounds like a good idea. The problem, of which public option proponents tend to be dismissive when confronted with it, is that private insurance companies really can't compete with the government in terms of, well, the ability to print their own money. Plus, employers can hardly be expected to continue to foot the bill for providing insurance to their employees when the government will pick up the slack for them. Hence, the public option really just winds up being public provision of health care.
So, back to the point... the Democrats propose to cure the problems caused by excess demand and lack of competition by ultimately (1) providing universally-accessible health care that is (from the perspective of the consumer) virtually free, and (2) actually reducing competition by crowding private insurers out of the market.
Now that we have a diagnosis, what is the appropriate cure? My US Senator, Jim DeMint, has proposed a health reform plan that gets closer to the point, but I don't believe it goes quite far enough, plus I don't like the idea of shoveling TARP money into health care -- repaid TARP funds should go directly to paying down the debt that they created. Here are a few ideas that I've been chewing on -- I'll start with some that are already being discussed in other conservative health care reform plans:
(1)Tort reform... it's like the weather; everyone talks about it, but no one does anything about it! It is such an obvious part of reducing health care costs that I really see no need to discuss it further. Democrats ignore this important aspect of reform... given the number of liberal attorneys in the Democratic Party, I can't imagine why... hmm...
(2)Allow competition between insurance companies across state lines. This is a component of Senator DeMint's plan, and others.
(3) A tax credit or expanded deductions to help families pay for insurance premiums. Again, this is part of several other plans.
(4)Follow Wal-Mart's lead and start placing nurse-practitioners in retail pharmacies for handling minor ailments. This will reduce the patient load on primary care physicians and emergency rooms and will introduce a little competition, which will both have the effect of bringing down prices. This of course is a private-sector component, and not one of policy, unless there are any restrictive regulations that need to be altered or removed.
(5) This one was my Father's idea: Doctors, hospitals, pharmacies, etc., should be required to post their prices for consumers. This is simply a matter of empowering consumers with information to make good decisions, as in any other facet of the free market. Why are prices clearly posted for cabbage in Food Lion, but you go into the hospital with no idea how much your gall bladder surgery is going to cost? That creates an environment in which consumers (or insurance companies, as the case may be) can all-to-easily be taken advantage of.
(6) Do away with HMO's. They were created by the government, anyway (in a previous ill-fated attempt at "reforming" health care), and no one likes them. Plus, they reduce the ability of patients and doctors to determine appropriate treatment.
(7) This is probably the only one of my proposals that would increase government oversight into the private sector, which I hate, but if the goal is to bring down excessive demand for medical care it is an important component: Do away with comprehensive insurance (i.e. no deductible/copay). Allow insurance companies to adjust deductibles according to income level, but anyone who visits the doctor using private insurance has to pay something. This will make costs more visible to the consumer, and reduce the incentive to go to the doctor for frivolous stuff, like a paper cut.
(8) Here is my big one: Stop direct government payouts of medical benefits through Medicare/Medicaid. Use a portion of the savings from the reduction in costs of direct payouts and bureaucracy to provide Medicare/Medicaid recipients with monthly reimbursements for premiums to purchase private health insurance. The same rule applies regarding deductibles and copay as above, so that everyone but the most destitute will have to pay something for a doctor visit.
Again, these suggestions are just that -- they are certainly open for discussion and revision. And there are still some issues that these points still don't entirely address. However, I hope that they will underscore the point that we need to seek solutions that will address the underlying problems with health care, and not just blindly follow the "more government" mantra of the Left.
(Thanks to my friend, Dr. Michael Mikota, who allowed me to bounce some of these ideas off of him and provided some really good feedback!)
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