With the debate over health care reform raging across America, we've been subjected to a wide range of view points on the subject.
I personally believe that the federal government needs to stay out of the insurance business. Government has terrible track records for every agency it has ever set up...save for the military. Key examples of government's ineptitude include social security, medicare, medicaid, Fannie Mae, Freddie Mac and the postal service.
Given the misuse of the health care portion of this list by certain politicians wishing to stay in power, I believe that those in the Washington power circle don't want health care reform so it can benefit us. I believe it's a political ploy to ensure certain figures can hold onto power for many years to come. Evidence of this can be seen every election cycle when certain candidates are accused by their opponents of wanting to take social security away from senior citizens.
That all being said, let's look at the health care system that we have today. Is there anything wrong with it? It doesn't take but a brief look around the globe to realize that America has one of the best health systems in the country. Our doctors and hospitals are some of the best the world has to offer. So, the health system can't be the problem.
However, the biggest complaint people have about their doctors visits and hospital stays is the cost. I remember when I was a child, and the annual physical for school sports would cost about $25 for the visit. Today, that's just the co-pay. My wife has gone through three surgical procedures to fix damage on her right hand caused in an automobile accident last summer. I've been amazed at the prices charged for what should have been simple tasks.
So, we have the best health care, but some really bad prices. Some folks might argue that you get what you pay for. However, I don't think the price associated with the care is justified. Something else has gone wrong to bring the system to a costly point. And, that leads us to the last remaining major player in the health care system -- insurance.
Now, I'm not anti-insurance, but I do think we must place the blame for the cost increases in our health care system on the insurance industry. But, to understand the increases, we must understand what led to them, and the economics involved. The following illustration is a bit simplistic, but it will make the point.
In a system where health insurance is used only for catastrophic situations, such as a severe accident, heart attack, cancer, etc., the patient foots the entire bill for regular office visits and basic surgical procedures. This process leads to price competition, because the patient will intentionally shop around for better prices. In many cases, patients can negotiate or barter medical costs. Price competition in a capitalist market always lowers costs.
How does this work? It's the same concept that you find using cash over credit or debit cards. As you see your own money going out to pay for services, you will do what you can to curb costs, and that will lead you to pick your physicians more wisely. Insurance acts as the plastic card in that you don't actually see your money changing hands. The impact on your bank account is delayed. Hence, our love of insurance.
By spreading health insurance to cover all medical expenses, we have pushed off the cost of it to other hands. Corporations have taken control of what used to be the consumer's responsibility -- shopping for medical care. This has led to HMOs, PPOs and the like, which has in turn reduced the consumer options by limiting the doctors available under the chosen plans.
Tack onto that, the insurers have also walloped the doctors by charging extremely high rates for their malpractice insurance. This has forced medical offices to charge more to cover those expenses.
The end result is a never-ending cycle of increasing expenses on the consumer and physician end.
Whether someone or some corporation is getting rich off this system is irrelevant. The politicians would like to paint this as some big, evil company or doctors group as the bad guy. But, they are wrong in this portrait of the health care system. Every person and company has a right and a duty to earn a profit in the capitalist economic system.
The problem is that the system is broken in the way that it is set up. No government program will ever fix that. If anything, a government program will only intensify the problem by imposing bureaucratic red tape, great inefficiencies and extremely high taxes.
The only way to fix the health care problem is by resetting the system. We must return to a consumer-oriented system where the patient makes all the decisions regarding their medical care, including paying for those decisions out of their own pocket.
Sadly, no one is talking about the reset option.
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