Like most folks, I agree that our health care system in this country is dysfunctional and needs serious treatment. I agree with those who say that we need to uncouple medical insurance from employers and employee benefits, for a lot of reasons; that linkage was a 1940s expedient that has done more, I think, to distort both the cost of health care and the functioning of our medical system than anything else. I think if we recognize and accept this, a real bipartisan reform is possible on that basis, providing that the Democratic Party is willing to stand up to the unions on that point.
Where I part company with the current administration is its analysis of where we go from here. To my way of thinking, the great functional problem with our health care system is that it’s an anticompetitive mess. The majority of us don’t choose our medical insurance; instead, they get what comes with their situation (in most cases, their current or former job). We sort of choose our doctors, but from a limited list preselected by our (unchosen) insurer, and based on a far more limited set of data than we might use to choose, let’s say, a new washing machine or coffeemaker. (Side note: the Cuisinart DCC-2000 carafeless coffeemaker is wonderful if you don’t mind the electrical system dying every year or so; they’re very good about replacing it free of charge when it does.) And when we need to go to the hospital, we don’t do a price comparison, we go where they send us.
Indeed, we can’t do a price comparison, because hospitals don’t make that information available; as my wife rightly insists, requiring hospitals to be transparent about their rates and tell you in advance what they charge for everything is an essential element in any meaningful health care reform. Without that information, it’s impossible for the market economy to function, because it’s impossible for people in need of healthcare to make economically-informed decisions; there is only the upward pressure on costs produced by the desire for more and better and more elaborate services (because after all, there’s just a chance that this or that test might tell us something we don’t already know) with no countervailing downward pressure on costs produced by the desire to save money (because after all, those tests are horrendously expensive and not worth the cost when they’re not really necessary). If we want to bring costs down while preserving the quality of our health care system, what we need to do is open up the system to market forces, not close it still further by making it a part of our highly-inefficient government apparatus.
Deroy Murdock argued this case well last week on the National Review website.
Rather than endorse such big-government overkill, pro-freedom members of Congress should promote a simple concept: Let every American own and control an individual health-insurance policy that can be transported among jobs, self-employment, graduate school, and life’s other twists and turns. . . .
There is no need for a gargantuan health plan that spends $1.5 trillion—as the Congressional Budget Office estimates House Democrats want—nor for the 29 new federal boards, panels, and agencies that Senate Democrats envision. As for creating a “government option” for health insurance, why not create a government option for grocery stores and clothing shops, lest famine and nudity erupt across the land?
What Americans need is a thriving market in individually owned and controlled health-insurance plans. When you book an airline flight, PriceLine.com does not ask, “What is your group number?” You decide when and where to fly, and then buy your ticket. At least with personal travel, your boss does not fund this. The same is true for car insurance, home insurance, and often life insurance. Why must Americans shop for health insurance at work, rather than online or through independent agents?
Health-care reform should give Americans the option of using money tax-free to purchase whatever kinds of health insurance make them happy. If employers offer such plans, lovely. If not, individuals should be encouraged, through tax-free Health Savings Accounts, to buy their own policies and maintain them throughout their careers. This dramatically would reduce the tragedy of “job lock,” whereby employees put up with bosses and duties they cannot stand, merely to keep employer-furnished health coverage.
As Rep. John Shadegg (R., Ariz.) has argued, Americans also should be free to buy health plans across state lines. Today, such policies usually must be purchased within consumers’ own respective states, subject to state-level insurance regulations. If New York residents may arrange home loans through Illinois-based banks, for example, why are we only allowed to buy health plans through insurers who operate in the Empire State?
Creating a massive government bureaucracy to control health care will only be good news for bureaucrats; for all that this is couched in the language of “making health care a right,” the actual result will be the opposite. After all, as Peter Singer has already said (I won’t say “admitted,” because he doesn’t view it as an admission), the inevitable result of government funding of healthcare will be government control of your health care decisions, and government rationing of healthcare. If government money is necessary for you to live, then the government will make the decision whether you live or die—and the government cares more about your money than it does about you.
This is inevitably what happens when the government takes something over. Robert Wenzel sums it up well in his comment on Dr. Singer’s piece:
The big problem with Singer’s argument is that he makes the mistake of assuming a fixed pool of healthcare services. This is a world where the evidence shows that in a free market economy, innovations are a daily occurrence. Cell phones, big screen televisions and personal computers get better and cheaper. Expensive new products that only the rich can afford are in many ways simply inferior “test” products before they get to the masses in better quality and much cheaper. Would you rather have the current cheaper jumbo screen televisions, cell phones and personal computers or the much more expensive clunkier jumbo TV, cell phones and PCs of yesteryear that only the rich could afford?
By rationed healthcare, and limited bureaucratic controlled access to “expensive” healthcare, new innovations, creativity and advancements in the healthcare industry will be greatly reduced, perhaps eliminated. The incentives will be gone. Remember, there are never any stats on what innovations, discoveries and advancements will have never been created. Those who argue that medical care works in national health care countries fail to understand the innovations that are killed off. This is, of course, in addition, to the usual problems of rationing and bureaucratic distortion of prices—and the government taking the role of decider on whether you deserve to walk or not, or whether you calculate out for life or death.
Rather than moving our medical system toward the world dominated by Moore’s Law (that drives innovation rather than suppressing it), Obamacare would move it into the world of government procurement that gave us the fabled thousand-dollar hammer, and the world of government financial management that has put us trillions of dollars in debt. Given that government has consistently proven itself poor at running anything efficiently and under budget, there’s no justification for the claim that the government can improve our health care system by taking it over (especially when there’s plenty of evidence to the contrary from other countries that have tried it).
Government-run health care systems are no more functional than the one we have now—economically or morally; if anything, they’re less so, especially as they inevitably lead in the end to the government putting a dollar value on people’s lives according to how much they’re worth to the state. If we truly want to make things better (as opposed to transferring large amounts of our personal freedom and autonomy to yet another unaccountable bureaucracy), we need to turn away from this approach and toward the one Murdock lays out, one which has already been shown to work. We need to break the health care bureaucracy that already exists, rather than multiplying it, and give people the information and autonomy they need to make their own decisions with their own money. We need to let the market drive efficiency, as it already does in so many other parts of life. We need to set health care free.
Managing a health care for over 300 million people is a very tangly task. Why not let the states themselves to decide how it should be done? Why does the health care have to be centralized?
Julie
I agree. I do think there needs to be greater flexibility and portability, which means medical insurance needs to be less balkanized–but there are much better ways of doing that than trying to run the whole thing from DC.