The Real Problem With Healthcare In America
I don’t think anybody who regularly reads TAH would disagree that the healthcare bills that have passed the House and Senate are complete monstrosities. Even many Democrats that have voted for and supported one of the bills agree that they are “far from perfect” but one must be passed for the sake of passing a bill with the word healthcare in it. I could take up the entire front page and spend most of St. Patrick’s day delving into the downright insane provisions in these bills, but I am not going to do that because I want to start drinking soon. Besides, they have already been well documented by other bloggers (especially by Michelle Malkin and by the writers at National Review) and I would just be repeating what they have already said.
One thing I would like to discuss however is what the real problem is with healthcare in America. The media and pretty much everybody in Washington are saying the problem with healthcare is access to healthcare (or the cost of access to healthcare insurance) but the real problem is the cost of healthcare itself. Immediately, some would say that they are the same thing, but they are not. What drives the level of access to healthcare is the cost of healthcare services, equipment, and the cost to pay healthcare professionals. The higher the cost is, the less access many Americans have to healthcare. The Democrats (and even many Republicans) have bought into the idea that what is primarily driving the cost of healthcare higher is the insurance industry’s insatiable drive for profits. However, the insurance industry has some of the lowest profit margins of any industry and the rise in premiums has matched the high levels of inflation in the cost of healthcare. This brings us to the fundamental issue with the healthcare reform bills being pushed today: THEY DON’T ADDRESS THE REAL PROBLEM. These bills address access and not cost. All they do is shift the burden of cost around.
So what can the government do to reduce the cost of healthcare? Well, its not so much of what it should do but what is shouldn’t be doing. Healthcare is one of the most heavily regulated industries in America, and it doesn’t take a genius to know that more regulation inevitably drives up cost. Everything from the cost of getting a drug approved by the FDA to the cost of getting a license to practice medicine drives up the price of healthcare. Look at the price of medical equipment for example. Why has the cost of technology that contain microprocessors (from computers to PDAs to even flat screen TVs) gone down significantly over the years while medical equipment that contains most of the same technology continued to go up? I don’t think the insurance companies are to blame for that one. Then there is the contentious issue of tort reform. The amount that has to be paid by healthcare providers to cover potential liabilities, while not significant for some larger providers, has driven many smaller providers of healthcare (i.e. doctors in small offices) out of certain medical fields or out of the profession completely. This increases demand on fewer providers, and BOOM basic economics 101 you have higher prices. I could go on, but I think you can get the picture.
Unfortunately, I don’t expect Washington to reverse course and address the real problem. It is much easier for Congress to blame the health insurance industry for the rising cost of healthcare than to look in the mirror and see who is really raising the cost of healthcare in America.
Category: Politics
OD,
I’d offer that the REAL problem we have is that Congress, or at least the leftists there, seem to believe that health care is a right. It is most certainly not a right. Health care is a commodity, no different than an automobile, a house, a flat screen TV or a case of beer.
Think of it this way: Doctors, Nurses, Lab Techs, Pharmacists, all go into business to make a living. If you nationalize it and say that access to those skills is a RIGHT, and entitlement, then where does it stop?
Why not nationalize auto repairmen, or electricians, or plumbers? I can guarantee you (because I have spoken to both) that my plumber takes home as much (or more) as my GP Doctor. My doctor is very skilled, and a joy to work with, but my doctor also has to pay huge premiums for liability and malpractice insurance, plus pay for staff, the overhead of the office space, medical transcription service, payroll service, and, BTW, gets stuck with a pittance in payment for Medicare and Medicaid patients, where the government determines what she will get paid, and when. Oh, also, she has to pay the Worker’s Comp fees and the matching SSI payments for her employees, too.
My plumber gets $60/hour, and $90/hour weekends and after 5pm. He has a truck payment and his insurance. He gets paid cash upon delivery.
Do you think he would do work to the same standard as he does, and as quickly as he does, if the government were to tell him how much he would get paid, and when? He makes a good living because he has competition in a free market. He can charge, and get, a higher fee because of the quality of his work, and his promptness in completing it.
If this health care monstrosity gets passed into law, then we all might as well get used to the idea of health care being provided by the lowest bidder, with the efficiency of the Department of Motor Vehicles.
AW1 Tim,
I definitely agree with you that it is a problem we are starting to view things like healthcare, education, and even access to the internet as “rights.” You have a right pursue all those things, but not a right to them.
My problem is even you think that healthcare is a right, why not address the core problem of why people don’t have healthcare? Its just pure lunacy to simply shift the burden of cost around.
Insurance does play a big part in driving costs up but it’s more the fact that too many people have it rather than not enough. And the people who do have insurance have too much of it! We’ve built up this culture that promotes insurance in so many things that we do. When we get insurance, we’re told we should be covered for every possible risk, from the smallest injury to the greatest calamity. When people are insured for most everything within a certain industry, competition becomes moot. People don’t really shop around for doctors. Cost isn’t an issue anymore and suddenly people are using other factors like proximity to determine who their primary caregiver will be. Without consumers making decisions based on price, health care costs can incrementally rise without consequence. Not that I mean to discount everything government has done to dramatically raise health care costs. Anyone interested in the history of health care costs in the U.S. should check out this essay: http://www.westandfirm.org/docs/Gorman-01.pdf. It’s does a good job detailing the negative effects of government intervention into health care and explains a couple of experiments that show how the issue of costs should really be addressed.
If only one thing, any one thing, could be used to improve both healthcare and the cost of it; would have to be to get the Lawyers out of Healthcare. Outrageous settlement amounts have driven malpractice insurance up, hence higher doctors rates, and round and round and up and up. Yes, patients need to be able to use a bad move by a doctor to take him to task, but totally uncalled for settlements only bite those of us who expect to pay either for doctor visits, etc, or for our insurance. It is TDML! Too Damned Many lawyers!
Nuf Sed
The Left looks at health care primarily as a form of income redistribution. In their ideal world they’d like to just take from the rich and give to the poor in straight cash. But they know large welfare payments look bad and aren’t politically popular.
So they use entitlements as an indirect way of accomplishing the same goal. They can’t just give people $10k in cash, so they give them $10k in health insurance.
They honestly believe everyone is owed a middle class lifestyle just as a basic human right and part of being an American. They realize they can’t do it with cash transfers, so they are trying with Obamacare and similar programs.
The whole structure/concept of health insurance needs to be reworked. Imagine how much your car insurance would cost if it covered oil changes, worn out tires and blown a/c pumps; or how much home insurance would cost if it covered paint, new carpet and dead appliances. Yet we want to pay a (relatively) small monthly premium and then only have to pay a $10 co-pay for everything from a flu shot to open-heart surgery. It wasn’t all that long ago that ‘advanced’ diagnostics weren’t much more than a few blood tests and an X-ray. Now we expect to get an MRI every time we stub our toe. Most folks are completely oblivious to the financial wrangling that goes on regarding pretty much every claim that every gets submitted. The system is pretty much as convuluted as the tax code. I’ve been seeing a string of doctors for several months regarding some back and hip problems and still have no idea what is or isn’t really being covered and whether or not I’m going end up with a bill in the end. As screwed up as the system may be, getting the gubmint any more involved than it already is complete and utter insanity.
OD, I was saying pretty much the same thing to a lady at the office today: cheap insurance does nothing to “lower the cost of healthcare”… I was “lucky” enough to black out or something at the office the Monday before Christmas. They called 911 and I was taken to the ER. Now, let me also say I’m underemployed (I sub with 2 school districts and have the temp/contract office job for those days I’m not in a classroom); as such, none of my employment provides me with health insurance. I was not denied care because of my lack of insurance coverage. So far, I’ve received bills from 6 different entities (city for the EMS/ambulance; whoever did the lab work on the blood draws, etc.; the doctor who read the x-ray, CT scan & MRI; the admitting doctor; the exam in the ER; the EKG analysis) amounting to nearly $3000. Still haven’t received the bill from the hospital itself for the overnight stay and the tests. If they decide I don’t qualify for a discount, that will be $16040. I’m not asking anyone else to pay for it. I can’t pay it all now, but I’m paying what I can right now. I earn too much to qualify for Medicaid (not that I want the government – or really the American taxpayer – the pay for me to go to the doctor), but I don’t make enough (right now – hope that changes come the start of next school year) to by insurance on my own. I’m one of those uninsured people this bill is supposed to “help”, and I DON’T WANT IT! I’ll take my lumps for the position that I’m in because of choices I made (going back to school to get my teaching certification, then not being able to get that first teaching job like I thought I’d be able to). I get help from my parents (hey, it’s not “cool” to live with them, but I don’t have to worry about rent/utilities/etc.), but that’s what family is for right? Also, while I don’t have links to… Read more »
Well, other than left/liberal retards wanting to control everything in order to fill a missing void in their souls,…
The WHO by my research put the US 37th for health care and it is not because of access or quality of care for which we would be number 1!! That little number is because of the *distribution* of health care in the US. And in that vein, they compare completely different systems and population numbers. We have the largest population to serve in comparison to all the countries we are pitted against. And the only true private system. Let’s see we deliver care to 300 million people and the closest countries to us are Britain or Germany at 60 and 80 million.
That being said, You are spot on, OD. Why hasn’t the cost of the technology in health care decreased? Of course it is because of regulation and government intrusion.
I currently have an individual policy. And contrary to all the media and even the President would have you believe, it is not hard to get a decent policy. We pay 500 per month for a family of 6, they cover all but the co=pays and the first 500 in scripts. Each person has a 25 million dollar limit. Normally they are 2 or 5 million.
For those claiming no access or the expense, my bs meter is at the top. If it’s a priority people will buy it. If not, well, I suppose they can continue to spend 160/month on a pack a day, or that 100 on the Starbucks…and still get a manicure once a week at the cost of a 100 per month…wait, how about that blackberry, and cable???
Apparently, I have more to add… What drives developments in technology, medicine, or research? Capitalism? YES!! Primarily, U.S. capitalism. Without our capitalistic market, the risk for investing in these items would be too high (i.e. not enough potential profit to incur the risk associated with the investment of the needed capital). In essence, the world’s investors make choices with their capital. If the potential profit is not in medicine they will shift their investment capital elsewhere, say food, energy, construction, transportation, etc. If the profit motive is taken out of the medical sector, due to its socialization by the government, the ability to make a profit in the medical sector will be determined by the government. Even if the government decided to leave in a profit margin equal to that currently in place, future profit margins would respond to government forces as opposed to free market forces. Frankly, as OD said the profit margins for the industry are only 2-6% of revenues. Hell, cell phone company profits are 5-8% higher than that!! This factor alone would increase the risk of capital investment in the medical sector. In fact, investors would demand higher initial profit margins to make the same investment that they make today because of this added government risk. What happens? Prices would essentially go up even more. If government reduced the profit in the medical sector through caps and payment regulation, the risk to investors would also go up. Again, what happens? In this case, the investors would leave the sector and move their capital to another more profitable one. The result would be reduced innovation in medical technology, vaccines and drugs. Furthermore, the intellectual capital held by physicians, scientists, etc. would choose sectors more profitable than that offered in the medical one. It is even more possible that this intellectual capital would move to another more favorable country. (Are there any? I mean, Europe is in the shitter and we could be next!) My BIL spent 14 years to become a neurosurgeon. He already gives away much of his services because the government does not reimburse him… Read more »
We really want ALL healthcare to be like the VA? (Not just no, but Hell no!)