Forget Top-Down Overhaul of Health Care, How About the Government Just Gets Out of the Way?
In the midst of all the talk about a top-down overhaul and reworking of the health-care industry, supposedly to fix the failures of the private sector, two new studies show that the private sector could do a better job of reform if government would just get out of the way. Time Magazine features two Rand Corporation reports on the rise of a new phenomenon, retail health clinics, and the impact that price awareness and competition have on the market. The studies focused on my state, Minnesota, which prides itself on health-care public policy – but private-sector care wins out.
Instead of hiding behind insurance co-pays, the clinics offer pricing up front to consumers, so that they can decide for themselves what to “buy” and how much they want to pay for service. This is the same mechanism that works to keep prices down and supply consistent in other areas of health care that insurance plans do not traditionally cover. For instance, cosmetic surgery and Lasik rely entirely on consumer compensation. There are no third-party payers to get in the way of rationally allocating resources to demand. In those markets, producers and consumers find each other in the normal manner, advertising, discounts, and price competition, and the market attracts new providers when scarcity appears and prices rise.
If we want to reform care, bend the cost curve downward, and promote supply in the health-care industry, we need to learn the lesson from retail health clinics. The top-down reform proposed by Congress threatens to stop real reform and amplify everything that's currently wrong with the system.
~Edward Morrisey
Thanks to Wright Truesdell
19 Comments:
Fantastic Article! I live in Tennessee and we had previously tried to modify health insurance with TENNcare. It was a disaster. Costs surged as new people went on TENNcare. Unfortunately, there was no connection between the price people paid and the service they used. I have a friend that worked at a walk-in clinic part of the time and the hospital part of the time (they were across the street from each other). When he had emergency room duty, he was amazed at the number of people who came to the emergency room for services that they could receive at a much lower cost across the street. Under TENNcare, the cost to the patient was the same regardless of where they went. As a result, Tennessee saw a 16% increase in emergency room care when TENNcare was implemented.
The first step toward people paying attention to health care prices is a large deductible on health insurance. I have a $2300 deductible with my insurance and an HSA. You better believe I ask how much things cost and I ask myself if I am really sick enough to go to the doctor knowing what it will cost me.
I saw a single payer proponent on CNBC maybe 2 weeks ago. When the host asked him what he thought about allowing insurers to compete across state lines, he said it wouldn't really change premiums.
Why? He said because NY as an example mandates certain "protections for consumers" in health insurance plans that aren't required in other states. By protections he meant required coverage in the plans.
The host didn't challenge him at all on that of course. Either for the "protections" being wanted or needed, or for the belief that premiums wouldn't be lower just because of mandated coverage.
Again car insurance is a great example. Companies have to meet minimums, but there is huge variation in premiums.
So why don't the Democrats understand that their plan is about government control, not improvement? All they do is rail against the citizens. Somebody whack them with a 2x4.
"So why don't the Democrats understand that their plan is about government control, not improvement?"
I am as sure as I can be that they do understand that and understand it very well.
That is their goal, in its entirety.
It is the RINOs, "Moderates", and compromisers that don't understand that.
How refreshing to see people using gold old common sense to figure out the healthcare problem. We need less government, not more. We need to trust the private sector to figure this out. There's no way that government bureaucrats can be as smart as the hundreds of millions of people in a free market.
How About the Government Just Gets Out of the Way?
That's about when business finds a way to legitimately put the screws to a consumer.
...is a large deductible on health insurance. I have a $2300 deductible with my insurance and an HSA
Only good if you're on the correct side of the deductible, and on a consistent basis. Otherwise, it is a few short steps from a disaster.
Make what other plans that already exist work, not add a "public option", HSA, or "medical 'tourism'".
Anonymous said @2:48PM...
Just as the Republicans are about restoring the "company town" style of business control, and not in a good way.
We need to trust the private sector to figure this out
The problem with that they're more likely to do the proverbial "water damage vs wind damage" trickery.
Health care is not just another good or service. If you have an emergency you don't have time to shop. Even the young can not avoid the truck that may hit them.
The issue is confounding routine care with catastrophes. Insurance does not work well for routine care its for catastrophes. The problem with health care is that early treatment can often prevent catastrophes.
Perhaps moving to a system similar to the long discredited whole life model where you buy insurance at 25 and pay the same rate for life with and as long as you pay premiums you keep the insurance would work. One could even sell the right to buy insurance as a product as life companies have done
Right now the sick and the injured can go to any of a number if Emergency rooms, Urgent Care Centers, and so forth and get care.
That will probably be true until the New Plan goes into effect, when a lot of them will be closed.
Tough out here in rural Amaerica.
"That's about when business finds a way to legitimately put the screws to a consumer"...
Well sethstorm you of course have something credible and substantial to back up that statement, right?
"Just as the Republicans are about restoring the "company town" style of business control, and not in a good way."...
Oh dear!
Here you go sethstorm, help stop the invasion of the H1B invaders...
How About the Government Just Gets Out of the Way?
That's about when business finds a way to legitimately put the screws to a consumer.
What you seek to evade is the fact that in a free market economy, no private business has the power to legally use force against anyone.
In a free market, the only power a private business has is the power to offer a value in exchange for another value. It can offer a wage in exchange for a person's labor -- and it can offer a service or product in exchange for a customer's money. But all such exchanges are fully voluntary, with no business having the power to force anyone to accept or participate in either exchange. It has no power to "put the screws" to anyone.
Government is the entity with a monopoly on the legal use of force. Government and government alone can "put the screws" to you.
And yes, once laissez-faire is abandoned, once we have a highly regulated "mixed economy" such as we have now, wherein vast regulation gives government a stranglehold on virtually all economic activity in the country, businesses do lobby for favorable legislation, usually to squash or damage their competitors -- and yes, the consumers get screwed by this. The obvious solution to this is to abolish the government's power to regulate the economy. But statists like yourself seek only to further expand government's power over our lives, so obviously, the screwing of the consumer is not your concern.
I’d guess that what fundamentally motivates you is the desire for the unearned -- and government force is the only way you can get it.
Of course if you really want the gov out of the way remove licensing requirements for medical professional, make it like the 1800's where all you had to do to practice medicine was to hang out a shingle. Gov regulates in this area also. I wonder how far the get gov off our backs group are willing to go 1900, 1850 ...
Or is it ok for regulations we like and not ok for those we don't like.
"'...is a large deductible on health insurance. I have a $2300 deductible with my insurance and an HSA'
Only good if you're on the correct side of the deductible, and on a consistent basis. Otherwise, it is a few short steps from a disaster. "
Funny thing is that since I am spending my own money, I have consistently been on the correct side of the deductible. I had one year where I had a biopsy in January and spent the year on the wrong side of the deductible. You are correct that I didn't care as much about prices at that point. Another way of saying this is that is five years, I only had one year where I spent money like people who have regular insurance. This is still a net reduction in health care costs.
Your comment that "otherwise it is a few short steps from disaster" is completely wrong. That is what a high deductible insurance policy is for - to avoid the disaster. I can handle the smaller stuff. I want insurance that can handle the disasters. That is what I have with a high deductible insurance policy.
Ever been to a psychic?
They suck you in. Bad things will happen unless....you give me more money
Ever been to a doctor?
Do this or you may get sick and die.
UNDUE INFLUENCE
Medical providers are not bad people, but how can they not be influenced by their own pocketbook?
And it is so easy to scare a patient into having expensive and radical treatments.
Medicine is a field where the government definitely should have a large regulatory role.
Anonymous said...
"...I wonder how far the get gov off our backs group are willing to go 1900, 1850 ...
Or is it ok for regulations we like and not ok for those we don't like."
When government doesn't set the standards, private groups have stepped in.
The insurers would, without a doubt, set the standards for the doctors they would reimburse for.
But let's ignore that. Licensing is completely different than controlling the money, deciding on reimbursable treatments for each disease, and forcing people into a program. That's not just "requlation".
Lawyers are licensed as well. What if the government decided that everyone had to sign up for "legal insurance" or be fined? Not for criminal defense, but in case your dog bit the neighbor, you wanted to file for divorce, draft a rental contract, interpret your home loan documents for you, explain what a ballot measure means, etc. What if they decided that the government plan would only pay a certain amount for a divorce, or a certain amount to defend a civil suit about a dog bite? Would you say, well they're licensing lawyers, so let's just go that extra step?
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We had (my wife and I) had an interesting discussion a few minutes ago--she just returned from the dentist where she had learned several things--that she had cavities that need to be repaired (she doesn't get many), that the acids in her never-distant soft-drinks probably contribute, and that a bridge she has been considering for a tooth she lost to and abcess a while back is not necessary and shoiuld be considered only if the gap disturbs her.
Her reaction: she'll spend the $1500 on a new computer.
I deleted a comment because the number of typos was alarming, even for me. Here is the replacement.
Never been to a psychic. Or to a doctor as described.
But then, except for company-mandated-and-paid-for physicals, I have never been to a doctor I didn't select. (There have been a few I did not return-to after deciding I didn't like him or her or the way they treated me (as a person). I see doctors associated with a teaching hospital, and they have sent me to specialists who did not behave with as much respect they give to Oscar (the skeleton in the corner)).
And I certainly don't take every thing they say without question.
But the usual conversation centers on what ever I was complaining about and what _I_ should do about it with a bit of what they can do to help.
As near as I can tell, their interest (I see 5 or 6 over the course of a half-year) is in keeping me as a customer over the long haul, not sucking me dry like a politician does with the intention of discarding me when my usefulness is gone.
In mentally reviewing the last year or so, I will have to say that the usual debates about future care items involves them telling me I don't need one thing or another that I have read about.
no private business has the power to legally use force against anyone
...directly.
Now when the ability to choose is reduced to an academic possibility, then you have force. All you have to do is divide and marginalize the people subject to those choices. No government is needed; it is just a matter of making/keeping the opportunity(as well as monetary) cost as close to infinite as possible.
The problem with pre-existing conditions is that you can't exactly "move away" from them much like one can with disaster-related insurance.
It would be more honest to consider splitting the insurance side from the healthcare side. That is, don't unbundle the two, just have them work off of different risk/benefit models.
Briefly as possible, to respond to thoughts here, I prefer and use the 1000s of yrs. old healthcare, not the 1850s A.D. type, although likely preferable to many modern drugs promoted now. I'd choose HSAs & a high deductable for Catastrophic Care insurance as others have here. Forced coverage as in NY, MA aside from not allowing intelligent choice increases costs as the comparison to auto ins. makes clear. An Anon. makes good pts. re licensing,separate from regulating & Seth suggested again splitting ins. from care as HSA w/ hi deductible did.
My suggestions would be to use the Yellow Emperor's Traditional Chinese or Oriental Medicine, current in 3 colleges in CA, at the least and incorporated in Chinese schools for preventive care, herbs, some even grown by you also to save. You may find you do not even need to put out money for healthcare insurance, except for Catastrophic if you learn even as much as I have through our "treasure" Dr. Hulda Clark to add to your toolkit of learning and pass all of this on to our future generations. BTW, an ugly, disgraceful, intemperate site slams this naturopathic research scientist, a day after her death with insults, crude, ill-inspired manners ...and lies much as O. gave us, and I can refute every one of them with experience, as does the video on that same site! With distinguished people in their fields. The hatchet men have reprehensible reputations by dint of the medical edifice sending out people with already bad reps to savage Clark, such as Barrett, b/c their reps were already ruined by themselves &/or others. Much of the med. edifice should soon come toppling down.
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