The Healthcare Issue Simplified

DownsizeDC has a post entitled Complexity, Simplified that promises to make our national issue with health care reform understandable. And they deliver on that promise. They say more than this, but it all boils down to these few statements:

But we think the complexity can be simplified to two simple questions:

    • For whom does your doctor work?
    • Do you pay for your health insurance directly?

If your doctor tailors his or her care to the policies of your insurance company, or some government program, then you don’t really have a doctor who works for you, and health care hasn’t really been reformed.

You’ll know health care has really been reformed when the following things are true…

    • You and your doctor deal with your health insurance provider as rarely as you currently do with your car insurance company
    • Doctors post their prices, and compete with each other based on price and quality

It’s really that simple. As long as insurance policies and/or government programs fund most of your health care, doctors will work for them and not for you.

The same holds true for health insurance. As long as our health care coverage comes mostly from employer controlled insurance or the government, we won’t have a competitive health insurance market, and the cost of both insurance and health care will grow constantly.

When Americans care about the impact that their use of health care has on their insurance premiums in the same way that they care about the impact that speeding tickets and minor scrapes have on their car insurance, you’ll know that our health care system has really been reformed.

There – in two questions to ask, two systemic changes to watch for, and two paragraphs decribing what real reform would look like – is the entire health care issue.

4 comments for “The Healthcare Issue Simplified

  1. June 19, 2009 at 10:36 am

    Succinct and cogent.

    But detractors argue that some health issues are so complex and/or emergent that individuals simply can’t make informed decisions about them. They ask How useful pricing information is when a loved one collapses and needs immediate medical care or when your daughter breaks her arm. How do you deal with the diagnosis of a rare cancer? The average person, they say, is unqualified to decide which services to buy in such instances.

    They also claim that market based systems incentivize people to avoid useful preventative care and result in higher priced interventions later on. They are oblivious to the fact that it is our middleman system that does this currently.

    The detractors always raise the specter of the poor and suggest that the poor would fare, well, poorly under a market based system. However, I have never gotten a single statist to give me any answer at all as to why helping “the poor” requires forcing everyone into a massive government health care bureaucracy.

    Detractors will also say that health insurance is not directly analogous to car insurance. If your insurance company doesn’t adequately cover automobile issues, you can replace your car. But you can’t replace your body if your insurance company inadequately covers health issues.

    It really comes down to the issues of freedom and control. There are those that want more power and control over others. Many individuals don’t want the responsibility that accompanies individual liberty on this matter.

    • June 19, 2009 at 11:05 am

      Detractors would be right that some issues are that complex so that individuals can’t make informed decisions – that’s why we have doctors. I’ve never met an accountant or lawyer who knew as much about medicine as a doctor, but they are the ones who largely make the decisions about what care the insurance companies cover and when.

      In case anyone is not paying attention, the poor aren’t faring very well in the current system. I’m sure it would help them to have the prices go down in a system where health care providers and insurance providers found it necessary to more openly compete with other health care and insurance entities than they do now – where everyone competes but only within a very narrow, and artificially constrained space making for not much competition.

      It really does come down to freedom and control. For those who do not want the responsibility of making their own choices I am sure that there will be insurance companies and HMO’s who are still more than happy to sell those services as part of insurance plans – with appropriate premiums. The trick is that those who do want to take responsibility for their own care should not be constrained by government theorists regarding what they are able to decide for themselves.

  2. June 19, 2009 at 12:21 pm

    Nice blog. I just linked to you on Salt Lake Sites.

    The observation that the entity that pays is the entity that receives the attention is quite poignant.

    Comparing health insurance to car insurance doesn’t quite work out. Making a claim against car insurance can be as much a nightmare as dealing with claims for medical insurance.

    I’ve been pushing the idea of adding a loan component to Medical Savings Accounts, making it a Medical Savings and Loan. In addition to the medical savings account, people would pay a premium to access a guaranteed interest free medical loan. (For medical loans, people pay the premium on the front end of the loan, rather than on the back end of the loan. People would default on loans if they do not recover from the medical condition.)

    Since most people would be paying back their loans, the MSL would revive the negotiation between doctor and patient.

    • June 19, 2009 at 12:38 pm

      I don’t see how the fact that auto insurance claims can be as painful as medical insurance claims shakes the comparison between medical and auto insurance – especially considering that the point of the comparison was that people are more careful in how they maintain and use their cars in order to avoid making claims and paying higher premiums than they are regarding their health and health insurance.

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