THE HEALTHCARE CRISIS A Crisis of Artificial Scarcity By Kevin A. Carson
Introduction. “Grocery insurance” is a popular analogy among free market advocates, for explaining why third party payments eliminate price competition and contribute to medical inflation: when your insurer only requires a small deductible for each trip to the supermarket, you'll probably buy a lot more T-bones.
Unfortunately, what we have now is a system where the government, Big Pharma, the license cartels, and bureaucratic high-overhead hospitals act in collusion to criminalize hamburger and make sure that only T-bones are available, and the uninsured wind up bankrupting themselves to eat. A lot of uninsured people would probably like access to less than premium service that they could actually afford.
And despite rising deductibles and copays—exactly the kind of incentives the libertarian “grocery insurance” critics would regard as ideal for encouraging frugality—low-cost alternatives are simply unavailable in many cases.
A central problem of all the healthcare reform proposals circulating in Congress is that they focus almost entirely on finance—giving the uninsured the wherewithal to buy insurance and otherwise increasing insurance coverage to pay for healthcare—without addressing the cost of healthcare itself. But if healthcare itself were cheap, much of the debate on finance and insurance would be moot.
Dr. Arnold Relman, in Tikkun, argued that the versions of health care reform currently proposed by “progressives” all primarily involve financing health care and expanding coverage to the uninsured rather than addressing the way current models of service delivery make it so expensive:
What are those inflationary forces? . . . [M]ost important among them are the incentives in the payment and organization of medical care that cause physicians, hospitals and other medical care facilities to focus at least as much on income and profit as on meeting the needs of patients. . . . The incentives in such a system reward and stimulate the delivery of more services. That is why medical expenditures in the U.S. are so much higher than in any other country, and are rising more rapidly. . . . Physicians, who supply the services, control most of the decisions to use medical resources. . . .
The economic incentives in the medical market are attracting the great majority of physicians into specialty practice, and these incentives, combined with the continued introduction of new and more expensive technology, are a major factor in causing inflation of medical expenditures. Physicians and ambulatory care and diagnostic facilities are largely paid on a piecework basis for each item of service provided.1
And as Reason's Jesse Walker points out, even the most “progressive” healthcare proposals, right up to and including single payer (or even direct government delivery of service, along the lines of the British National Health), leave the basic institutional culture of healthcare entirely untouched. A single-payer system, far from being radical,
would still accept the institutional premises of the present medical system. Consider the typical American health care transaction. On one side of the exchange you’ll have one of an artificially limited number of providers, many of them concentrated in those enormous, faceless institutions called hospitals. On the other side, making the purchase, is not a patient but one of those enormous, faceless institutions called insurers. The insurers, some of which are actual arms of the government and some of which merely owe their customers to the government’s tax incentives and shape their coverage to fit the government’s mandates, are
1 Arnold Relman, “Waiting for the Health Reform We Really Need,” Tikkun, September 24, 2009
expected to pay all or a share of even routine medical expenses. The result is higher costs, less competition, less transparency, and, in general, a system where the consumer gets about as much autonomy and respect as the stethoscope. Radical reform would restore power to the patient. Instead, the issue on the table is whether the behemoths we answer to will be purely public or public-private partnerships.2
The main reason healthcare is perceived as a crisis today, as opposed to forty years ago, is the escalation of costs for actual delivery of service. The main driver behind rising insurance premiums is not the misbehavior of the insurance industry itself, but the rising cost of healthcare. Any finance reform that fails to address this will be a temporary fix at best.
read the rest of this insightful article HERE
No comments:
Post a Comment