Real Health Care Reform
October 5, 2009
By Humphrey Stevenson
Those of us who are against Obama style health care "reform" are portrayed as only being against it because of Obama, wishing only to deny him a political victory. We have been characterized as heartless and cruel and have even been called racist for our views. Mainly we are thought to have no ideas of our own; that we have no solutions for the problems that do exist in our health care industry.
One huge problem in our health care industry is frivolous lawsuits. Doctors pay thousands of dollars each year for malpractice insurance. They also order many unnecessary tests just to cover the bases in case they get sued. Therefore, we need tort reform. According to the Wall Street Journal, since Mississippi instituted its tort reform legislation, the number of medical malpractice lawsuits has fallen by ninety percent and malpractice insurance premiums are down thirty to forty-five percent.
There is something the Federal government can do to help. They are empowered by the commerce clause to regulate interstate commerce. They should remove all barriers so that health insurance companies can sell health insurance across state lines. This would increase competition in the health insurance market increasing quality and consumer choice and bringing the cost of policies down.
Many young people do not wish to pay premiums for a health insurance policy. They have other priorities and I would never be in favor of forcing anyone to buy something they do not want, but they need to understand the risk they are taking. If they are willing to accept the risk, so be it. But if they get seriously ill or injured, they must be made to pay for the health services they use.
This is one of the most important real reforms we could introduce to the health care industry; putting the consumer in charge of paying for health care services. Most people eat in restaurants and when they have finished their meals they expect a bill to be presented and they pay it. They don't expect the bill to be sent to their "meal insurance company." The Federal government has not introduced "DinerCare." Although with this bunch you never know, so don't give them any ideas.
Why has the concept of paying for the services you use been lost when it comes to health care? When confronted with the idea of the patient directly paying for their health care services, people seem to be afraid that if they are hurt or sick they will have to haggle a price with a doctor or run from doctor to doctor shopping for the best price. But when market forces are introduced, you won't have to do this; the market will do it for you. How do I know this; because it already does.
Let's look at an everyday example of the market functioning in this way. My wife calls me at work and says, "Honey, on your way home, please pick up a loaf of bread and a quart of milk." Now, am I going to drive all over town looking for the absolute best price on these items? No, I'm going to stop at the grocery store I pass on my way home. Will I get the absolute lowest price on these items? No, probably not, there may be a store or two that charge a few pennies less. But the real question is: will I be charged a reasonable and fair price? Most likely, yes. Why? Because every grocer in town knows the price range they must be in (in economic terms, the floor price and the ceiling price) to sell their goods (i.e. compete) in that market. In other words, the market sets the price.
When the health care consumer is directly paying for services, the health care market will function very similarly. A doctor will not be able to charge any price they want, because they are not the only doctor in the market. He is competing with the doctor down the hall, the doctor across the street, the doctor two blocks up the street, the doctor three blocks down the street and so on. As it is now, the doctor is not really competing. He knows what the government or an insurance company will pay for a given procedure and that is what he charges theses institutions.
We in the United States are blessed with the greatest health care industry in the world. What problems there are not going to be solved by a government takeover. That will only destroy the best of the industry. The only thing that will solve the problems in the health care industry is the same thing that has given us the highest standard of living in the history of the world; the free market.