Or Keep the government out of my Medicare
The current health care system works nothing like a free market system. Enormous barriers to market entry and competition permeate a heavily-regulated system. Tax schemes skew consumption and resource allocation; government backed guilds control the supply of providers. We have heavy regulation and control of medical devices and medications; government-funded research is patented for private profit and patent laws function as price supports. The government says who can treat me, how they can treat me, what I can and can't put into my body and from whom I may make purchases of what I put in my body.
To be sure, I am not arguing for a free, unregulated and open market system in medicine, but frankly, much of the noise from conservatives about keeping government out of medicine is bullshit. Some conservatives understand this, but many are doing nothing more than defending the existing system of complex regulation because they feel well-served by it, either as consumers or as financial stakeholders.
The hell with people who get screwed over by the current system. They're just collateral damage.
For many opponents of health care reform, Canadians on a waiting list are a social and medical catastrophe, but millions of Americans who can't afford health insurance don't matter because the majority of Americans have either private or government-provided coverage. The hypocrisy reeks.
I suppose if one's definition of conservatism is pigheaded defense of the status quo, then defending the existing heavily-regulated medical industry is conservative. But let's not confuse pigheaded defense of the status quo with conservatism that questions the wisdom of government intervention in the marketplace. The defenders of the status quo are not defending free markets, free choice or individual responsibility. They're defending their own stakes in a government regulated system.
The most reasonable opposition to the current health care reform proposals comes from critics who understand that American medicine is already under government control, albeit through a byzantine hodgepodge of regulation rather than any comprehensive government blueprint.
All of the actors in health care—from doctors to insurers to pharmaceutical companies—work in a heavily regulated, massively subsidized industry full of structural distortions. They all want to serve patients well. But they also all behave rationally in response to the economic incentives those distortions create. Accidentally, but relentlessly, America has built a health-care system with incentives that inexorably generate terrible and perverse results. Incentives that emphasize health care over any other aspect of health and well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity, and discourage transparent competition based on price or quality. That result in a generational pyramid scheme rather than sustainable financing. And that—most important—remove consumers from our irreplaceable role as the ultimate ensurer of value. These are the impersonal forces, I’ve come to believe, that explain why things have gone so badly wrong in health care, producing the national dilemma of runaway costs and poorly covered millions.
But fundamentally, the "comprehensive" reform being contemplated merely cements in place the current system--insurance-based, employment-centered, administratively complex. It addresses the underlying causes of our health-care crisis only obliquely, if at all; indeed, by extending the current system to more people, it will likely increase the ultimate cost of true reform.
for every two doctors in the U.S., there is now one health-insurance employee--more than 470,000 in total. In 2006, it cost almost $500 per person just to administer health insurance. Much of this enormous cost would simply disappear if we paid routine and predictable health-care expenditures the way we pay for everything else--by ourselves.
Cato contributor and economist Arnold Kling agrees. Kling believes that we can provide universal coverage and substantially reduce costs, but not by implementing incremental changes to a system that is rife with systemic distortions that drive the cost of medicine higher.
Back in 2007, libertarian-conservative Kling thought that liberal economist Brad DeLong's cocktail napkin proposals for health care reform weren't so bad:
20% Deductible/Out of Pocket Cap: The IRS snarfs 20% of your family economic income. 5% of it is an increase in taxes (but that replaces your and your employer's current health insurance premiums). 15% of it goes straight into your Health Savings Account. That HSA is then used to pay all your family health bills. If your expenses in a year are less than what's in your HSA, the balance is rolled into your IRA (or, if you prefer, returned to you with your tax refund check).
Single-Payer for the Rest: If your HSA is emptied and you still have more health bills that year, the federal government pays them. The main point, after all, is insurance: if you fall seriously sick, you want right then and there to be treated whether or not your wallet biopsy is positive.
Sin Taxes: on Tobacco, Gorgonzola, Three-Liter Bottles of Liquid High-Fructose Corn Syrup, Tanning Clinics (Melanoma), et cetera: Sin taxes (and, perhaps, someday general revenues) pay for an army of barefoot doctors and nurses and mobile treatment vans roaming the country, knocking on doors, and providing preventive and other long-run lifestyle services for free...
A Lot of Serious Research on Best Public-Health, Chronic-Disease, and Hospital Practices
Kling doesn't buy the entire package, but neither do I. I'm not sure about the sin taxes because these are generally regressive, falling disproportionately on the poor. And the serious research part is a bit of a Pandora's box, but I don't reject it out-of-hand. But these concerns are minor compared with the problems addressed by the basic financial side of DeLong's proposal.
At the front end, premiums (HSA contributions) are income adjusted. And because consumers aren't insulated from the economic consequences of medical decisions, they are more likely to consider the cost of extra tests, more casual doctor's office visits and ER visits for routine medical problems. Competitive pricing pressures on more routine services are also more likely under this scheme. And because insurers only pick up mid-level costs, price of health insurance falls dramatically. Insurers have less concern about long-term, catastrophic health issues and less incentive to ice out consumers over health risks in the far off future.
These are just a few quick thoughts. When a health care reform proposal seems reasonable both to a conservative economist and a liberal/progressive economist, I'm thinking they might be on to something. As for the current reform proposal, I favor a public insurance option if a truly affordable option for those who can't afford insurance is included. (Actually, we already have a public health care option: the emergency room and bankruptcy. We can do better than that.)
I'm far less confident that the government can do anything to substantially reduce the overall cost of medicine as long as the existing incentives for consumers and stakeholders remain fundamentally unchanged. Whether current reform proposals are adopted or not, I expect that in 10 years we will have a system that is even more expensive, but still not delivering results that are fundamentally better than countries that are delivering health care for one-half to three-quarters the cost of our current government regulated system.