Clueless
President Obama is determined to pass something that he calls healthcare reform and has talked incessantly about “bending the cost curve” down which is what pretentious snobs say when they mean “reduce costs”. This comment from last week’s summit reveals Obama as clueless about how to accomplish this simple goal:
“the equivalent of Acme Insurance that I had for my car. . . . It’s basically not health insurance. It’s house insurance. . . .
“I’m buying that to protect me from some catastrophic situation; otherwise, I’m just paying out of pocket. I don’t go to the doctor. I don’t get preventive care. There are a whole bunch of things I just do without. But if I get hit by a truck, maybe I don’t go bankrupt.”
And that lady’s and gentlemen is exactly why anything offered by President Obama will not reduce healthcare costs. President Obama, like so many others in this debate, confuses health insurance with health care. What the President and the Democrats have offered is health insurance reform which amounts to price controls on health care. And everyone knows what happens when you impose cost controls - you get shortages. That has been the experience of every country that has tried the same types of reforms that Obama is attempting. Why he would expect a different result here is a mystery.
The fact is that we have two problems that need solving not one. We have a health insurance problem and a health care problem. The health care problem is actually caused by the health insurance problem but solving the health insurance problem is merely a matter of returning insurance to its traditional role. If you do that the market will solve the health care problem. Health insurance is no longer insurance but is a form of prepaid healthcare which obscures the cost of healthcare to the consumer. As President Obama points out, if health insurance were returned to its traditional role, it would function more like home insurance. And that is exactly what it should do. We could then make sure everyone has true health insurance because true insurance would be simple and affordable for the entire population.
Once health insurance is returned to its traditional role as insurance, there are myriad possibilities for how to deliver health care. President Obama has praised the approach of the Mayo Clinic and rightly so but that model would reduce costs even more in a system where health insurance acted as insurance. In the current system, an insurance company is paid to provide insurance (in the traditional sense) and to pre-pay for health care services. When health care services are needed the insurance company then makes a determination as to whether it believes you need the service and if it does, negotiates with and pays the health care provider. The insurance company will ration services in a way that produces a profit. In a system where insurance was reduced to its traditional role, individuals would pay the insurance company for the catastrophic coverage and decide for themselves whether they needed the service and pay the healthcare provider directly. The profit of the insurance company is eliminated and costs are reduced. There is no reason to place the insurance company between the provider and the recipient. Unless, like President Obama, you think the public is too stupid to purchase their own healthcare.
That is what this debate is really all about. President Obama and the Democrats don’t believe you will take care of yourself unless they force you to. And if you don’t take care of yourself, their argument goes, the public will end up footing the bill because you will seek care through the emergency room or through some government program. That is certainly true for some portion of the population, but I don’t think it holds for the vast majority. Even if it does, there are other ways to address the issue. Mandatory catastrophic coverage - with government subsidies for the poor - coupled with health savings accounts (again, with subsidies for the poor) would address the problem. Singapore has a system along those lines that works well.
Why won’t Democrats embrace a system that achieves universal catastrophic coverage (which would prevent a health care problem from causing bankruptcy - one of their major talking points in favor of reform), provides a method to pay for health care while also reducing costs? Is it because they are beholden to the insurance companies? Or is it because they don’t trust the public to be competent about purchasing health care? Or is it because they just don’t understand the problem?
- March 3rd
