Universal Health Care is Bad for You
Wednesday, October 22nd, 2008 By Marc KilmerMichael Cannon at the Cato Institute has a great article in National Review Online about why the universal coverage supported by many liberals may have some very bad consequences for your health:
Federal bureaucrats have announced that, as of this month, the Medicare program will no longer provide financial rewards to doctors and hospitals who harm patients.
That is not a typo. For more than 40 years, Medicare has provided financial rewards to providers when a patient requires follow-up care following a medical error.
Medicare is America’s experiment with universal coverage. Operated by the federal government, it provides health insurance to more than 40 million elderly and disabled Americans.
When Congress created Medicare in 1965, physicians feared the new program would reduce their incomes and autonomy. To reduce physician opposition, Congress adopted the dominant way of paying physicians at the time, known as “fee-for-service” payment. As the name suggests, when a physician provides a service, he collects a fee. Provide another service, collect another fee — ad nauseam. Physicians like fee-for-service payment, and have lobbied to preserve it. …
When a patient requires follow-up care to repair the damage done by a medical error, how does Medicare respond? It pays providers for the “care” that injured the patient, and then pays them again to repair the damage. Imagine paying your contractor more because he knocked down the wrong wall. …
After 40 years of rewarding providers who harm patients, Medicare will now force providers to bear some of the cost of their own mistakes. Yet Medicare will still reward hospitals for many medical errors, including infections and medication errors, and will continue rewarding physicians for even more types of error.
It doesn’t have to be this way. More than 60 years ago, markets devised health plans that discourage medical errors by forcing doctors and hospitals to bear the financial costs of all such errors. You know them as plans like Group Health Cooperative and Kaiser Permanente. Doctors and patients who choose those plans tend to like them, and the plans receive high marks for quality, which suggests the financial incentives they use serve patients better.
Why does it take Medicare more than 40 years to take such baby steps? Especially when the market developed a solution to this problem over 60 years ago?
The answer is that Medicare — like all universal-coverage schemes — is operated by the government, and government resists innovation. In this case, resistance to innovation kills.
Tags: Health care, Medicare
