The Best Health Care Article Written This Year
Wednesday, August 26th, 2009 By Marc KilmerThis month’s Atlantic has an excellent article about the problems facing our health care system. The author’s suggestions on how to fix our system are far better than anything currently being discussed in DC or at town halls. If you read this article and truly understand it, you’ll be better informed on health care than probably 95% of your fellow Americans.
Some excerpts:
I’m a Democrat, and have long been concerned about America’s lack of a health safety net. But based on my own work experience, I also believe that unless we fix the problems at the foundation of our health system—largely problems of incentives—our reforms won’t do much good, and may do harm. To achieve maximum coverage at acceptable cost with acceptable quality, health care will need to become subject to the same forces that have boosted efficiency and value throughout the economy. We will need to reduce, rather than expand, the role of insurance; focus the government’s role exclusively on things that only government can do (protect the poor, cover us against true catastrophe, enforce safety standards, and ensure provider competition); overcome our addiction to Ponzi-scheme financing, hidden subsidies, manipulated prices, and undisclosed results; and rely more on ourselves, the consumers, as the ultimate guarantors of good service, reasonable prices, and sensible trade-offs between health-care spending and spending on all the other good things money can buy.
And:
The average insured American and the average uninsured American spend very similar amounts of their own money on health care each year—$654 and $583, respectively. But they spend wildly different amounts of other people’s money—$3,809 and $1,103, respectively. Sometimes the uninsured do not get highly beneficial treatments because they cannot afford them at today’s prices—something any reform must address. But likewise, insured patients often get only marginally beneficial (or even outright unnecessary) care at mind-boggling cost. If it’s true that the insurance system leads us to focus on only our direct share of costs—rather than the total cost to society—it’s not surprising that insured families and uninsured ones would make similar decisions as to how much of their own money to spend on care, but very different decisions on the total amount to consume.
And:
Health care is an exceptionally heavily regulated industry. Health-insurance companies are regulated by states, which limits interstate competition. And many of the materials, machines, and even software programs used by health-care facilities must be licensed by state or federal authorities, or approved for use by Medicare; these requirements form large barriers to entry for both new facilities and new vendors that could equip and supply them.
Tags: Health care
August 27th, 2009 at 8:30 pm
This is a great article. It points out that medical decisions are made between doctor and patient, neither of whom are directly paying.
Hypothetically, a patient who has a slight chance of having a disease that can be detected by an expensive test will always choose the test, since most or all of the money will be paid by insurance.
As the author points out, insurance money comes from all of us, and nowhere else, because there is nowhere else.
It is a classic case of the “trajedy of the commons.” http://en.wikipedia.org/wiki/Tragedy_of_the_commons (a dilemma in which multiple individuals acting independently in their own self-interest can ultimately destroy a shared limited resource even when it is clear that it is not in anyone’s long term interest for this to happen).
As the author points out, the current drive for reform does not address this. I still support the reforms because of the easy ride from employed and insured to unemployed and bankrupt.
However, as the author points out, eventually we are all going to have to face the music (financial and otherwise).