Free Radical Thought on Health Care

17 Aug

free radical thought

The government run insurance option will enjoy the benefit of not having to operate like a real business. Like all government programs it will be able to supplement its continued operation through tax payer subsidies. This will put private insurers at a disadvantage and will eventually put them out of business.

Any federally run insurance option will likely run a mild deficit at first, but this early drain will be nothing when compared to the massive costs that will result when private insurers are no longer able to operate. At that point there will be 300+ million people under the government insurance program and it will not be able to sustain quality coverage. The costs will simply be too high, like they are for European nations and Canada, which will result in cost savings measures. These cost saving measures will include rationing of health care services, because government programs never cut the superfluous jobs of union protected bureaucrats.

Once cost savings measures are required there will be increasing push to standardize universal care in order to reduce costs. This is dangerous in medicine, because health care is highly personal and runs contrary to cold impersonal touch of government run bureaucracy. With private insurers driven out of business, there will be no alternative to those who are victimized by the new system. Without the US, where will victims of Canada’s health care system go to as a last resort?

Quality of health care will decline, because the high cost of going to medical school will not be worthwhile if the doctor turns out to be no better than a civil servant. This system will all but guarantee that the only individuals who can afford to be doctors in the US are those who were educated in developing nations. There are talented doctors from overseas, but it is naive to think there wont be a noticeable differences. This has been demonstrated in the UK where they increasingly rely on foreign doctors and nurses to provide health care services for their population. Obama’s plan to subsidize education costs is a horrible response to this situation, because it does nothing to reduce the actual cost of an education. It simply redistributes the burden of paying for that education. This doesn’t put pressure on schools to operate more efficiently and keep costs down. It’s no coincidence that as we’ve seen government backed grants and loans explode, so has the cost of a college education.

Compared to the US, the UK and Canada are rather healthy. This is due to their lifestyles, which differ greatly from ours. If the UK and Canada, with largely healthy and homogeneous populations, cannot successfully operate a nationalized health care system then it is certain that the US, with our rather unhealthy and heterogeneous population, cannot.

None of the above implies that the current insurance industry is functional. There is not enough competition in medicine and far too much overhead. There needs to be greater flexibility for insurance providers to operate in all states and significant pressure on the broader insurance industry to stop using government regulation to undermine competition.

Health care reform is not complicated. A simple reintroduction of free market forces into the insurance industry is all that is required. Currently the insurance industry has utilized government regulation to protect their profits and undermine sources of competition. This has been a role that government has been far too comfortable playing for far too long. If legislators were interested in driving down health care costs, they would take a page from organizations like CATO and REASON. These groups would recommend returning insurance to its proper role as a protector against the costs of catastrophic care. By limiting insurance to this role, it would return consumers to their rightful position as the force that pressures health care providers to reduce costs and improve efficiency. In order to retain their customers, and their bottom lines, health care providers would be forced to become efficient, innovative and responsive. This would make routine medical care more affordable, which would increase access for more Americans.

The same forces could be used to accomplish the goals of reforming the insurance industry. By forcing insurance companies to compete with rivals in other states, the market for insurance would expand and efficient practices would gain broader adoption. With the adoption of efficient operation and reduction in the bureaucratic burden, health insurance would become more affordable and available to lower income Americans. A segment of the population would likely remain that would be unable to afford care and this could be addressed with vouchers that would allow the individual to shop for their own insurance, while not disrupting the market.

These reforms do not require the creation of a new government bureaucracy or regulatory agency. As a result, they will likely not be adopted. Legislators know that the way to gain support from influential unions is to expand their ranks by creating more bureaucrats. This can only be accomplished by establishing new government agencies that can employ workers via bloated administration structures. The most effective lobbyists these days are government agencies and those they employ. It’s little wonder that no federally operated government agency ever accomplishes the task it was created for and shrinks. At the most, they simply change their name periodically. The health care reforms Democrats have proposed are largely concerned with creating busy work rather than actually improving the health care system and expanding health insurance coverage. Real reform isn’t complicated, but it takes courage to do what’s in the interest of the American people rather than the insurance industry and unions.

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6 Responses to “Free Radical Thought on Health Care”

  1. Sailingbum August 17, 2009 at 3:04 PM #

    Great article.. I would add the capping of tort awards so malpractice insurance doesn’t bankrupt physicians.
    Or better yet, we could just incarcerate most of the lawyers and close down law schools for awhile!!

    • StickeeNotes August 17, 2009 at 3:28 PM #

      Excellent point. I completely forgot about the problem of medical liability insurance. Cato & Reason Magazine have suggested interesting solutions. They’ve proposed a system that would force the losing side to pay the legal fees of the opposing party. That way those who file frivolous lawsuits will be forced to pay the legal fees of those they wrongfully sued. This would still allow those who were genuinely wronged to seek appropriate compensation, while creating a strong disincentive for those who file junk lawsuits in the hopes of settling out of court. Malpractice insurers will finally have the financial motivation to fight frivolous claims rather than settling them out of court. I think it results in the best of both worlds because trial lawyers and those filing are held accountable as well as health care providers.

  2. Candice August 18, 2009 at 10:11 AM #

    You make some excellent points my friend. But unfortunately, none of them will ever come to be as we are heading toward this crappy co-op plan. Apparently co-ops are popular with the peace-love-unity Liberals and if you’re against co-ops, well Sir, you are against humanity and all things Utopian.

    In all seriousness, I believe the only way to truly fix health care is to avoid government intervention at all costs. You’d think more people would be able to see the correlation between Government business and failing business. As seen with “Cash for Clunkers.” The ONLY thing the government is good at is waste and inefficiency. (And of course, national defense)

    Good work. Now do a vlog. 🙂

  3. Sammy August 18, 2009 at 9:43 PM #

    All obama will do is outsource anyways. Just think about the all the lobbyists flocking to Washington DC because of obama’s reckless over-spending of $2 TRILLION in just 6 months, which alone is increasing the National Debt by 20%.

    Politicians take people’s money and reward the large corporations, in this case companies in the health care industry, since they have the money to more effectively lobby politicians. In the end smaller businesses will be hurt.

    Politicians will only reward companies that will be in their best political interest. Honestly, when can you really trust politicians since they are basically professional liars, and being president just means you are the best liar of the time. Why not just give the money directly from the people to the companies and take politicians in government out of the equation?

    obama is going to recklessly spend TRILLIONS of tax payers’ money just to give insurance to about 25% of those who do not have it. Over 50% of people’s income go towards taxes, just imagine how many more people will afford health care insurance if their income is almost doubled because of dramatic tax cuts.

    Competition is what is needed. It lowers prices of products and services, along with developing new innovations. All of which will benefit consumers. You need to remember that monopolistic tendencies can also apply to government.

    The reason why the cost of insurance is high is because politicians in government mandate insurance companies to increase their premiums to pay for ridiculous things. In addition, politicians put up regulations so that Americans are not allowed to get insurance from another state and use the coverage in their own state. This reduces competition making it more expensive for people to get insurance. On top of that medical professionals are not allowed to freely practice their profession in any US state without taking a long and tedious licensing process. This again increases the cost of medical insurance.

    In the end, the problem with most economic issues is too much government intervention of the economy by politicians, who will only tend to do things for political self interest. Just like how obama nationalized GM to pander to its unions. Politicians can barely run government, yet people think they can run a multi-national auto manufacturing company?

    The solution is SMALLER government, LESS spending, and LOWER taxes.

  4. Foxwood August 26, 2009 at 5:18 AM #

    Do you believe the Constitution is the rule of law? Do you believe in the original intent of our founding fathers? Do you want to reform Congress? If your answer is yes, we have to work together to make this happen.

    http://animal-farm.us/change/constitution-project-575

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  1. Democrats are Sick | Feed Your ADHD - December 10, 2009

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