Completely Unrelated Healthcare Rant

I was visiting a family member in a long-term care facility. Another family member and a couple of friends stopped by about the time some of the staff came in to do some cleanup, so all four visitors ended up in the hall. Since illness was the reason for our being there together at that time, it’s not surprising that the topic of healthcare came up.

One of the friends is a lady three or four years older than I am (I was a year ahead of Moses in school). She comes from a family of life-long Democrats. They are old school rather than leftists, so I found it a little strange that she started in with the socialized medicine talking points. “We’re the only country in the world that doesn’t have healthcare,” she said. Then she went on to tell about a friend of hers from Canada (let me guess – Toronto) who loved the system in the Great White North.

Don’t get me wrong. Canada’s a great country, especially the West. Those folks can come and join us and we’ll give Los Angeles and San Francisco to the Canadians – along with Maine, Minneapolis or Madison -- a couple of leftist strongholds to go with Toronto and Quebec. Still, the truth is that Canada’s entire GDP is about equivalent to that of Texas . I’m not up on my Canadian demographics so I don’t know how age distributions and racial components might impact our neighbor’s healthcare costs. My point is that even if someone proved to me that socialized medicine worked in Canada, I would not necessarily take that as being applicable to the U.S.A. Beyond that, many claim that it does not work as well as our system does.

Here’s an experiment for you. Go down to the emergency room of your local hospital and start looking for signs on the wall. There’s close to a 100% chance you will see a notice in both English and Spanish stating that no one in need of emergency or acute treatment will be turned away, even if they are unable to pay.

So, in this great country, who is denied healthcare? No one. Can’t happen.

People imply that it happens by saying, as my friend did, that there are 100 million people without health insurance. I think her number was off. The highest I heard is around 40 or 45 million. My guess is that if that is true it’s a rolling number. There aren’t 40 million people chronically uninsured, but that it averages around that. But even so, if you are sick, you can get treatment, as I pointed out above. If you are a little more responsible, you can pay out of pocket at those little urgent care clinics. I think those are great.

What I wanted to tell her was that there are people in this country sitting on their fat behinds, watching Oprah on their big screen TV while eating Krispy Kremes and drinking Starbucks with their iPods in their pockets on their damn cell phones complaining to their drug dealers that they can’t afford health insurance.

I know a little about government and healthcare. One of my less glamorous jobs was compiling hospital survey information for a state agency and providing data to what was called the State Health Planning and Development Agency. I would guess that most states have something similar. You see, that’s the problem with the healthcare system. The government is already involved and has been in a big way since the 1960’s and the advent of Medicare. Healthcare is not a free market system but a partially planned economy. The answer to rising healthcare costs and insurance premiums is not a socialized, single-payer system but capitalism.

Like big private insurers, Medicare and Medicaid have negotiated payment schedules. Providers that jump through the governments hoops – adding to their costs – get the government’s rate for procedures. There is no benefit to cost control since rates are usually based on costs. The government tries to control it by regulating providers – especially hospitals -- with regard to expansions of their facilities. The more government gets involved, the worse the system gets. At this point it’s locked in an upward price spiral that is hampering the economy in general as employers are dumping millions into the rat-hole of employee health insurance that could go for expansion and more productive investment. This is one reason why we now consider full employment a couple of points lower than we did back in the ‘70’s. Too much money is being drained off by healthcare.

Employers, and government in some cases, are trying to remedy this by attacking from the demand side. The positive part of this approach includes wellness programs. The negative part is an increased encroachment on personal freedom by anti-smoking, anti-fat nazis in both the public and private sectors.

A better approach is to divorce healthcare from both the government and private employers. My employer has never offered to pay any part of my auto or homeowners insurance premiums. Why should health insurance be different? Because of a historical fluke with wage-and-price controls after WWII, we have gotten locked into a mindset of health insurance being part of a job’s benefits package.

I’m not sure we can do away with Medicaid or Medicare in the short-term. The way to start revitalizing healthcare is to start in the private sector. Do away with group plans. Let everyone purchase their health insurance individually. I can hear the screams now. What about people with pre-existing conditions? Won’t insurance companies reject them? Some will, no doubt. In a free market, however, somebody will try to tap into that money pool. Bad drivers still get liability insurance and bad credit risks still get loans. It will come at a higher premium but there is a way to mitigate that as well by offering policies that cover catastrophic costs with high deductibles.

Personally, with no health problems at all (if you don’t count bifocals, creaky joints, and hearing damaged by derringers and dirt bikes), I would jump at a low-cost insurance policy with a $5000 or even $10,000 deductible, something that would protect my assets if I got hit by a truck and couldn’t tell them not to take me to the hospital.

Paying out of pocket to cover high deductibles will result in market forces that counter ever-increasing charges for procedures. The consumer of healthcare will become price-sensitive and lower cost providers will spring up to offer alternatives.

Will you get equality of care? No. The guy working behind the counter at the convenience store will not get the same healthcare as Ted Kennedy or Warren Buffet. We don’t expect working class folks to drive the same cars or live in the same houses as those with higher incomes, why do we expect them to have the same healthcare?

I know: blasphemy. Still, no-frills healthcare doesn’t mean bad healthcare any more than driving a Corolla mean you have a bad car. The answer is not to make healthcare an arm of the government but to give individuals more freedom and increased responsibility for their own health. If you make bad decisions with your health it should have consequences, just like making bad decisions with your money, your family, or any other aspect of life. Your fellow citizens should not be forced at gunpoint to hand over their earnings to pay for your care.

I’d better quite for now before I get myself in trouble.