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Health care is not a "right."  Health care is a collection of products and services, offered for sale by a diverse group of individuals, partnerships, and corporations. Healthcare is no more a right than food. In fact, both healthcare and food fall into the category of “necessities.” But necessities are not rights. These two categories are dealt with very differently by our federal government. As an example, necessities like food are often subsidized in programs like Food Stamps.
On the other hand, if you deal with the inability of some individuals to afford a necessity like food by capping the prices that the providers of food can charge (government price controls), the providers of food will eventually cease to produce it, or will be forced to produce it at much lower quality. This has two dramatic unintended consequences. First, the ensuing shortage of food, or diminishment in the quality of food, will punish everyone in society. Second, the producers of food who have been forced to quit will have to either find work in another industry, if available at all to someone of their training and experience, or will end up on welfare, themselves needing to utilize Food Stamps.
The same is true of healthcare. If the government arbitrarily caps the prices that the providers of healthcare can charge for their products and services, there will be the same consequences. First, some providers (such as doctors, pharmaceutical companies, nurses, hospitals, orderlies, etc.) will cease to produce healthcare. Further, since healthcare pricing, and therefore the earning potential for a healthcare provider, is held arbitrarily and artificially low, many students will choose to train for other professions and many investors will choose to invest in other industries. Second, lower pricing will force many healthcare providers to lower the quality of the healthcare they provide in order to make it financially viable. Thus, there will be shortages of healthcare, and a diminution of the quality of healthcare available to all. Everyone will suffer.
Further, and equally troubling in the long term, placing artificial and arbitrary price controls on healthcare will have a chilling effect on innovation, particularly discovery and development. Currently, therapies (drugs and devices) are, by and large, discovered and developed by companies which are backed by either public or private investors, or by the profits they generate selling other therapies (government backed academic research represents only a small fraction of the cost of development). If the return available to those investors is capped by new government regulation and price controls, many of those investors will cease to invest in the discovery and development of the next generation of therapies. This guarantees the continued pain and suffering for generations to come for people with diseases for which there currently are no therapies, or insufficient therapies.
Happen to know anyone who suffers with Alzheimer’s? Parkinson’s? Huntington’s? Traumatic brain injury or paralysis? I would like to be present when you describe to that person that we will be severely slashing the investments in developing treatments or cures for those diseases or conditions.
So any solution for healthcare reform in this country, in order to preserve the market for and investment in healthcare, must not rely upon price controls imposed and implemented by government. The current administration’s “One Other Option” public insurance plan, which the administration pledges would simply be an option for those who cannot afford insurance, could represent such a plan. That is, if you believe that One Other Option, Inc., would:
- abide by that promise and not reimburse healthcare providers at a rate lower than the market rate; and,
- not require healthcare providers to accept those lower reimbursement rates as payment in full for the patient’s healthcare.
Our experience with Medicare/Medicaid in this country leads me to believe that will not be the case. Our government has a terrible record operating as an insurance provider. Think of Social Security and Medicare/Medicaid as relevant examples. Both were well meaning, seemingly well thought-out solutions to then current problems when they were established. Both are either now or soon to be unmitigated financial disasters that will make today’s problems seem miniscule in comparison. Adding One Other Option, Inc., to the mix, as logical as it seems today, is not a sustainable long term solution.
Instead, a better solution would be to provide “Healthcare Stamps,” conceptually very similar to Food Stamps, to those who cannot afford healthcare. This would allow those individuals and families with Healthcare Stamps to go into the market and purchase healthcare and healthcare insurance alongside all other individuals and families. And in just the same way that someone paying for food with a Food Stamp cannot demand a deep discount on that food, someone with Healthcare Stamps should not be able to demand a discount from healthcare providers. This would have the incredibly important effect of preserving the market for healthcare and the incentive to invest in healthcare providers and developers.
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On a more technical note, doesn't something need to be done to enhance health insurance competition and consumer cost consciousness? E.g. interstate insurance deregulation, and more large employers or pools doing what Safeway is doing?