The Atlantic has a thoughtful article by David Goldhill on health care and health insurance reform. It is long, but I think well worth reading. I've also included below a few paragraphs that I thought were particularly interesting.
http://www.theatlantic.com/doc/print/200909/health-care .... | 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. .... | But health insurance is different from every other type of | insurance. Health insurance is the primary payment mechanism not | just for expenses that are unexpected and large, but for nearly all | health-care expenses. We’ve become so used to health insurance that | we don’t realize how absurd that is. We can’t imagine paying for | gas with our auto-insurance policy, or for our electric bills with our | homeowners insurance, but we all assume that our regular checkups and | dental cleanings will be covered at least partially by insurance. Most | pregnancies are planned, and deliveries are predictable many months in | advance, yet they’re financed the same way we finance fixing a car | after a wreck—through an insurance claim. .... | Every time you walk into a doctor’s office, it’s implicit that | someone else will be paying most or all of your bill; for most of | us, that means we give less attention to prices for medical services | than we do to prices for anything else. Most physicians, meanwhile, | benefit financially from ordering diagnostic tests, doing procedures, | and scheduling follow-up appointments. Combine these two features of | the system with a third—the informational advantage that extensive | training has given physicians over their patients, and the authority | that advantage confers—and you have a system where physicians can, | to some extent, generate demand at will. | Do they? Well, Medicare spends almost twice as much per patient in | Dallas, where there are more doctors and care facilities per resident, | as it does in Salem, Oregon, where supply is tighter. Why? Because | doctors (particularly specialists) in surplus areas order more tests | and treatments per capita, and keep their practices busy. Many studies | have shown that the patients in areas like Dallas do not benefit in | any measurable way from all this extra care. All of the physicians I | know are genuinely dedicated to their patients. But at the margin, | all of us are at least subconsciously influenced by our own economic | interests. The data are clear: in our current system, physician supply | often begets patient demand. .... | Perhaps the greatest problem posed by our health-insurance-driven | regime is the sense it creates that someone else is actually paying | for most of our health care—and that the costs of new benefits can | also be borne by someone else. Unfortunately, there is no one else. | For fun, let’s imagine confiscating all the profits of all the | famously greedy health-insurance companies. That would pay for four | days of health care for all Americans. Let’s add in the profits of | the 10 biggest rapacious U.S. drug companies. Another 7 days. Indeed, | confiscating all the profits of all American companies, in every | industry, wouldn’t cover even five months of our health-care | expenses. .... | Cost control is a feature of decentralized, competitive markets, | not of centralized bureaucracy—a matter of incentives, not | mandates. What’s more, cost control is dynamic. Even the simplest | business faces constant variation in its costs for labor, facilities, | and capital; to compete, management must react quickly, efficiently, | and, most often, prospectively. By contrast, government bureaucracies | set regulations and reimbursement rates through carefully evaluated | and broadly applied rules. These bureaucracies first must notice | market changes and resource misallocations, and then (sometimes | subject to political considerations) issue additional regulations or | change reimbursement rates to address each problem retrospectively. .... | From 2000 to 2005, per capita health-care spending in Canada grew by | 33 percent, in France by 37 percent, in the U.K. by 47 percent—all | comparable to the 40 percent growth experienced by the U.S. in that | period. Cost control by way of bureaucratic price controls has its | limits. .... | How would we pay for most of our health care? The same way we pay for | everything else—out of our income and savings. Medicare itself is, | in a sense, a form of forced savings, as is commercial insurance. In | place of these programs and the premiums we now contribute to them, | and along with catastrophic insurance, the government should create | a new form of health savings account—a vehicle that has existed, | though in imperfect form, since 2003. Every American should be | required to maintain an HSA, and contribute a minimum percentage | of post-tax income, subject to a floor and a cap in total dollar | contributions. The income percentage required should rise over a | working life, as wages and wealth typically do. ... | Anyone with whom I discuss this approach has the same question: How | am I supposed to be able to afford health care in this system? Well, | what if I gave you $1.77 million? Recall, that’s how much an | insured 22-year-old at my company could expect to pay—and to have | paid on his and his family’s behalf—over his lifetime, assuming | health-care costs are tamed. Sure, most of that money doesn’t | pass through your hands now. It’s hidden in company payments for | premiums, or in Medicare taxes and premiums. But think about it: If | you had access to those funds over your lifetime, wouldn’t you be | able to afford your own care? And wouldn’t you consume health care | differently if you and your family didn’t have to spend that money | only on care? .... | All of the health-care interest groups—hospitals, insurance | companies, professional groups, pharmaceuticals, device manufacturers, | even advocates for the poor—have a major stake in the current | system. Overturning it would favor only the 300 million of us who use | the system and—whether we realize it or not—pay for it. Until we | start asking the type of questions my father’s death inspired me | to ask, until we demand the same price and quality accountability in | health care that we demand in everything else, each new health-care | reform will cost us more and serve us less. _______________________________________________ http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com
