Health care crisis? What crisis?
Topics: Health
13 Feb 1992
From:
Let me make another stab at a completely different topic. I'm spurred
to this by a recent Reason issue dedicated to health care and parade
of supposed experts on MacNeil/Lehrer this week.
I do not think there is any crisis in health care. The same absolute
amount of health care has not risen in cost. The only problem is that
people expect to have infinite health care and the cost of that is
without limit and we are just now realizing that fact as technology continues
to exceed all cost bounds.
I have a lot more to say, but I'll start with this.
An outline of the rest of this letter:
1) Infant mortality & efficiency
2) Incentive
3) vested interest
4) My proposal
a) Incentive
b) Drugs
c) Tort
d) Licenses
1) I'm going to puke on the next person who says that our health care
system is inefficient because it is the most expensive and has the
highest infant mortality rate in the Western world (of whatever the
factoid of the moment happens to be). Infant mortality has nothing to
do with efficiency. Our health care system (the private part anyway) is
actually quite efficient in the sense of being economically productive.
The proper measure of efficiency is not the number of lives saved but
the number of lives saved times the value of each of those lives. The
value of a life, as best we can measure it, is what society is willing
to pay someone for the productivity they have to offer, i.e. higher
salary. Higher salaried persons pay more for health care and save their
greater productivity longer. Yes, poor people are allowed to die, but
that is not inefficient. It might be immoral, but that is a different
argument.
2) The current system fails to leave people with the natural incentive
they should have. Corporations but not individuals get deductions for
health insurance. Corporations cannot discriminate based on pre-existing
conditions. Therefore everyone gets dumped in the same pool. Insurance
companies wanting to charge smokers (or whoever) more is a good thing.
It discourages destructive behavior proportional to its cost. But no...
What are the proposals we are hearing in the current debate? Everyone,
even Bush, has some method in mind to prevent insurance companies from
'discriminating'. How we ever got in the absurd situation of not allowing
insurance companies to cover only specific illnesses is another story.
The result is that people with one illness who have lost their insurance
cannot buy insurance to cover other possible illnesses.
3) All of the 'experts' we hear from are doctors. Well, they are experts
on medicine, but the problem is they are rendering political judgements
about how much health care the country needs and they are not any more an
expert on that subject than I am. I don't find it all surprising that
doctors, who stand to profit under many of the proposed schemes, are
in favor of a national health policy.
4) So what do I propose to do?
a) First, put the incentive back in the system. Let insurance companies
exclude people and/or specific illnesses. Give individuals and companies
the same tax breaks on health insurance so that individuals will be
more inclined to buy their own insurance and therefore have to pay more
attention to cost not only of insurance but of health care practices
as insurance companies charge proportional to one's foolishness
(not only with regards to smoking but appropriate use of insurance
in the past).
Don't require hospitals to treat the indigent. Hospitals are not rich
fat cats that deserve to be perversely taxed. Forcing other patients
to bear the cost of the indigent is grossly distorting of proper incentive
for everyone. Either have the government pay the cost for the poor or
not. In either case, don't force hospitals to disproportionally bear
the cost. If I own a grocery store, is it my job to feed the poor? No.
If I'm a carpenter, is it my job to build housing for the poor? No.
b) Next, legalize drugs, I mean all drugs. Currently pharmaceutical
companies indirectly bribe doctors to prescribe their brand thus
locking consumers out of the generic market. Even worse, doctors
are inclined to prescribe drugs which are not even the most appropriate
because they are being 'promo'ed. I propose to let consumers have the
choice at the drug counter of which drug is most cost effective and to
let them solicit external advice (which is currently illegal to do).
Also, one of the current 'crises' in the system is overloaded ERs.
There are two reasons for this. One is that the ER is the only place
indigent people can get many forms of care, including non-emergency
situations (addressed above). The second problem is that most indigent
emergency care is given for intrustion wounds due to turf battles for
drugs, estimates run upward of 50%. Notice I didn't say we have a
shortage of ERs, merely a shortage of paying customers to keep
sufficient numbers open. Anyway, we all know the litany of ERs shutting
down because they cannot shoulder all of the freebies thus denying all
of us who can pay a valuable service. By legalizing drugs almost all of
the turf battle violence would be eliminated.
c) The problem with the tort system is that people are not allowed
to sign contracts accepting risk. This is partially codified in law
which says medical products and drugs must be 'safe and effective'.
'Save' has come to mean absolutely safe. Nothing is absolutely safe;
so, companies have to lie to sell anything, even reasonably safe
products. Patients sue when anything goes wrong even though they knew
they were taking a chance in the first place. I propose simply that
people be allowed to take any risk they want (so long as the company
does not make a false contract by misrepresenting the risk) by explicitly
agreeing to a given procedure. I think this will go a long way towards
solving the liability crisis and the added expense of defensive testing
(patients will have incentive to avoid unnecessary tests because of
point (a) and doctors will not feel obligated to insist on them).
d) Licenses. Finally, and perhaps most radically, repeal the law requiring
a license to practice medicine. The AMA controls the supply of doctors
and the government protects their monopoly. Blow it away. There are
plenty of health problems I can solve by consulting a pharmacist or a
nurse for things slightly more serious. For those of you are so worried
about the plight of the poor, my proposal will make health care affordable
for them again. Furthermore, with the protected monopoly removed it will
no longer do the AMA any good to restrict entry to the field and more people
can be become qualified doctors thus actually improving the health care
situation for reasonably intelligent people.
In conclusion, most current proposals try to fix the health care 'problem'
by more regulation to fix previous misguided regulations. That will only
aggravate the problem, we should instead have more freedom in all aspects
of purchasing medical care.
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