Healthcare Reform

Posted: June 21, 2009 in Politics
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So Obama is going to try to tackle healthcare reform?  Good luck with that!  I don’t believe there is a challenge that is more daunting than trying to fix the healthcare system.  So many cogs in this machine, all trying to protect their best interests.  It’s hard to envision where to even start.

I have always imagined a healthcare system, in a very generic sense, that has two distinct tiers.  One tier would be comprise of healthcare for emergency services and expensive, critical procedures.  This tier would be covered by some form of insurance, whether it is provided by the private sector or the government (or both).  The other tier would be comprise of heathcare for non-emergency routine services and optional procedures.  Consumers would generally be expected to pay out of pocket for these services and procedures.

My rational for this type of system is that I believe this would allow free market forces to work where it is reasonable that they could work, while coverage would be provided where it is not reasonable that free market forces could work.  I am a pretty big believer of the free market system, but I am not one of these people who believe that the free market will ALWAYS works in a knee-jerk fashion.  When the market is allowed to have price competition, the free market works great.  Unfortunately when you are having a heart attack, you are not exactly in a position to price comparison shop.  The phrase “Location, location, location” is never more true than in that situation!  So really, the conditions necessary for the free market to work are not present.  In those situations I think you have to consider other options.

The flip side of that coin is that there are many procedures and testing that at this point are pretty rountine.  And if it is a non-emergency, non-critical service, consumers could shop around.  Right now, though, since most people have these things cover by their insurance, there is no incentive to shop around.  Whatever out-of-pocket expense that your particular insurance is expecting you to pay is what you are going to pay, regardless.  But if you look a typical medical bill and see what is charged to the insurance company, it is hard to imagine those prices being charged if people were paying out-of-pocket.  And I think without the insurance coverage, market forces would force those prices down.

The problem with my plan, besides the fact that is way too vague, is I have no idea how such a thing could be implemented.  Most insurance is provided by employers, and that insurance is provided out of the employer’s free will.  So who’s to tell them to stop providing it?  Additionally, there is now a consumer expectation that health insurance should provide for basically everything.  Nobody suggesting that insurance should actually be taken away is going to be popular (and thus would probably never be in any position of power for very long).  So even if my plan had any merit, it would not be feasible to implement.

I don’t really think that I have the expertise to fix this.  My fear is that the expertise is not in Washington either.  I think fixing this would take gathering those that do have the expertise and sitting them down at table to work it out.  The bad part is the people with the expertise likely also have self interests to protect.  So they may not be willing to work toward a best interest solution for society as a whole.

And while the political climate for change in the healthcare system is probably better now than it was when the Clintons took a stab at it, I still don’t think that we are at the stage where people are willing to accept the massive change that is probably going to be required.  Therefore Obama and the govenment will need to be careful, as sometimes half-arsed changes are worse than making no changes at all.

I certainly don’t envy anyone trying to reform the healthcare system.  I actually think ultimately before all is said and done, this country will have something close to a single-payer system.  And that might not be a bad thing.  I just don’t think the country is quite ready for that yet.  Anyone have any suggestions?  Because really all options should be on the table.

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