So Instead of Turning Healthcare into Public Housing…

…Or nationalize it, or national socialize it — whatever the plan is, what are some better ideas?

A few facts first: Most people aren’t that unhappy with their insurance. American healthcare is better than anywhere else. No one in America goes without medical care. Healthcare is not an infinite resource. And most importantly, most health problems Americans suffer — the vast majority of all costs –are the result of lazy, indulgent, and stupid lifestyle choices.

Sure, there are some problems that need fixing but nothing that justifies destroying the health industry by turning your doctor’s office into the post office. So what are some alternatives?

Whole Foods CEO John McKay offered eight perfect starting points.

Virginia Postrel wrote about what’s wrong our system in the Atlantic.

And now John Jay Myers, former candidate for Dallas City Council, offers his thoughts, in response to a Facebook meme last week. Take it away, John:

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By John Jay Myers

With the health care debate on everyone’s mind, this quote has been floating around some of my friends on the social networks:


“No one should die because they cannot afford health care, and no one should go broke because they get sick. If you agree, please post this as your status for the rest of the day.”


To that I say “of course”.


The question is, by what means do you want to establish affordable healthcare? Do you want to use the magical fairy dust method, which somehow brings about great service and better care, covers more people, and doesn’t cost a dime? Or, do you want to endorse the only method of reducing costs that has ever worked in the real world, the free market?


Some will say, “wait a minute, isn’t it the free market and the greed of corporations that caused ridiculously high prices in the first place?” No, it is not. There is no free market in health care right now, so the free market cannot be the cause of the high prices. Here’s an example to illustrate the point.


Let’s talk about a simple commodity: food, specifically fast food. Right now as consumers we have nearly limitless choices of places to go, and a broad variety of menu options at each restaurant. If prices at one place get too high, we go across the street. If the deluxe meal is too pricy, we forego the fries and drink, or choose from the dollar menu instead. Fast food is therefore inexpensive because of a relatively free market.


Read the rest after the jump.

But if government regulated fast food like it does health care, it would be a very different story. We would first be forbidden from crossing the street to buy our lunch. We would be forced to take the one on our side of the street. Next we would be unable to choose among the various menu items and would be compelled to take the standard meal. Government mandates would require us to purchase the fries and drinks even if we didn’t intend to eat them. Prices would skyrocket due to few alternatives and coerced food purchases. This is the way health care is handled now, and this is why there is no free market in health care.

This situation came about due to building government intervention over many decades. During World War II the government engaged in wage and price fixing. This forced businesses to offer health benefits to attract employees, since they could not offer higher salaries. Prices rose as a result of ever increasing demand as more and more employers provided coverage. Higher prices led to a problem where retired people who didn’t work could no longer afford health care costs. The government’s solution was to institute Medicare, another program where artificial demand grew exponentially because there were no market controls. Then came Medicaid. Due to lobbies from various groups like big pharma and the AMA, government regulations restricted supply just as demand was ballooning, and this soon created a very un-free market that only helped to super inflate prices.

This was great for insurance companies, because if health care prices become unreasonable then it means you will have to purchase insurance. So the two industries have driven prices almost off a cliff. But instead of understanding that the solution would be to remove government involvement in health care, there are people who want to just build a higher cliff.

The $20 Snickers Bar

Okay, so here is the situation we’re in right now. There is a Snickers bar in front of you. You go to grab it, and I say, “hold on there big fella, that will be $20″. You say, “$20 for Snickers bar!? That is way, way too expensive!” That’s when I get a big grin and say, “that’s right, and I am with the government and I am here to help”. When you hear these words, it’s always a good idea to run.

Now, here come the solutions.

The Bigger Government Solution:

Regulations and barriers to entry removed the supply of many colorful choices that used to be available. They then realize it’s now too expensive for you (notice the addition of “for you”) so they now propose to charge each of your friends $1, and then you can get that $20 snicker bar for only $1. Your friends are a little upset, and you have not actually changed the ridiculous price, but in some strange logic it has now been made “affordable”. In fact the $20 Snickers bar will become even more expensive as the government collective increases demand while even tighter regulations strangle supply.

The Free Market Solution:

We realize it’s too expensive, so we remove the barriers to healthy competition and consumer choice. By keeping the government out of it and opening the free market, the next thing you know people are offering you Snickers bars for $10, then $5, then a Three Musketeers for $2, then a Milky Way for $1 and some guy shows up offering you a Snugget bar for $.50 (I have no idea what a Snugget is…but it sounds delicious).

The people in need, the ones who absolutely cannot afford it, are few enough, that just the donations of doctors and charity would cover them.

This isn’t about saving lives. It’s about the fact that people were about to revolt against high prices, and the government has been lobbied to get involved and force everyone to pay, which will allow the prices to stay artificially high.

Our hospitals are flooded with people that are receiving free health care right now. They are not dying. But the thing is, they are not happy and neither are the hospitals that have to provide it, nor are the taxpayers that get billed the cost of “free” emergency room visits at five times the rate of a normal doctor visit.

Whereas little clinics like the one by my house are popping up and people are flocking to them. The care is not free. It costs $80, but these folks are willing to pay $80 to avoid paying $1600 and waiting 8 hours in a congested emergency room.

Some say we have to do something, else insurance premiums are going to jump up to 3 times their current level in the next few years. No they wont. Do you know why? Because no one is going to pay it. That is unless we get locked into some sort of universal government plan, then I guess we will be forced to pay it.

The only reason the government wants to be involved in health care is because they want to maintain high drug prices, high insurance prices, and high care prices for their lobbyist friends. It also gives them a reason to justify their existence. Most problems the government tries to solve, are problems it created.

The more government gets involved in health care, the more we head towards potentially limitless price increases. Do we currently have unlimited pricing for fast food or candy bars? No, because the free market offers a multitude of choices. But since government is involved in health care, it now uses the problems it created as justification for even more intervention.

Specific Proposals

- Allow people to purchase insurance anywhere giving consumers many more health care options. This measure alone will make health insurance available to so many more people.

- Allow Doctors a dollar for dollar tax rebate for serving patients unable to pay for services, during a transitional period.

- Allow competition from clinics staffed by nurses to handle small medical needs.

- Encourage individual insurance plans by giving them the same tax advantages of employer insurance. We should initially discourage government and employer based health care plans, since this is the source of outrageous costs.

- All people are then free to purchase their own insurance, but, since it is their own money they will be much more thrifty and competition will be increased.

- Phase out Medicare and Medicaid over 20 years. They are bankrupt institutions that have bankrupted this country. Encourage buyouts, right now.

- Encourage personal medical savings accounts that are tax free, and unused portions are passed on to families.

- Any type of government health care is done using “health stamps”. Like food stamps these would allow people to understand exactly what they are spending. When you have transparency of costs, you have desire to control them. This would also encourage people to shop around to get the most bang for their buck.

- Tort reform to make payments more realistic will further bring down health care costs.

Make health care bills easy to understand so customers have a better idea of what they pay.

- Allow a place on tax forms so quick donations to the needy can be made voluntarily.

- Finally, any other health care measures should be left to the states according to the 10th amendment of the constitution.

If we enacted some of these changes to actually create, rather than further prevent, a free market in health care, then we would greatly reduce costs. Additional regulation and artificial demand leads to waste and fraud, and gives consumers the false impression that their health care is “affordable”. Health care is a commodity like any other because of its scarcity. Now, let’s treat it like one and give people the freedom to make their dollars work in the most efficient and effective way possible.

Comments

  1. Anonymous says:

    A few facts first: Most people aren’t that unhappy with their insurance.

    Bullshit. Do you ever talk to real people, or just the margarita-addled gun-nuts in Plano?

    American healthcare is better than anywhere else.

    Bullshit again – it’s more expensive than anywhere else, not better,

  2. John Shuey says:

    Hmmm…

    I can see why “Anonymous” chose to remain so — he or she is totaly unaware of the facts.

    Hey “A” — 68% of Americans are happy with their healthcare – Rasmussen Poll, last week I think.

    The US healthcare system is easily the best – why do leading politicians from socialized healthcare nation constantly come here for treatment?

  3. Daniel says:

    I would be interested in seeing the cost projections for the public monies that would be spent if these proposals were enacted. Particularly bullet point #2. John Jay does realize that the ranks of the uninsured are growing, right?

    And what metrics would be used to determine who is unable to pay? What entity would do the determining?

    These are sound measures for reining in escalating costs, but not for saving My Tax Dollars per se. As more and more people become uninsured or marginally insured, we’re all going to pay out the ass one way or the other for their care, is the implacable reality.

    That said, the viral Facebook meme thingy sort of nauseated me.

  4. Victor S says:

    In health care, as an all matters, government knows best, Garrison. Now crouch down and lick the hand of the state, then toddle off to watch American Idol.

  5. If I could push a magic button, that broke the tie between employer and government health care plans, and just gave people the money spent instead.
    I would push it.
    I wouldn’t go to far as to make a law to disallow it… but it’s what we need to correct 70 years of a system that the government fouled up.

    Most of my plans are free to the public.
    Not having health insurance is not the same as not being able to afford it.
    But lastly, you have to understand, what this plan does is make health care affordable.
    In other words, you wouldn’t need Insurance except for catastrophic coverage, ie 25k or more.

    You really have to think in terms of how did we get here?
    Also, I pointed out in the article, that we do pay 5 x cost, for the free emergency room visits… that needs to stop.

    Dan, your basically saying, “it’s too expensive…help government” well, I am trying to make “it’s too expensive…. ohh here is something less expensive, I will buy that”.

  6. Daniel says:

    I’m not saying, Help, government — I’m saying the government already is paying quite a bit to cover healthcare for the uninsured, in a way that is grossly inefficient, and your suggestions, while excellent, don’t address this. Ideally, a public option would restructure that public expenditure to make it more efficient. For the amount it costs taxpayers when an uninsured person takes his kid to Parkland with a sore throat, that entire family could be insured for half a year. There’s got to be a better way. It probably should come at the state, rather than the federal, level — at least administratively. But this is Texas.

  7. Daniel, I agree for the most part. There are clinics popping up that charge $80, for a doctor visit. So a sore throat would cost $80, that is what “Family Clinic” on Buckner charges.
    Which is why many uninsured people who live near me are starting to fill the place up, they would rather pay $80 than sit in Parkland.
    But because of outrageous costs, created by government intervention, they can’t afford $800 for a sore throat.
    So my point is that there is a better way…. don’t flip out on me… but the better way is to not force hospitals to take people into the emergency rooms for anything but….. emergencies. Or at least stop putting the cost on the tax payers.

    The Family Clinic business would explode, creating jobs, creating affordable care, and taking the load off the tax payer. But while the tax payers are still on the hook to pay 5 times costs at emergency rooms… the hospitals probably don’t want it to stop either.
    Thank you for your polite intelligent responses.
    I am not used to that on blogs.

  8. amanda says:

    Actually, John, hospitals would LOVE a decrease in traffic…in the instance of Parkland…they don’t get paid for up to 80% of the care delivered via the ER. The county has slashed the “indigent” budget incrementally over the past 10 years, and some counties (like Collin) have no central indigent county-wide facility (and a shrinking budget).

    By law, hospitals have to treat “life threatening” illness/injury without concern for ability to pay. Headaches and stomach pain are in that category until/unless a non-life-threatening cause is determined (hence, thousands in lab tests, MRI, CAT scans, etc.) That’s EVERY hospital. Presby would love to see the “I stays at my cousins house…” billing forms vanish.

    Some folks will still use the ER no matter what. We’re 40 years into “free” coverage and care. The people you hear with bankruptcy due to medical bills? Those are the people who “tried to do the right thing.”

    Believe it or not, hospitals/providers cannot offer cash discounts, or any discounts individually to patients under, that’s against the law. But, we can automatically get retro-Medicaid for anchor babies. Yes, that part of the system is broken.

    When I was a healthcare consultant, and we were asked look at Hilarycare, back in the day, we looked at systems of a dozen or so “socialized” countries. Of those, and yes, Daniel, I’m gonna beat that dead horse, Germany shone bright as an example that works. In Germany, the doctors do pay private malpractice carriers for covereage, but are heavily incentivized to provide indigent care. They get personal and professional tax breaks to do so. Think what would happen if providers could choose to “give away” 10, 20, 30 percent of their time to care for the un or under-insured. That would work privately, no need for a government solution. We just change the tax codes to let the market work…

    That’s a real solution.

  9. Daniel says:

    You’re right about Germany. I investigated it owing to comments you made way back in FB days — to my profit.

    But God forbid Obama’s most rabid critics should have one more reason to call him a “Nazi.” He’s already Muslim, which is nearly identical to being a Nazi; can you imagine if he were a German Muslim Marxist?

  10. Thanks Amanda, that one is actually in my list:

    See dollar for dollar tax credits, I met with Dr. Rand Paul from Kentucky, here in Dallas at a fund raiser, that was his suggestion.

  11. Peterk says:

    is there a direct link for mr. myers plan? rather than through Trey’s blog?

  12. amanda says:

    Having worked in healthcare, I’m 100% certain that all providers would opt into voluntary indigent care. Hospitals, too, if there was a market incentive.Big Pharma could get in on the act, too, and use donated low/no cost scripts as deductions to offset R & D.

    But, Daniel’s right, some people just want to bitch. Me, I want a skittles shitting unicorn.

  13. There wasn’t but there is now.
    I still have not added some additional free market solutions that I may add.

    here is the link… very no frills:

    http://www.johnjaymyers.com/HealthCare.htm

  14. Pepe Gonzalez says:

    Look, unless you offer free emergency care to indigents, you can forget about the rest of my extended family sneaking across the border.

  15. Anonymous says:

    WASHINGTON (Reuters) – The number of people living in the United States without health insurance rose to 46.3 million in 2008 from 45.7 million a year earlier, a U.S. Census Bureau official said on Thursday.