The Antidote: How to Solve the Healthcare Dilemma

My previous post, Healthcare in America is Broken, How Did it Get that Way? elicited great response! This week week I hope to administer "the antidote" to the health care crisis. **UPDATE** This article in the August 23rd Wall Street Journal provides a clear and heart-breaking example of the horrors caused when the FDA regulates life-saving treatments. Waiting for approval for elective treatments, these women died. Deregulation would cut down on these tragedies.

Warning: This post could cause drowsiness, vomiting, or hallucinations. People who do not comprehend or believe in some generally agreed upon economic principles, such as the laws of supply and demand, value theory, and cannot accept the premises I posed in my last post will have difficulty swallowing.

While we need acknowledge what is broken, we need to acknowledge the good and build up on it, not diminish its effectiveness and scope. Admittedly, the system falls short of providing preventative or urgent coverage at a reasonable cost. However, it is universal; anyone can receive medical care.

The quality and cost of that care is my main concern. The US is a leader in health care (distinct from health coverage or insurance). We should continue to lead the world in innovation to improve well-being worldwide. Despite acclaim for universal health care systems internationally, leaders of other nations look to the US for their needs. Italian former Prime Minister Silvio Berlusconi had a pacemaker installed in the US, Canadian MP Belinda Stronach also opted for a US procedure when battling breast cancer. Because of technological advancement, the US outpaces the rest of the world in treatment of specific diseases, for example: high-risk infant mortality, successful battles and improved quality of life with cancer, pneumonia, heart disease, AIDS.

Vanessa Mason of Subject to Change correctly noted in The Economic Argument for Universal Health Care, the US system is the most costly worldwide at 16% of GDP. To keep things in perspective, we should remember we are among the wealthiest and freest nations; our choice to spend on health care is a reflection of our values and freedom to choose. However, it is hard to ignore that many other nations provide coverage at a lower cost.

To find a cure, many are eager to boast the socialized successes in countries around the world. However, we would be hard-pressed to find a universal health care system internationally not plagued by rising costs, shrinking choice, and inequality. Reviewing separate systems would prove lengthy, so let's take the best-case scenario, Switzerland, which enjoys the most market-oriented approach, under an artificially managed "market", similar to Massachusetts. Switzerland enjoys the lowest total government spending on health care of any nation, and yet, their out-of-pocket spending is the highest of any nation!

Can anyone guess why? No doubt they want better health care than the government can provide and often elect to spend money on less expensive policies with high deductibles and co-payments to provide a bit of cushion. What they don't anticipate (having put faith in their universal system or their own health) is that many will require care above and beyond what the universal system provides. Therefore they spend almost twice the out-of-pocket expenses than the US.

So, if the best universal health care system is also broken, what is my solution? How can we maintain a high level of innovation, reduce costs, and provide coverage to anyone who wants it?

• Promote and liberalize health savings accounts: reduce incentives for third party payment, increase transparency by allowing consumers to see costs of health care, curbing their consumption, driving down costs; couple with low cost, high-deductible catastrophe insurance; unused funds grow tax-free


• Correct the tax code which incentivizes health care spending for businesses: eliminate third party incentives, release health insurance coverage to the market, where consumers can choose the best option for them


• Promote the use of voluntary contracts to reduce tort law case expenditures, inefficiency, and blackmail for patients and medical professionals: many people don't realize that tort cases contribute immensely to cost of care, our litigious society will not change with universal health care, and hence these costs will remain.


• Deregulate health insurance companies, Federal programs like Medicare/Medicaid, pharmaceutical companies, and medical device manufacturers: the costs of these regulation are not worth their results, another option is to let each state regulate the companies, but open the market so that consumers could choose options by state, so if someone wanted a more heavily regulated industry, they could still choose that.
  
  Many commenters will argue, "But my health is not a commodity!" Implying in a market-based system, doctors and insurance companies will be out to cheat you. Please stop and think about this, as it is not logical. If what they provide is of great value to you and you both agree on the price, what could possible be wrong with that? Furthermore, you would choose the company treats you the way you see fit. Do you not already make these types of informed decisions when you shop for other important things, like private education or cars? The word "commodity" is not evil. It connotes something with tremendous value that people are willing to go to great lengths to obtain, not to destroy, but to ensure longevity.
  
  For example, I teach voice lessons, do you think I'm going to make a profit by swindling my students? You better believe I treat their voices like commodities, to be cared for and nurtured. The vocal folds are extremely delicate, and improper instruction can render the voice damaged and useless. If I taught poorly, no one would come back and I'd never make a profit. I get better results, therefore, more profits: my reward for providing something people want, often desperately (when it comes to singing!)
  
  
• Allow those who do not want to participate in the government-provided insurance an "opt-out" provided the above conditions have been met: in which case, you probably wouldn't want universal health care anyways...

I could write a thesis about my ideas. I'm aware I've left many rocks unturned, however, I hope I've provided some beginning thoughts on possible solutions to the health care crisis. There were many thoughtful commenters on the last post and I had hoped to respond to their excellent points here, but I had to cut down considerably.

If you didn't get your answer, I apologize, I am but a mere housewife, and dinner could be burning by now. Subscribe to Shouting to Quiet the Thunder, where I'm sure to cook up more diabolical schemes...

Stay tuned for more on this topic: Red Pill vs. Blue Pill: Does McCain or Obama Have the Right Plan for Health Care?