Aug

16

2009

HEALING OUR HEALTH CARE SYSTEM

by StanfordDude

The focus of the national agenda this summer has clearly become reforming America’s health care system. Bring it on! There is no question that our health care system needs to be reformed to squeeze out the much inflated expenses and to assure high quality care. The American healthcare system is the most expensive in the world. And it is clear that, by any statistical measure, we are not getting value for money. Not only do these costs put proper health care out of reach for many middle class Americans, but these inflated costs are also making our products uncompetitive in the world economy, adding to our other economic problems.
 
Unfortunately however, in the proposals that have emerged, we seem to have taken our eye off the ball. The true challenge – the cost vs. quality issue – has become sidetracked. The debate has now become about health insurance, though this is only a part of the problem. Important as it is, insurance coverage is merely a way to pay for medical care. The focus should really be on the actual medical care delivery system, where the costs versus quality problems are to be found. To date, we have not touched those issues.  We are, in effect, putting the cart before the horse. And if the acrimony over insurance is any guide, the storm from that debate will be even more ferocious than today’s.
 
Since the discussion is now centered of insurance, it is worthwhile considering the merit of the existing proposal otherwise knows as HR 3200 Two questions in particular seem to be the most contentious: 1) will such a system lower patient’s medical costs 2) how would the public option impact the existing medical insurance system.  We would, of course, a ll like to see the 47 million currently uninsur ed people have access to quality health care, especially in catastrophic situations. But the stark reality is that suddenly adding such a large block of people in a total spectrum plan will cause a sharp spike in medical costs. It is a simple supply and demand calculation. Add to this the $1 trillion price tag and you get a big new shock to the system – at a time when the system can least absorb it. We should first streamline the system before we add a major new load onto it.
 
But the bigger issue is…

…whether the government can and should be in the business of creating and operating an insurance company. To date, the case has not been made that a government owned and run entity can do a better job of providing medical insurance. This is largely because the public sector is inherently not very efficient in providing goods and services. President Obama himself inadvertently made this point in Portsmouth when he referred to the low level of efficiency in the Postal Service relative to private carriers.
 
As such, whenever government attempts to provide societal goods and services, it must layer in either subsidies or special powers to remain competitive. This is clearly the case with Medicare where there are severe punitive consequences for people aged 65 or greater who wish to opt out.
 
The case is also being made that people who are happy with their existing public sector insurance entity will not be forced to shift over to the public entity. The fact of the matter is that the current proposals run the risk of creating conditions under which the government entity will “crowd out” the private sector. The existence of a public sector option will invariably create conditions in the country whereby private sector companies can cease to offer health care as a part of their benefit packages – just as (supposedly supplemental) 401Ks inadvertently crowed out defined benefit pension plans.
 
With such high stakes at issue, the Congress should not be trying to steamroll this issue through and into law. We should take a comprehensive approach to the issue and work towards a well thought out approach. Above all, we need to get the government out of the business of providing goods and services and leave it to the private sector which is much better at this task.

Bob Bestani is a Candidate for the U.S. Congress in New Hampshire’s 1st Congressional District 

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  • Michael Kitch

    I am confused. Mr. Bestani begins by saying that health insurance is not the issue, proceeds to say nothing about what he says is the issue — medical care — , and concludes that the government, which through Medicare, Medicaid and the VA insures between 40% and 50% of all insureds should not be in the insurance business. Say what?
    Does Mr. Bestani believe that genuine health care reform should tackle the “medical care delivery system,” in other words legislate how physicians and hospitals would care for their patients? Now that would be a government takeover of healthcare.
    Please clarify.

  • http://BobBestani.com Bob Bestani

    Health insurance is important. But the American system of actually delivering healthcare is the real problem. It costs too much, absorbs too much national resources and is far less efficient than most of the rest of the world. “Wellness” is not benefited by these costs. As such the American middle class is not getting value for money.
    We need to get those extra costs out and make medical care more efficient for the American people. Only then should we add another 47 million people into the system. Absent that, medical costs to the nation will skyrocket.
    No we do not need the government to legislate changes to the system. That would never work. But there are things that the government can do to improve the “enabling environment.” Tort reform is an excellent example.
    Overall, I believe we need to get government out of the business of providing goods and services. We know that government is very bad at this and generally fails to compete with the private sector which is much better at optimizing the best use of resources.
    Bob

  • Michael Kitch

    According to the Dartmouth atlas, the best source available, where the supply of medical providers and facilities is greatest, the costs are highest and as much as 30-percent of the care is unnecessary. A recent article comparing the very different relative costs of medical case in two communities in Texas found that where costs were high the medical community was characterized by what could be called a “commercial ethic.” Although tort reform is probably desirable, it seems doubtful that it alone will change the practice of medicine sufficiently to significantly reduce the costs. Moreover, many studies suggest that the differences in healthcare between the United States and comparable countries stem in large measure from much greater administrative overheads, including profits. Perhaps you could explain more precisely what role, if any at all, government should play in the provision of either healthcare or health insurance? Should Medicare, Medicaid and the VAs be abolished?

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