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Chapter 18: Fixing Health Care in America

“If you think health care is expensive now, wait until you see what it costs when it’s free!” —American author and humorist P. J. O’Rourke

 What’s wrong with

health care in America

  • There is no “free lunch.” There is no such thing as free medical care (or free anything else) from the government. As explained in the “Government” chapter, government can only take money from some people and give it to others—and it does an incredibly inefficient job of this because its ever-expanding bureaucracies take so much off the top.
  • Government is the problem, not the solution. The government’s tax code favors employer-provided health insurance. This keeps millions of Americans captive to their employer’s health plan, limits competition, and reduces consumer choices.
  • Consumers are buffered from real costs. An army of third-party bureaucracies (employers, government, and insurance companies) come between patients and doctors. In 1961 individuals directly paid 47 percent of their health care costs. Clearly, they still had an incentive to spend wisely. By 2011 individuals directly paid only 12 percent of their health care costs. When you consider these statistics, it isn’t surprising that consumers have lost much of the incentive to use common sense in making their health care choices and to hold providers accountable for the costs and results. (In reality, consumers as a group ultimately pay 100 percent of the cost, plus the overhead of all the insurance companies, employer bureaucracies, and government agencies that come between consumers and health care providers.)
  • Too many people don’t accept personal responsibility. With government, employers, and insurance companies seemingly responsible for our health, too many citizens don’t take care of themselves. They continue to abuse alcohol and drugs, drive recklessly, eat the wrong kinds of food—and eat far too much of it—and avoid exercise. The attitude is that people can abuse their health and then be “fixed” by doctors, with insurance companies or the government paying the costs.
  • Government regulations drive up medical costs. In attempting to do for citizens what they don’t believe citizens can do for themselves, bureaucrats have burdened doctors and hospitals with endless regulations that drive up health care costs as well as the cost of medical insurance.  Laws that make suicide illegal are just one example.
  • Greedy lawyers drive up medical costs. Medical professionals are forced to pay outrageous premiums for malpractice insurance. To protect themselves from malpractice suits, they often order unnecessary tests. Both of these practices drive up medical costs. Fast-talking, money-grubbing lawyers have taken a great American justice system and distorted it beyond recognition. It’s no longer about justice but rather about how lawyers can become richer at the expense of the rest of society.
  • Uninsured patients drive up medical costs. Many poor people simply can’t afford medical insurance. Many more could afford it but choose not to have it because they figure society will take care of them even if they don’t take care of themselves. (And society does take care of the uninsured. When they’re sick enough, they show up in hospital emergency wards. The hospitals treat them and pass the unreimbursed costs along to those who do pay.)
  • Regulations limit treatment options and drive up costs. Government regulations drive up costs and severely limit the choices available to medical professionals and their patients. Instead of allowing patients and doctors to make their own choices, the government decides. It drives up costs by forcing drug companies through cumbersome approval processes and limits treatment options by denying experimental drugs to dying patients.
  • Doctor quality declining.  Government regulations are making medical careers more difficult and less rewarding.  Why should our best and brightest young people go to school for so long, come out with so much debt, and then have their medical decisions and compensation dictated by bureaucrats?  Doctors are already increasingly rushing patient care and taking more shortcuts to meet government insurance standards.  This will ultimately lead to fewer and less talented doctors and lower quality care.
  • Outrageous end-of-life medical costs. Because of government regulations and the fear of lawsuits, families and care providers often feel compelled to provide more end-of-life medical care than the patient actually wants. The fact that insurance will cover the costs influences family decisions, greed is sometimes a factor for the care providers, and patients often have to endure a lot more suffering than should be necessary.

How to fix what’s wrong with

health care in America

  • Get the government out of the insurance business. Government-run health insurance plans—including Medicare and Medicaid—should be gently phased out. If nobody except the government is willing to provide insurance, it means it’s a bad deal for taxpayers too. (See more about this point in the “Government” chapter.)
  • Negative income tax. The federal government should replace all its failing poverty programs with a brilliantly simple negative income tax that would allow everybody to buy insurance to at least cover catastrophic health issues. (See the “Poverty” chapter for details about how the negative income tax would work.)
  • “Skin in the game.”  It’s important for patients to have a direct financial stake in the cost of their medical care, as well as a voice in treatment options. Higher copays and higher deductibles would cause consumers to make more responsible decisions about which treatment plans are necessary and worth the investment, while insurance could still provide coverage for catastrophic health issues. Health Savings Accounts (HSAs) could also be an important part of the solution.
  • Less government regulation. Doctors and patients need to be free to make their own medical decisions. They will do precisely that if the government stops trying to micromanage everybody’s health care. True, some doctors and patients will make poor choices—but isn’t that what freedom is all about?  And do we really want politicians and bureaucrats making decisions about our medical care?
  • More competition.  Some state insurance regulators interfere with free markets and sometimes grant semi-monopolies to insurers. Consumers would have more choices — and insurance companies would be more innovative and efficient — if state regulators allowed insurance companies to sell policies across state lines.
  • More freedom and responsibility. With freedom comes responsibility. Each of us should do a better job of making our families—and our health care providers—aware of our medical preferences. We will be more likely to do this if we know that insurance won’t entirely buffer our family from the costs. More of us might choose healthier lifestyles, less medical treatment, less suffering, and a more dignified death.
  • More innovation. One of the advantages of getting government out of health care is that more innovation could take place. With the government’s one-size-fits-all approach, sick people have to visit a doctor (sometimes several doctors) and make additional energy-consuming trips for tests. Too many of us end up in hospitals—which often make us even sicker. Many patients could benefit from medical care provided via some combination of telephone, e-mail, the Internet and at-home care. And with today’s technologies, these alternative services might be safer, more effective, and less expensive.
  • Legalize suicide.  In a free society, suicide should be a personal choice.  Laws against suicide should be repealed. (See more about this in the “Religion” chapter.)
  • Limit damages. Not every wrong can be made right; sometimes life isn’t fair. States can set reasonable limits on damages that can be awarded in civil cases, including malpractice suits. When an ambulance-chasing lawyer convinces jurors to make an outrageous award, the cost ultimately falls to consumers in the form of higher insurance rates.

 “We need not speculate as to what effects price controls can have on medicines and medical care because there are already shortages of both in countries where a government-controlled medical system includes price controls.”—Thomas Sowell, American economist and columnist

4 Comments
  1. Many good ideas are put in the tract ” Fixing America’s Broken Politics” . There is a lot to info to digest. I’m just getting started!

    Like

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  1. How to fix Health Care in America « Fixing America's Broken Politics
  2. Action Plan to Save America « Fixing America's Broken Politics
  3. Book chapters, with live links « Fixing America's Broken Politics

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