'Free Market' Healthcare: Fix It Now, Before It's Too Late 9 comments
Michael Steinberg
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The free market idealists in the Bush White House finally conceded to an uncomfortable, but necessary and pragmatic approach to healing the financial system. The free market financial system collapsed under their previous convoluted attempts at patchwork repairs. Just like the uncoordinated fixes in the financial system, the American approach to healthcare has suffered more than its share of free market patches.
The Treasury, Federal Reserve and FDIC grudgingly admitted this morning (10/14/08) that the British and the Euro zone countries forced them into a systematic methodology of non-punitive equity purchases and guarantees to revive our banks. The United States would have to play ball or suffer capital flight to safer nations. Now it’s time to stop pretending that we have a free market healthcare system and learn how to distribute healthcare from the rest of the world.
In "Keep Remaining Blue Cross Non-profits", I wrote that health insurers of last resort were disappearing. Now The Wall Street Journal “Nonprofit Hospitals Leave The City for Greener Pastures” reports that large chains of non-profit hospitals are abandoning poor inner city neighborhoods for the more profitable suburbs. The Medicaid and uninsured patients are just not as desirable as patients with unlimited health insurance.
Healthcare equipment and service providers are increasingly facing a “you can run, but you cannot hide” scenario. General Electric’s (GE) imaging equipment sales are meeting resistance and UnitedHealth Group (UNH) is becoming increasingly dependent on the “socialist” government for Medicare membership. Private health insurance companies are having increasing difficulty selling their products to our citizens. The insurers have lost their value proposition. Who’s kidding who about a private enterprise free market healthcare system?
It appears that the Barack Obama Administration will drop the fake free market idealism and deploy pragmatic health insurance solutions. John McCain has learned nothing from Treasury Secretary Paulson’s struggles under the Bush Administration. It took a combination of the financial crisis reaching a crescendo and British pragmatism for Paulson to brake free. A dose of Goldman Sachs (GS) trouble didn’t hurt either. John McCain continues to search for that elusive free market healthcare solution that doesn’t exist.
Disclosures: Author is long GE and UNH.
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This article has 9 comments:
The two countries most often cited as study cases for a National Healthcare system-- Canada and the UK-- have special situations that do not transfer to the U.S.
Both countries had (past tense) very high amounts of natural resource taxes and royalties-- Canada from the Alberta and artic regions, and the UK from the North Sea fields.
The North Sea fields have peaked (according to the UK government AND the oil companies, as well as the government of Norway). The British NHS is in serious financial trouble, with rampant cutbacks. While US patients can have almost any surgery they need inside of a week, many Brits have to wait 6-9 months for many surgeries. Brits are pretty much restricted to seeing one doctor only-- unless they are literally going to die on the spot.
The U.S. tried similar measures via HMOs. U.S. citizens were outraged at delays / rationing that was not even half as severe as the norm in the UK.
Lastly, many doctors in the UK have left the NHS and gone into private practice-- so there are TWO healthcare systems in the UK. One for the rich, and the NHS for everyone else.
Canada's healthcare system enjoys more support from oil royalties than the UK (it has more oil exports, and it has a smaller population -- so the subsidy per person is much higher). None the less, Canada's government is also facing financial pressure of how to continue funding its healthcare system.
Like the UK, Canadians regularly accept delays and rationing far more severe than what HMOs in the US tried to do several years ago.
Both the UK and Canadian governments have demonstrated better (even if not perfect) success at creating and maintaining national transportation systems (railways, airlines, roads, etc) than the U.S. government.
The U.S. government is known for paying $100 billion for a single bomber. Medicare has rampant fraud and constant budget overruns. It is laughable to suggest the US government will have more success at controlling cost than the UK/Canada. Based on past experience, the US government is likely to be far LESS successful.
And few US citizens have bothered to think about what national healthcare would mean. For example, right now a decision to have an abortion is between a woman and her doctor. Once the government becomes the sole payer in the system -- Roe v Wade could easily be overturned as a one line rider in a budget bill. Any doctor who performed an abortion would forfeit all payments from the government.... Once healthcare becomes a government function, the power of the purse can (and will) be used to allow politics to enter every healthcare decision.
Do you believe insurance company profits are reinvested in healthcare?
Do you believe the consolidation of our hospitals and clinics into mega consortiums creates better, more affordable healthcare?
Lets see I guess if you are partially subsidized by your employer you are getting a bargain. Not "wages" but a "healthcare bargain"
Ever deal with insurance companies? At a government office at least you know what to expect. You will still get your drivers license.
The insurance companies will ALWAYS go out of their way to stiff the consumer. Its in their manual. Interesting that the US is the ONLY country in the developed world with a "privatized" healthcare system.
And also has one of the highest rates of infant death per birth.
Gee those mega monopolies are REALLY holding down healthcare costs.
O, by the way, Saddam has weapons of mass destruction to unload.
Go back and read my post again. try to find the sentence where I said the current "healthcare system of insurance company / mega healthcare company monopolies is really the greatest in the world. Huh?"
That isn't what I wrote. if you are even halfway literate -- try reading the very first sentence I wrote: ***there is no question that the current health care system is a mess***
Insurance companies do not want to cover high risk individuals.....do not want to cover pre-existing conditions.....do not want to cover 50 year olds......do not want to cover individuals period...do not want to cover mom-pop small businesses.
Let's see - that leaves young, healthy, or large corporate group. If you are fortunate enough to be one of those, you tend to think 'free-market' is fine.
Our delivery/financing of health care in this country is a joke. It is just as criminal as the perpetrators of the financial crisis.
Pardon me, I am 50+ and have to go fill out my medical questionnaire hoping this insurer will accept me, after another 30 day wait, so I can pay $500 a month for a $5,000 deductible 70% plan.
Insurance is a way to protect yourself from RISK. It is not, and never was, a way to pool expenses so that young people can subsidize obese smokers.
Car insurance is not a way for bad drivers to share their expenses with good drivers.
If you have a pre-existing condition, that is not a risk. You know with absolute certainty that you are going to have the expense. And make no mistake -- it is YOUR EXPENSE. I just recently priced new insurance for myself -- if you are paying $500 per month with a $5000 deductible, it tells me you have a pre-existing health problem, and you want someone else to pay.
You have a lot of nerve expecting the rest of us to pay for your health decisions. People like you are the real criminals in the health care crisis.
The problem with our healthcare system is run-a-way costs; not the availabilty of insurance. As you state-- you are able to get insurance, but it costs too much.
People who claim the issue is about how many people are uninsured are ignorant and don't understand the real problem.
Most of the businesses that canceled (or failed to provide) health insurance did so because health care costs were increasing 8-10% per year historically (and closer to 10-11% more recently). While some businesses grow 10% for a few years -- no business grows that fast over long periods of time... GDP growth has been about 4% over the long haul -- and by definition that is what the average business growth rate is.
Healthcare, or anything whose costs grow faster than GDP, is going to become unaffordable.
Health care costs are growing out of control, at least in part, because this country has too many people, sitting on their sofa with a twinkie in one hand and a cigarette in the other, complaining that they can't get something for nothing.
Grow up!!!