First, the bad news: it is extremely unlikely that Congress will get health care reform right.
The good news: with sufficient pressure from you, citizen taxpayer, Congress may at least end up pointing in the right direction.
There are three factors which will create a fair market for health care products and services.
- Consumers – most people get health insurance from work. It causes a major market distortion for everyone else.
- Transparency – prices need to be easily accessible by the public for easy comparisons, otherwise there is no real market.
- Competitiveness – Doctors will compete for business in a real market place.
Employer based insurance must end. Instead, insurance needs to become what it is in every other market – something to deal with catastrophic, unforeseen circumstances.
Harvard University business professor Regina Herzlinger is stuck in exactly the same place as most Americans—her employer, in this case, the president of Harvard, buys her health insurance for her. “I wouldn’t permit him to buy my house or my clothing or my food for me. Yet as my employer, he could take up to $15,000 of my salary each year and buy my health insurance for me, without knowing anything about my preferences or needs. It’s ridiculous.” Indeed it is.
Paying for an annual checkup with insurance is as silly as paying for groceries with insurance. There will be something for everyone, much like shopping for groceries. Some people go to Whole Foods, some to the local Walmart.
Cost-conscious general contracters exist in the housing market because of consumer demand, not government mandate. Similarly, consumer choices have driven the housing market to create the huge variety of options including high-rise condos, gated communities, rental apartments, manufactured housing, townhouses, and suburbs filled with ranch houses, Tudors, and Cape Cods. Competition in medicine would force physicians, hospitals, pharmaceutical companies, and other practitioners to figure out ways to reduce costs. Perhaps a medical general contractor model would prove most effective at lowering costs, but why not let some people go a different route?
Government run programs like Medicaid, SCHIP, and Medicare should be shut down. Right now they distort the market by underpaying doctors for some procedures, who in turn must charge private insurance companies more to make up the difference. Instead, the government can issue vouchers to the poor who may then use them to purchase medical care from the private market.
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