Conservative and Free Market Solutions to Health Care Reform
If you read some of my earlier posts on government health care insurance, and the reform our liberal Democrat friends are pushing, you know that I believe this will be an absolute disaster for our health care industry and will by no means lower the costs of health care in this country. I’ve searched for some of the conservative solutions, and have found little information (besides heritage.org) on some alternatives to government run health care.
Its clear to me and probably almost everyone within the US, that health care costs are skyrocketing and something must be done to reform the system. You will find very little argument from the right or the left that health care needs to be reformed in order to lower costs, so we are all in agreement that something must be done.
I would like to use this post to give you 2 conservative free-market solutions to drastically lower health care costs in this country. In order to identify these solutions, I need to explain what I believe to be the 2 main causes of our massive increasing health care costs, because within the causes lies the solution.
Health Care Insurance is the 1st Problem – Not Insurance, but Health Care Insurance
Everyone agrees that health care and health insurance is way to expensive and needs to come down in price. But to fix this we need to first look at why health insurance is so expensive, and then we can identify how to lower the price. I can go into this myself, but this can best be explained by John Stossel in his quote below. He makes it very clear why health insurance is so expensive…
“Health care ‘reformers’ keep talking about getting us more health insurance. Then they talk about cutting costs. This is contradictory nonsense. Insurance, whether private or a government Ponzi scheme like Medicare, means third parties pay the bills. When someone else pays, costs always go up. Imagine if you had grocery insurance. You wouldn’t care how much food cost. Why shop around? If someone else were paying 80 percent, you’d buy the most expensive cuts of meat. Prices would skyrocket. That’s what health insurance does to medical care. Patients rarely even ask what anything costs. Doctors often don’t know. … Patients rarely ask, ‘Is that MRI really necessary? Is there a cheaper place?’ We consume without thinking. By contrast, in areas of medicine where most patients pay their own way, service gets better, while prices fall. … This shouldn’t be a surprise. What holds costs down is patients acting like consumers, looking out for themselves in a competitive market. Providers fight to win business by keeping costs down and quality up. Yet politicians keep telling us the solution is more insurance. And they mean insurance not just for catastrophic diseases that could bankrupt us but also for routine treatments. The politicians are so oblivious to reality that they are on course to make things worse.” –ABC’s “20/20″ co-anchor John Stossel
As Stossel points out… health insurance is so expensive because it is no longer set up as catastrophic type insurance, such as auto insurance and home owners insurance. Instead it has become a pay this fee – get everything in return type of system. That is why even if the government takes over the entire health care system, costs will continue to sky rocket! (Guaranteed!)
The problem is within health insurance itself. It causes people to consume more than necessary because someone else is fitting the bill. (i.e. lack of free market forces) To lower costs we need to return as a society to a catastrophic type insurance option for health care with normal business transactions for everyday type need. This would allow the free market to operate within the health care world and bring costs down as health care providers compete for your business.
Believe me, this isn’t a crazy idea. For normal doctor’s visits you would essentially pay cash or credit. If there was a expensive surgery or procedure your insurance would then cover the bill as it does today. (just like auto insurance for your health) This would cause you to shop around for best prices, and keep yourself more physically fit knowing that if you are not… you will indeed pay higher prices all around.
There is a simple rule to lower costs in any business environment – create competition! Whenever this is removed, prices skyrocket. By creating competition in the health insurance world, prices will decrease and people’s pocketbooks will increase! (nice scenario right?!) This would happen like so; as market forces enter the health care world, competition amongst insurance companies and doctors would cause prices to decrease. Sure you would pay cash for many health related transactions, but your income would also be greater because of the decrease in insurance costs. (Not to mention more jobs created due to increase funds at corporations who currently provide insurance.) In addition, you would also get better medical care, because the added competition within the health care world would cause hospitals and doctors to provide absolute supreme care. (Why wait, lets start today!)
The worst solution seems to always be the politicians solution. (aka…more government) This is because it gives them more power over the people, and the ability to manipulate the industry to maintain their power. The one solution we should never adopt is more insurance, especially with the government running the show. You can be sure costs will skyrocket and no problems solved. Not to mention the unforeseen consequences and risks of the government taking over one of America’s largest economic industry.
Tort Reform is the 2nd problem – We Need Reform!
I was talking to a doctor friend of mine this last week and asked him what he thought about President Obama’s health care plan. Obviously he wasn’t impressed, (I haven’t met a Doctor yet who is…) but I further pressed him on what he thought would be the best way to lower health care costs. His answer: Tort Reform.
We have all seen them… Anyone who watches TV will catch the endless commercials by tort lawyers trying to find their new profit centers for frivolous lawsuits against endless industries. (the biggest = healthcare) Is it any doubt we as a society have become sue happy, profit seeking individuals, that will use any method to increase financial prosperity at the expense of another individual or company? It is a sad sight indeed to be constantly bombarded by these greedy lawyers and plaintiffs…
To lower health care expenses charged to the insurance industry and the citizen, we need as a people to address tort reform. This is not to say that we need to change the process of law, and the great benefits of trial by jury. But it is to say that lawsuits have increasingly become frivolous to the effect that many procedures in health care are only prescribed because of fear of malpractice lawsuits, and not based on the evidence at hand to the Doctor.
Everyone knows that Doctor’s malpractice insurance is increasing… Logic would make you believe that this is because the quality and skill of Doctor’s is decreasing. (Right??? If malpractice insurance was decreasing, than quality would be increasing?) But in reality, frivolous lawsuits are causing this trend, and they have a death grip on our spiraling health care costs. They are by far one of the fundamental reasons for our increasing health care burden.
The ATRA reports the following on the increasing costs of our legal system due to frivolous lawsuits…
Today, America’s $246 billion civil justice system is the most expensive in the industrialized world. Aggressive personal injury lawyers target certain professions, industries, and individual companies as profit centers. They systematically recruit clients who may never have suffered a real illness or injury and use scare tactics, combined with the promise of awards, to bring these people into massive class action suits. They effectively tap the media to rally sentiment for multi-million-dollar punitive damage awards. This leads many companies to settle questionable lawsuits just to stay out of court.
These lawsuits are bad for business; they are also bad for society. They compromise access to affordable health care, punish consumers by raising the cost of goods and services, chill innovation, and undermine the notion of personal responsibility. The personal injury lawyers who benefit from the status quo use their fees to perpetuate the cycle of lawsuit abuse. They have reinvested millions of dollars into the political process and in more litigation that acts as a drag on our economy. Some have compared the political and judicial influence of the personal injury bar to a fourth branch of government.
In addition they claim the following eye opening statistic…
“The cost of the U.S. tort system for 2003 was $246 billion, or $845 per citizen or $3,380 for a family of four” and “The Growth of U.S. tort costs have exceeded the Gross Domestic Product (GDP) by 2-3 percentage points in the past 50 years.”
Wow!, Is it any doubt that tort law is one of the chief causes of our increasing health care costs! Tort reform must be debated and used as an option to reform the health insurance industry. Without this critical piece, true reform will never be realized.
Conclusion
As thinking patriots there are indeed options outside of a government run health care system. The free market always offers excellent solutions to almost any problem. As a people, we must remove the government veil on everything in life, and begin to think a free individuals as guaranteed in our Constitution. We must allow the free market to operate without the dead hand of government intervention. In addition, we do not have to submit to the liberal’s belief that the only solution is government, government, and more government. This is a fallacy and in the end will destroy our country, liberty, and prosperity.
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