Posted by
liberalturnedconservative on Sunday, September 06, 2009 4:55:10 PM
Call me stupid but I just don't get the debate on whether we should have private competition or a public option in health care. There are several reasons for this.
1. Televisions, pharmaceuticals, furniture, cars, and clothes. What do these items have in common? Well, common sense can tell you that we have wide-spread choices in the private market on what we want for any of these items. The quality (except for clothes where quality often matters less for fashion followers than the current trends) of the items have all come way up over time and the prices have come way down. The profit motive is the main contributing factor for this. Just to take televisions for example. A few savvy companies rolled out black and white rabbit antenna tv's back in the day, made wild amounts of money as tv's are a product everyone wanted from day one. When their profits got high enough, in a free market, other entrepreneurs enter the game to try to win a slice of the profit pie. Prices come down as more people compete, quality comes up as each entrepreneur tries to win and keep more of your business. Companies fail as a handful float to the top for the quality of the product offered. Prices start to come back up. When the profit motive is high enough again to entice free market entrepreneurs to want to compete with a better product, the entire cycle happens over again with the product being offered just getting better and better and better.
2. Social Security, Medicaid, Medicare, the USPS, Amtrak. What do all these have in common? All are programs that either are currently or will be in the future running deficits. For business people, that means they aren't bringing in enough money to fund their operations. When a company doesn't have money to fund its business, it has several choices. It can 1) raise prices to try to make up the difference in funds from their customers, 2) reduce staff and work to eliminate waste (otherwise known as trimming the fat), or 3) go bankrupt and either eliminate the business altogether or reduce the debt on their balance sheets but also destroy their capital raising capacity within the near future. In the private market world where reality reigns and not lollypops and rainbows, the business owner knows that number 3 is a wealth killer. A business owner wants to keep their business to keep their wealth and their potential for more future wealth. As bankruptcy destroys credit scores and the potential to borrow enough capital for the business to survive, it is a terrible, last resort option. A business owner equally knows that if the free market does not support charging more for its product or service, they may lose more customers and lose even more money in the future. If another competitor decides to open up a shop across the street because they see you are overcharging your customers, you will go out of business. A private business owner knows that option 2 is the only way to continue to grow their business. Profit must be created to be used to enhance the future interests of the company, whether that be for research and development, starting a new division in another area, rolling out a new product or service, more advertising to increase the scope of customers, etc.
A public option, as far as I can tell, would never work because taking profit out of any business model stifles innovation. If there is no extra money for all items listed above, business owners/government cannot continue on our current path toward finding the cures for many major life-ending diseases. The additional profit hospitals make from charging what they do might pay for a new wing for the hospital, more doctors and nurses as needed, trying out new, costlier products/machines that may save them more money over time but that cost more upfront.
I do agree that insurance companies making a huge profit while dropping sick customers is a problem that needs to be remedied, but, as the small owner from Nevada recently shouted at a townhall event, would this not at least partially be resolved by letting 1300 insurance companies compete for her business instead of just 6? Governments can't run operations efficiently because there is no profit motive. There is nothing that makes the government trim the fat, reduce staffing, consolidate paperwork, improve quality.
And if governments provide stiff mandates on what doctors make, be prepared for doctors to leave their field of practice. If you spend 10-12 years educating yourself for one of the most stressful, mentally and emotionally difficult job, you expect to make a good living at it and to be able to make the decisions you need to make to help your patients.
I am all for the government mandating that everyone have health insurance, at the very least catastrophic coverage. I am all for them saying that insurance companies cannot drop someone who has faithfully paid their premiums, gets sick and then is "too expensive" to continue covering. Insurance companies should be held to a moral standard of delivering on their promised contracts. Do I want a government that manages the DMV and the Post Office to manage my health care? (Last time I went to the Post Office, the woman I spoke to was beyond nasty and the time before that where I went to the DMV, same thing.) You want insurance companies to deliver more bang for our bucks, force them to compete across state lines.
Create some simple contract standards (key: NOT 1000 pages of them) so that insurance companies will deliver what they promise.
Maybe we could find a way to help the insurance companies help ourselves. Maybe we could mandate that all doctors clearly post pricing for all procedures performed and insurance companies could promise to lower premiums by X percent if we chose doctors that would save them money for our procedures. Then you can allow consumers some power in saving themselves money and still maintain the insurance companies we have all become accustomed to.
Tort reform is a no brainer. Money given for mistakes needs to be based on real life productivity lost. No more pain and suffering payouts. If you make $30,000 a year and a mistake a doctor made cost you 1 month of work, then you should get $2500 and the cost of your attorney fees. It is still painful for the doctor and a mistake that should be part of a doctor's public record of service but won't cripple the doctor if an honest mistake was made. If you try to sue a doctor on a bogus claim and you lose, then you pay the doctor's legal fees and court fees. Imagine how this would lower the cost of private practice for doctors? There are many alternatives and sound economic principles behind fighting a public option. I just am bewildered that no one takes the time to simply think through it and explain it so the everyday liberal can understand it.