Friday, March 30, 2012

If Obamacare is Overthrown

If the Supreme Court tosses out Obamacare, the United States may have a unique opportunity to think about a framework for a rational health care industry.

The framework should begin with the free market. The guiding principle should be that individuals pay for their own health care. Without that guiding principle, health care provision will always be too expensive, inadequate for many, and absurdly inefficient. Check out the health care programs in Europe. None of them are any good because they all have too much government involvement.

Let us all admit that the free market isn't perfect. No question about it. The free market provision of health care will inevitably end up with situations that none of us like. No denying that.

But all policy decisions are a question of choosing among alternatives. No solution is perfect and government solutions almost always tend to be the worst available. Should the government really be delivering the mail?

We now have a completely absurd healthcare system. Hospitals are required, through the blunt instrument of denial of federal dollars, to provide health care to anyone who walks through the door. This absurd arrangement is a recent phenomenon. It wasn't always this way. There once was a time (pre-1960) that one had to prove that you could financially foot the bill before a hospital had to serve you. That concept worked.

To deal with folks who couldn't pay their way into a hospital, the US was dotted across the country in every locale with charity hospitals who took care of folks who couldn't pay their bills. There is no reasonable size county in the US that did not have such a charity hospital. This system worked and worked well.

But, the adoption in the mid 1960s of medicare-medicaid, spelled doom to the concept that hospitals could deny services to people that could not pay. In effect, the government took over the private hospital industry, by threatening the denial of federal funds connected to medicare and medicaid.

Now, it is automatically assumed that anyone has free and unfettered access to a hospital at any time they want simply by finding their way into an emergency room, whether they can pay or not. Meanwhile, charity hospitals no longer exist. Who needs them when every hospital becomes a charity hospital?

So, now we have a health care system that no one pays for (out of their own pocket). Any product that no one thinks they are paying for will find that it's price will increase without limit. Eventually, unchecked, the present health care system of providing free care for everyone will mean that all of society's resources will be consumed by the health care activities.

So, what to do? A return to a free market health care system is the answer. Individuals should pay for their own health care and should be denied access to health care in private hospitals unless they can pay for that health care. If the government wishes to get into the act, then the government should build charity hospitals and administer a separate system for folks who can't afford to pay, which would be a very, very small part of the population.

The market for catastrophic (in the sense of costs) care can be handled by the insurance market. Here is one place where state regulation of insurance should be abandoned in favor of a streamlined federal regulation that focuses only on "truth in packaging." The government should not dictate what insurance plans should be offered but should merely make certain that individuals are told straight up what the insurance plans offer and make certain that insurance companies deliver on the plans they sell to the public. In the case of pre-existing conditions, the government could subsidize some catastrophic plans if the citizenry deems that to be a good idea. But, individuals with heavy health care costs should shoulder much of the cost. No one should skate through the system paying little or nothing.

Those who fall through the cracks should become the wards of government-sponsored charity hospitals. No doubt, health care will not be as good in such places, but health care in such places will likely be far better than what governments provide currently in Europe.

There is no good definition of health care. I would not include provision of contraception as part of my definition of necessary health care, but it is clear that the Obama Adminstration does include such things. Let individuals make their own definition. The government is not omniscient. Citizens don't agree on what constitutes adequate health care.

One thing for sure: Americans don't like Obamacare. Even today, two years after passage, 57% of Americans favor repeal of Obamacare. That's pretty amazing.

Americans have traditionally believed in private responsibility and charity towards all. A free market in health care and a free market in health insurance, supplemented with charity hospitals for the indigent, is what the US needs, not federally dictated programs that deny citizens the right to choose the health care products and programs they desire.

No comments: