Very few will read this article, and most not to the end. It's ironic too, because it's not that I have all the answers, but if congress were to do this level of depth with each other the health care debacle would not have happened. They're elected to take the deep dive on important issues, unfortunately it's gamesmanship first and little or no deep dive at all.
"Long Story Short" - I'll give you my opinion on the bottom line in one paragraph, and if you have severe indigestion, or would like to know more of my basis then read starting at "Short Story Long".
Basically, a single payer system will eliminate competition in health care insurance and as a result doctors, hospitals and medical companies will make less. Bad things result from this: Fewer high quality doctors, lower quality services in hospitals, fewer breakthroughs in drugs and equipment and ultimately higher cost. This is a basic belief of capitalism. If you don't believe that, or if you'd like some details on this then read on!
_____________
"Short Story Long"
So to the question of single payer. I find it helpful to use an analogy that everyone can relate to. So let’s say you live in a town with only two grocery stores. You have to pick one of them to shop, or you’ll be forced to travel maybe 30 minutes longer – which really equates to an hour round trip. The average American is going to be willing to pay slightly more money for groceries locally to avoid the loss of the hour, but if quality or selection is low they will drive the extra hour. Some people lower on the socio economic ladder may trade their time in for the lower grocery prices if it's cheaper out of town, or they might take less quality if they can't afford to travel. The point is that competition will drive each individual to make a choice, and that choice has consequences to each merchant.
"Long Story Short" - I'll give you my opinion on the bottom line in one paragraph, and if you have severe indigestion, or would like to know more of my basis then read starting at "Short Story Long".
Basically, a single payer system will eliminate competition in health care insurance and as a result doctors, hospitals and medical companies will make less. Bad things result from this: Fewer high quality doctors, lower quality services in hospitals, fewer breakthroughs in drugs and equipment and ultimately higher cost. This is a basic belief of capitalism. If you don't believe that, or if you'd like some details on this then read on!
_____________
"Short Story Long"
So to the question of single payer. I find it helpful to use an analogy that everyone can relate to. So let’s say you live in a town with only two grocery stores. You have to pick one of them to shop, or you’ll be forced to travel maybe 30 minutes longer – which really equates to an hour round trip. The average American is going to be willing to pay slightly more money for groceries locally to avoid the loss of the hour, but if quality or selection is low they will drive the extra hour. Some people lower on the socio economic ladder may trade their time in for the lower grocery prices if it's cheaper out of town, or they might take less quality if they can't afford to travel. The point is that competition will drive each individual to make a choice, and that choice has consequences to each merchant.
Let’s start throwing in more variables. Let’s say both local grocery stores are either unsafe, dirty and/or have really unfriendly staff.
That would cause a few more people to make the trip to the out of town stores,
right? Maybe not all, but some. Now let’s
say the owner of one grocery store bought the other one and since he knows he’s
the only game in town he raises prices. All of sudden there’s a substantial number
of people who are fed up. The stores are dirty, not safe, and unfriendly and now
the prices are highway robbery – so a lot more people start shopping out of
town. Meanwhile, over time either those two stores will continue to degrade but operate, or the owners (or new owners) will wise-up and make the changes they need to make, OR some other new grocery store will open to fill the gap in quality, safety and friendliness. That, my friends, is capitalism at its finest!
But what if capitalism were not allowed to correct the problem because congress is lobbied and intervenes? What if congress decided the only way to force the stores to be cleaner, sell quality food and force workers to be friendly were to pass a law setting all the prices for all the grocery stores in the country? Congress surmises that if everyone pays the same for the groceries the quality will even out and all Americans will receive relatively the same level of service.
Well of course setting prices wouldn't force the store to be cleaner, safer and friendlier, right? Quality would surely average down because there is less differentiation between product, price and service. By and large, the ability of a store to charge a higher price enables them to spend money on service and quality, and that will draw more people in the store - at least the people who value service over price.
At this point people are angry! They were willing to
travel because they don’t want to shop in a dirty, unsafe store with unfriendly
workers. The problem is, the out of town grocery stores are now making less money, so they spend less on quality, cleanliness and safety. In the past, competition drove the average overall quality up, yet there were people on the lower end that received less - and that was the basis for demanding government intervention. The problem with that is that the intervention caused lower quality for all, on average - is that a good trade?
Now to tie health care back in. The Doctors are the stores
in this case – and the customers are the same. If some people don’t like the
quality of their local docs they’ll drive the extra mile, right? The two local
docs are charging higher prices because there are no other docs in town and many
people won’t drive the extra miles. The docs are setting their prices on choice,
and supply and demand, just like the grocery stores.
Once again the government passes a law to make it fairer and
creates an insurance system that forces the docs to accept lower compensation
of services. The docs decide they’ll accept the government rate but they’ll
need to raise the prices of their other patients. Pretty soon everyone buys
insurance, but the private/non-government insurers pay the docs more, because
if they didn’t then everyone would use the government insurance, right? At this
stage if a person can afford the private insurance they choose that, because
they’ve noticed there are fewer docs every day taking the government insurance –
or docs put a hard-limit on the number of patients who use government
insurance. That way all their other patients who are privately insured will
make up for the loss. This is the system we have now.
One day though, the government passes a law requiring
everyone to have insurance – and all the private insurers offer government subsidized
policies. After three years they find that this is very expensive, on average,
compared to before the law (this is an undisputed fact), and as a result they
raise premiums on everyone. At this critical juncture one of three
things happen –
- Either the government eliminates all insurers in health care except for themselves, causing the following:
- Pay rates to docs to drastically reduce (think of only Docs receiving only Medicare) – resulting in many, possible most quality students to choose careers other than medicine.
- R&D budgets of medical equipment companies vanish because of no profit to fund it – thereby slashing medical breakthroughs in all pursuits.
- Massive wait time for limited specialist (this is Canada).
- R&D budgets of drug companies vanish, causing advances to all but disappear, just like medical equipment.
- Or eventually the private insurer prices are so high people are forced to not buy it (take the penalty and buy only what they need) – this results in a much lower pool of people to make up the difference effectively killing both the government and private insurance benefits for all. This would either cause the government to mandate higher taxes to fund their underfunded healthcare obligation or they would literally not be able to pay the docs and hospitals. Of course the government could borrow from social security again, but that would take congressional action and that’s not likely in this contemptuous issue, is it?
- Or, the government decides to repeal the mandates and let competition return.
- They might tax the 300 million Americans to pay for health care for the 30 million that can’t afford it (solving the original problem in the first place). Notice I said health care, not insurance. They get a card, they go to a Doc and they receive quality service. They can only get the card by proving they are in need (just like the system today). Of course we already know the cost of providing health care to 30 million people is far less than the cost of all the skyrocketing premiums. So this is the obvious compromise.
- Competition in health insurance without minimum mandates return, quality goes up and prices lower. Remember that people left the system at some critical price point, so the premiums would have to lower to entice them back – or they just stay out.
In summary, competition is almost always the better
answer. Government should only run things when competition can’t safely
serve and protect the consumer.
I’m interested in your comments – I realize this is just my
opinion and others may feel different. If your opinion differs I’d like to know
specifically how it differs, especially in cause and effect. Please though, don’t
provide an example of a small number of people would do this, or that, because
remember we’re talking about 300 million plus people here – keep your scenarios
realistic and we can figure it all out.
As a citizen, I blame the Democrats for forcing such a bad bill. As
a conservative I actually applaud them for trying to improve healthcare for all
– but they get a big F in execution. You actually hear some people say they
blame the republicans for not fixing (the bill). That’s not realistic – you don’t
play trickery with a bill and force your position and then expect the other
side to gleefully help you fix your bad bill. No, in this case that bill should
never have passed. Did the Democratic Party see the result happening in the
future? I seriously doubt it – I don’t think it was a single payer system conspiracy.
Remember, they didn’t even read the bill before they passed it. No, it was all
team politics. PS – I also blame the Republicans for not reaching across the aisle
for healthcare reform before that bad bill showed up. They all need to go, ALL
of them. Term limits will fix this and many other problems. With term limits
they’re more likely to do the right thing, more likely to be statesmen and not
re-elected by special interest dollars. That’s another subject though…
