Chris Rahe: Single payer health care

Chris Rahe, writing a column in the South Bend Tribune, opines that Gov. Daniels health care proposal doesn’t go far enough. Daniels has suggested increasing taxes on cigarettes to pay for insuring those who can’t afford it but who do not qualify for Medicaid. Rahe says band-aids and babysteps are simply too little, too late for the health care disaster we face today. We need to admit the system we have now is just flat broken.

Rahe suggests a single-payer system where the government essentially acts as an insurer, but the health care providers remain private actors, not government employees. While single-payer might be the answer, I don’t really buy the spin that this is essentially still the free-market. If you have only one source of money, that source wields a tremendous amount of power. Of course, our current health care system bears little resemblance to the free market.

Let’s say you have a cough, a fever, debilitating headaches, and a little numbness in your left hand. How much is it going to cost you to get that fixed? Go ahead, try calling around and trying to get a price. Not going to happen. First of all, they don’t know what’s actually wrong with you until you’re in the shop. By then, you have sunk costs and an incentive not to go shopping elsewhere. And that completely skips the fact that prices are all over the board depending on who the customer is. Medicaid gets one price, Medicare gets a second price, Insurance Company “A” gets yet another price, and the uninsured get the full sticker price.

So, anyway, the single-payer solution, may not exactly be market capitalism; but what we have now isn’t either. Rahe suggests that we pay for universal healthcare already, we just aren’t getting it. As Mike Sylvester pointed out last month, the United States pays the highest percentage of GDP on healthcare. The free market aside, Joe Flower pointed out 8 conservative, good-for-business reasons for a single payer healthcare system. (Short version: 1. Transaction costs; 2. Employer funding; 3. The basic idea of insurance; 4. Value; 5. Risk cost of receivables; 6. Service quality; 7. Efficiency; 8. Patriotism.)

And, anectdotally, I have learned that our current system has an adverse effect on the free market in non-healthcare areas. I was speaking with a woman this morning who recently left her former employer, in large part, because the new employer could offer her health insurance. Once she was able to secure insurance, her husband was finally free to start his own business for which he had long been qualified and long had a potential client base. He had just been unwilling to risk becoming an entrepreneur solely because of fear about obtaining adequate health insurance. I don’t imagine this sort of thing is uncommon.