Ricardo Alonso-Zaldivar, writing for the Associated Press, has an article on the debate over the appropriate role of government in the health care insurance field. Leading Republicans apparently do not think government should be in the business of competing with health care insurers.
“I’m concerned that if the government steps in, it will eventually push out the private health care plans millions of Americans enjoy today,” Rep. Roy Blunt, R-Mo., said in the Republican weekly radio address.
I wouldn’t go so far as to suggest that the average American “enjoys” his or her health care insurance – even assuming they have some.
I don’t pretend to know what the best health care system would look like. But I’m pretty well convinced that the options I’ve heard from Republicans in the past — usually either nothing or tweaking the market based system — won’t work. The current system is horribly inefficient. We spend close to the most money per capita on health care and don’t get much bang for our buck. Too many people get no health care when their ailments are manageable only to get treated when their symptoms are much more severe at the emergency room which is probably one of the most expensive places to get care. These people get charged a sort of sticker price for the services which is an order of magnitude greater than the prices charged to insurers or Medicare/Medicaid patients. These people pay what they can but the unpaid bills get passed along to the paying customers one way or another. The bureaucracy involved is staggering — the government organizations involved in health care typically require less paperwork than the for-profit insurers, for whom money actually paid for providing health care is thought of as “medical loss.”
So, doing nothing is a pretty bad option. Similarly, the market is not a great tool for pricing and allocating health care resources. Health care services aren’t commodities where pricing comparisons are easy to make. Even if they were, information on health care pricing is closely guarded by health care providers. And, finally, a guy in the middle of cardiac arrest isn’t exactly in a “strong” bargaining position.
The government advantage for insurance is that it can pool a huge amount of risk. Insurance works by taking individually unpredictable risk and making it predictable by pooling the risk in a way that can be calculated statistically. The larger the pool, the more accurate the prediction. People pay premiums into the pool according to their pro rata share of the risk. All insurance involves those who don’t suffer loss subsidizing those who do suffer loss.
It should be interesting to see how those who oppose (additional) government intervention in the health care insurance industry address these issues. There is also this: “Many Americans may not realize the government already picks up nearly half the nation’s $2.4 trillion health care bill, through programs including Medicare and Medicaid.”
Obama has introduced the debate on health care reform with the premise that reforming health care will save us all money,so we need to do it now so it will part of the overall solution for our economic problems.That’s certainly contrary to more conservative type thinking.
Should be an interesting debate for those of us who don’t know the answers in advance and
plan to listen.