The basic problem is that the American people have gotten used to high-tech, all-everything health care, under the illusion that they don’t have to pay for it and that it’s always better for them. Politicians are unwilling to force voters and donors to give up that sort of system, even the parts that are ineffective.
Sorta kinda close. But not quite.
The “basic problem” of health care costs is that the consumer is not the customer. The consumer’s employer, or the government, is the customer. Our current private system, a “temporary” and “emergency” schizophrenic tax scheme dating back to World War II, has created a foggy maze in which the consumer simply cannot make informed decisions — because the information required to make those decisions is muddled, obfuscated or downright withheld from them.
Under such a system (which, incidentally, is also the proximate cause of our inflated “number of uninsured” statistics), is it any wonder that, as Brooks puts it, “the American people have gotten used to high-tech, all-everything health care, under the illusion that they don’t have to pay for it”?
But where Brooks falls short is the innuendo that the “illusion” is somehow the American people’s fault. It is not. It is the result of a 60-year government policy of disrupting and complicating what really should be a very simple business.
No health care socialist I’m familiar with is willing even to acknowledge, let alone attempt to answer, this very simple question: Why do we have these cost-driven problems in health insurance — and only in health insurance?
There is no inflation crisis in automobile insurance, or homeowners insurance, or life insurance. Other insurance industries may be regulated (that’s another blogpost), but they are still basically private. The consumer is also the customer — and the providers compete for their business — directly and fiercely (how long can you go before seeing a car insurance commercial on television?).
If we were to scrap the absurd system of making health insurance tax-advantaged for employers but not employees (i.e., either tax it all equally, or exempt it all equally), then employers would exit the “health insurance middleman” business (which, incidentally, would lower their human resources cost — which in turn means higher wages, lower prices and higher profits). Employees, armed with larger paychecks and smaller benefits packages, would become not only the consumer but also the customer — and would be directly courted by the health insurers. And the same kind of intense price and service competition that we see in the “GEICO v. Allstate v. Progressive” wars would also take place in health insurance.
To a health care socialist, the only viable response to this proposal is, “Oh the horror!”
There’s more to the story, of course: Medicare, ER open-door rules, legacy costs of existing programs and other entanglements would also have to be addressed. Point conceded.
But the core debate will continue to be futile, “angels on the head of a pin” parlor room (and committee chamber) chit-chat unless and until the root cause of the “basic problem” — the entirely artificial and entirely unnecessary government-spawned dichotomy between “consumer” and “customer” that underlies our failing health care leviathan — is at least on the agenda, if not at the top of it.
If the first step is admitting you have a problem, then surely the second step is figuring out what the problem actually is. Especially the “basic” problem.
Previously:
–Socialized Medicine Archive
6 responses so far ↓
Link Ian // Jul 10, 2009 at 10:57 am
It's easy to see the influence of government meddling in another insurance arena. Check homeowners options in the hurricane belt these days.
Link Chris Collins // Jul 10, 2009 at 12:27 pm
I agree with you. This is not the first time I heard this argument. You are also forgetting about the fiasco known as 'malpractice', whose beneficiaries are not the 'innocent victims', but are the trial lawyers who make a name for themselves on these and similar cases. Yes, there are legitimate errors and wrong-doings in the medical field. But, do they justify the cost put on the medical profession, often passed to customers and consumers of medical care?
Link Windypundit // Jul 10, 2009 at 1:54 pm
Not that I love the current system, but one big advantage of employer-based health insurance is that it makes the groups large enough to keep the adverse selection problem under control. I'm not sure what you'd do about that. A system of individual insurance also has to solve the problem of how people with pre-existing conditions can shop for insurance. You need some way for the old insurance company to pay the new insurance company to take over coverage.
Link Mark Thompson // Jul 17, 2009 at 6:45 pm
This point can't be made enough. I, personally, am getting to the point where I sound like a broken record on it. Yet, I've yet to hear it mentioned even once in the higher levels of discussion about health care. Liberals tend to ignore it because ultimately they are focused on getting some kind of single-payer system, thinking that what distinguishes the US health care industry is that we have a higher percentage of private insurance. Conservatives ignore it because, for some reason, they seem insistent on pretending like the current system is all fine and dandy.
In fact, of course, there are a huge variety of health care systems, ranging from almost entirely public to almost entirely private, with the vast majority (including the US) falling somewhere in the middle. What makes our system unique isn't the degree of privatization; it's that to the extent it is private, it is employer-based such that the consumer and the customer are two different entities.
Link A Realistic Health Care Alternative Going Nowhere | The League of Ordinary Gentlemen // Jul 21, 2009 at 4:18 pm
[...] occasions and as our friend Kip recently pointed out, the employer-based system ensures that the consumer and the customer are two very different entities with two very different sets of interests. Meanwhile, the leading proposal adds ever-more [...]
Link willybobo // Jul 21, 2009 at 4:49 pm
This is a useful insight. Indeed, other products where the consumer is not the customer, such as enterprise software and newspapers, also tend to have costs run out of control and provide inferior benefits.
However, I'm not sure the comparison between health insurance and life insurance and auto insurance, etc. is apt. That's because health "insurance" isn't really insurance in the same way. It's a health care plan. If auto insurance had to pay for engine upgrades any time they might improve the performance of your car, or new speakers when your sound system started to sound less rich, you might have similar problems with cost as you do in health care.