There's yet a another disquieting editorial in today's Times on the runaway costs of US healthcare. In Less Than $26 Billion? Don’t Bother, Dr Ezekial Emanuel runs down the list of commonly-cited cures, to America's escalating health costs, carefully pointing out that few of them actually make a dent. Sadly, Dr Emanuel's column seems to have done little more than touch off a fire storm of `it's all those greedy insurance companies' fault' kinds of comments. These rants come, I'm sure, from many of the same OWS folks that lay all the blame for their troubles upon greedy bankers: i.e., for pandering to us innocent consumers' inclination to over-consume more debt than we should have rationally expected to service. Why shouldn't the rest of us (a.k.a., the government) pay off all of our loans they ask? `no self-interest or "greed" in that.
Without descending into the depths of Adam Smith logic (that readers nor the writer of this posts cares to wade), let me just say this about insurance companies: IMHO they're no more nor less greedy than any other capitalist (and/or the rest of us for that matter). To the extent to which health Plans are inadequately responsive to competitive market forces, perhaps more/better Regulation should be considered (see yesterday's post). But, to suggest that a "single payor/national health plan" would, somehow, make the whole system suddenly more efficient, turns a blind eye to centuries' worth of market experience. Public vs private sector production paints a painfully-clear picture world-wide (think 20th century agriculture in Russia and China; better still, public housing health and education in America!). The inarguable reality is that free markets, in the final analysis, simply do a far better job managing resources and services delivery than governments--irregular regulatory aberrations notwithstanding.
I'm sure that the arguments will nonetheless persist: Why can't all those health insurance execs' salaries and shareholders' profits be turned upon care for the needy?; and, How is that Socialized medicine in other countries seems to deliver better results at lower costs? These and other good questions require more space to answer than this post permits. Suffice it say that answers to questions like these also require a little more basic Economics sense and intellectual honestly than many are willing to lend.
The short answers to the two example questions above, however, are these: good Management has costs, and the best management entails proportionate rewards. Given the size of our national health expenses, we spend considerably less managing the complex value chains involved here than in most other industries. Contentions that government (e.g., Medicare/Medicaid) does it better are highly ingenuous at best: government agencies take a free ride on private plan mgmt—i.e.,in simply discounting the costs that are arduously managed in the private payor space. And, costs are less in Socialist countries simply because there's not as much healthcare consumed in them!
Another post could poke into why—why/how other developed countries maintain better health with less healthcare—but the central point that I want to make today is somewhat different. It's this: the ticking US healthcare time-bomb cannot and will not be defused on the supply side: almost every element in the value chain there (aggravated by most all new technology coming down the pike) contribute to more, not less, per-capita costs looking forward! The ONLY promising place to look, therefore, is on the demand side: i.e., what set of circumstances will cause Americans to consume less healthcare (better still, to become more healthy)? Think about it. Given our unique culture, are Americans likely to be more content having government ration care than insurance companies? Indeed, political forces will mitigate in the opposite direction (government "death panels" are even less palatable than private cost "capitation" policies)! Thus, all other things being equal, an Uncle Sam as the "single payor" will find himself forced to bend net expenditures in the wrong direction.
So, I'll close for now with the same question: What scenarios are most likely to induce Americans at large to assume more direct responsibility for, and more sober judgment applied to, decisions concerning their own health (cum healthcare consumption costs)?
