Published in newspapers across Indiana– for example, here and here in the (Jeffersonville/New Albany) News-Tribune

Excerpts from essay #1:

…We also hear assertions that various forms of government involvement in health care are likely to be effective in the U.S. because they work well in other countries. Aside from whether this is true, it should be noted that these other countries have lower populations and, typically, far less diversity in their populations. So these comparisons are somewhere between somewhat helpful and useless. One of the ironies of the health-care debate is that such comparisons should encourage us to consider state-based reforms (instead of a single, grand federal experiment), since the population and diversity of our states is similar to other countries.

A second myth is far more important: We’re often told that our current health-care system is “free-market.” This is akin to blaming the Great Depression on markets — while ignoring the four tax increases of Hoover and FDR, massive trade protectionism, restrictive monetary policy, laws that artificially increased prices and wages and so on. In both cases, the extent to which we should blame the government is an open question. But ignoring its role in either mess is neither legitimate nor useful.

With health care, there is already massive government intervention. The most obvious example is the double debut of Medicare and Medicaid in the 1960s. In addition, there is a wide array of relatively minor but still significant issues: various labor market restrictions (e.g., you and I are not allowed to receive medical services from professionals who provide the same services to our armed forces), mandated insurance benefits (for everything from in-vitro fertilization to hair transplants), the explosion of medical malpractice awards (and thus, malpractice insurance rates) and so on.

But the most important public policy in this realm? The subsidy of health insurance acquired by workers through the firm….

Excerpts from essay #2:

The current mix of government and markets in health care certainly has an amazing amount of inefficiency. But will bureaucracy and red tape be reduced or enhanced with more government?

It’s difficult to imagine much if any gain. Thus, extending health-care availability will probably involve higher costs or reduced access in other contexts (rationing)….

Barack Obama’s proposal is to subsidize public insurance that would “compete” with private insurance. By definition, subsidized insurance would undermine private insurance to some extent — somewhere between attracting people at the margin and entirely destroying the industry. It would depend on the extent of the subsidy….

One last thought: It’s interesting that we’ve become so fixated on a federal approach to this problem. Why not allow the 50 states to try 50 different experiments rather than betting everything on one grand, federal experiment that would be difficult if not impossible to reverse?

  • Roger McKinney

    The three main drivers of medical costs, and hence the reason so many people are uninsured, are the AMA, CMS and poor hospital management.

    The AMA acts as a GSE, goverment sponsored entity, like Fanny and Freddie. It controls the supplied of doctors, keeping the supply low so that doctors earn as much as possible (primary care physicians earn an average of $170,000 per year). At the same time, it drives up the cost of medical school.

    CMS (Center for Medicare and Medicaid) supplies a virtually unlimited demand while setting the bottom level of costs on all procedures, because federal law prohibits any institution from charging any other customer less than it charges CMS.

    Hospitals drive up medical costs by maintaining excess capacity in rooms, staff and expensive diagnostic equipment, the cost of which is spread over the total room charges.

    You’re right, we don’t have a free market in health care. A true free makret in healthcare would be the best solution, but the current system is so bad that pure socialism would be a major improvement.

  • http://www.thefaxreport.com Nick B

    It’s intersting that no one wants to recognize that despite being underfunded Medicare & Medicade run rather smoothly. Without these programs many of the soon to be retired would have no insurance at today’s crazy costs. Also a state by state soludion is what we have now and is not working. Why can I get health insurance for a family of four in NY for about $800 a month but in NJ the same policy would cost almost $1,500!

    Technology
    The overall lack of standardized technology is also killing our systems. We live in one of the most technolgy driven countries on the planet yet we don’t have mandated common technologies across our health care system that could help dramatically drive down costs.

    Nick
    http://www.thefaxreport.com

  • http://www.healthinlife.com Roger McKinney

    The three main drivers of medical costs, and hence the reason so many people are uninsured, are the AMA, CMS and poor hospital management.

    The AMA acts as a GSE, goverment sponsored entity, like Fanny and Freddie. It controls the supplied of doctors, keeping the supply low so that doctors earn as much as possible (primary care physicians earn an average of $170,000 per year). At the same time, it drives up the cost of medical school.

    CMS (Center for Medicare and Medicaid) supplies a virtually unlimited demand while setting the bottom level of costs on all procedures, because federal law prohibits any institution from charging any other customer less than it charges CMS.

    Hospitals drive up medical costs by maintaining excess capacity in rooms, staff and expensive diagnostic equipment, the cost of which is spread over the total room charges.

    You’re right, we don’t have a free market in health care. A true free makret in healthcare would be the best solution, but the current system is so bad that pure socialism would be a major improvement.
    Sorry… forgot to say great post – can’t wait to read your next one!