Washington’s various schemes for “health care reform” have dominated the news for months now. Everyone seems to think that health care could be done better, but the industry is so complex and so full of outspoken stakeholders that the signal-to-noise ratio of public discourse has become unbearably low. Rather than seek out the facts, I tune out. Just figure something out, okay?
David Goldhill’s September cover story in The Atlantic provided an invigoratingly fresh perspective on the problem. He proposes some really great ideas, but most importantly, he redefines the problem. Here I summarize (sometimes with direct quotes) some of the most salient points from the first half of the article:
Health care does not equal health. With the best of intentions, we accidentally created a “heavily regulated, massively subsidized” health-care system lined with all the wrong economic incentives. “Incentives that emphasize health care over any other aspect of health or well-being. That emphasize treatment over prevention. That disguise true costs. That favor complexity…” Federal spending on health care outstrips education by a factor of 8. How, he asks, does a society determine that $100 billion for health care will make us healthier than, say, $25 billion for better nutrition?
Health insurance is not health care. “How often have you heard a politician say that millions of Americans ‘have no health care,’ when he or she meant they have no health insurance? How has a method of financing health care become synonymous with care itself?” Most forms of insurance are designed to protect the customer from the costs of rare, unanticipated events—like a car crash. But we have become strangely comfortable with the bizarre idea of using health insurance to pay for everyday medical expenses, even when expected long in advance.
Government is not good at managing cost reduction and fostering competition. Existing government plans, such as Medicare, have failed to control costs because they equate costs with prices. “Cost control is a feature of decentralized, competitive markets, not of centralized bureaucracy—a matter of incentives, not mandates.” Ad-hoc price control creates unforseen incentives on the types of services hospitals and clinics want to offer and the fields of practice chosen by young doctors. Furthermore, the strange relationship between insurers and health-care providers creates a muddled system of pricing and discounts which does not work in favor of reducing costs for the patient—because the patient, in our system, is not the consumer.
Americans my age have never known a different system. It’s good to question your assumptions.