True Healthcare Reform

If you think that our government is not pushing for a single payer system like they have in Canada and the United Kingdom, you need to watch the video posted below this article.

There are two resons that businesses exist. First they serve a need within the community, and secondly they provide income for the employees and owners of the business. Even Not for Profit busiensses like charities still meet these two requirments. When the government starts dictating profit levels within any business, it is distorting the market, not controlling it!

The free market system is the system that can most efficiently allocate resources within any market. Profit is a noble and legitimate desire for any business. In order to maximize profits a company allocates its resources as the market dictates. When the government inserts itself into business and dictates executive pay, a doctors pay, a clinic or hospitals fees, or which services should be rendered, it is distorting the entire market.

The best thing that government can do is to get out of the way! The market can do a much better job of regulating industries and busiensses. To understand this consider that if business 'A' and business 'B' both sell widgets. Company 'A' is gouging its customers while company 'B' treats its customers well. Word gets around and eventually people stop patronizing company 'A'. Company A will either fold or change its behavior, either way the market has regulated itself. That's right, governments do not regulate, markets do! Governments merely interfere with and distort markets. Treating customers poorly or gouging them is counter intuitive to good business practices. When the government over-regulates any particular industry, it sets the stage for all companies to treat customers poorly (usually by unintended consequences) which distorts the entire market. Any monopolistic approach, either through lack of competition or by overzealous governmental regulation (no matter how well intentioned) results in severe market distortion.

Market distortion is a hallmark of dictatorships, and regimes that are socialistic or communistic. It is not the idea that the United States was founded upon. Understanding this concept is key to understanding why the single payer health care system that our government wants to institute is a really bad idea. It will set the stage for rampant abuse, fraud, and very poor outcomes for consumers. It is very desirable for doctors, hospitals and clinics to make a profit for their services, because it is secondary to providing good services for consumers. No doctors get up in the morning thinking about how to make money that day! They are thinking about producing the very best outcomes for the patients that they will serve.

Why some services cost so very much is precisely because of market distortion. Market distortion in this case comes from governments lack of regulation in another industry. Lack of regulating tort-awards. Frivolous lawsuits with outrageous awards have driven up malpractice insurance costs, which impacts the costs for insurers and consumers. John Stossel did a report for the acclaimed television show 20/20 several years ago that chronicled how some doctors were driven out of the states that they were practicing in because of how expensive malpractice insurance was. This was producing a severe shortage of general practitioners and several specialists (like gynecologists) in those areas.

Now the Federal Government wants to shoot a mouse with an elephant gun by doing a complete takeover of the entire health care system! rather than just addressing the issues that they have created, they presume to "fix" the entire system! That is just ludicrous!

The best way for them to actually help in this instance would be first to implement true tort reform. Secondly allow doctors and hospitals to purchase malpractice insurance across state lines. Thirdly, change the way that HSA'a are administered by allowing pre-tax dollars that are put into them to roll over from year to year instead of forfeiting what is leftover in them at the end of the year. And allowing a 7% or $14,000 (whichever is more) employee contribution. Also encourage employers to contribute towards individual employees HSA's with a tax incentive as well. Treat unused HSA funds as a retirement supplement for employees (tax defered until death). Fourth, route out the existing fraud, waste and abuse within the Medicare and Medicaid systems. Fifth, scrap the Veterans Administration and allow our heros to participate in the best medical system in the world; the existing health care system! Better outcomes, less paperwork, less waste and fraud comes from free markets. Sixth, stop allowing illegal immigrants and convicted fellons access to our system and paying for the services that they consume! Bill the country of origin, or the families for God's sake! stop leaving the taxpayers holding the bag. Seventh and finally, cover the true number of uninsured and underinsured with tax incentives.

Notice that none of the seven real ways to actually "fix" the problems with our health care system today include a complete takeover of the system by a government run single payer plan. None of those seven fixes would distort the market either. And all seven of them combined would not cost anywhere near the outrageous money that they are want to squander now!