Friday, November 1, 2013

Mendacity Means Lying

Here, Charles Krauthammer pretty much tells it like it is.  ObamaCare (a.k.a. the wildly misnamed Patient Protection and Affordable Care Act) will not work.  Nearly everyone, except BHO and his throng, have been telling us why for a long time now.

Now that the really bad stuff about Obama Care is kicking in, EconoBlast predicts that it will not be long before the House and the Senate set about making necessary amendments to the empowering legislation for ObamaCare.  Who knows, BHO might even sign an amended law, if the lay of the land under the current legislation starts exploding in his mendacious face.

Nearly everyone understands that our health care system "as is" isn't free-market capitalism.  Nearly everyone understands and agrees that reforms are highly desirable --- nearly everyone except the healthcare insurance industry, the pharmaceutical industry, and the hospital industry, that is.  These three big, rich, and politically powerful industries all stand to wax fat under ObamaCare.  So don't be surprised when these three big, rich, and powerful lobbies resist amending the PPAACA.

Alternatives for reforming our health care system have always been around.  EconoBlast archives offer several (here, here, here, and here).  When the House and the Senate do get around to amending the PPAACA, which they definitely will, with or without BHO in office, here are some principles that could and should guide their work (but likely will not, given the vested interests and political power of the three big, rich, and powerful lobbies).
  1. Health care insurance should be privately purchased by individuals in a nation-wide market of competing companies.  State borders should be absolutely irrelevant.  Think automobile and homeowners insurance.  We should be seeing commercials on TV about how to save 15% on our health care insurance,  just like we see for autos and homes!
  2. Health care insurance should be  INSURANCE, not pre-paid health care packages.  Insurance protects consumers from high-cost, low-probability events (e.g., events like wanting a heart transplant, treating stage-4 cancers, treating survivors of horrible traffic accidents, and the like).  We do not purchase insurance for changing the oil in our cars, cleaning the exterior of our homes, and the like.  We all expect those expenses to come around,  and we expect to pay for them out of pocket.  We should all expect to pay for routine, ordinary, entirely common health care out of our pockets, too.  After all, we pay for our food that way, unless we qualify for food stamps.  Why should health care be different?
  3. Health care insurance should have nothing to do with where people work.  Individuals could and should purchase health care insurance in a national, competitive market that offers a variety of insurance plans that are suitable for each individual household. 

    Sixty-year old people will no doubt choose a policy that does not cover pregnancy.  People with an unusually high risk of breast cancer will no doubt choose a policy that covers treatment for breast cancer.  Insurance plans simply must carry risk-based premiums.  Anyone who understands the insurance principle and actuarial principles knows that anything else is not and cannot be INSURANCE.

    What about people with preexisting conditions, you say?  Preexisting conditions are a special case, and not a particularly large problem, by the way.  If Americans want to subsidize health care for people who have preexisting conditions, that's fine.  Congress can vote means-tested provisions to do so, if We the People want to elect members of Congress to do that.  But preexisting conditions is certainly no reason to embrace the insanity called ObamaCare.

    What about people who can't afford health care insurance, you say?  If Americans want to subsidize health care for people who "can't afford health care insurance", that's fine, too.  Congress can vote means-tested provisions to do so, if We the People want to elect members of Congress to do that.  After all, most of us do want to help people who truly need our help.  But again, people who cannot afford health care insurance is not a particularly large problem.  And again, that problem is certainly no reason to embrace the insanity called ObamaCare.
  4. We could and should be presented with a price list each and every time we want health care.  When is the last time you looked at the menu of prices in your docs office?  Yea, right.  People who don't have to face a price don't really care what the price is.  We don't buy anything else that we consume without wanting to know the price.  Why is health care supposed to be different?  Can't answer that question?  Neither can I.
  5. The supply side of health care simply must become much more competitive.  Not many people know about or talk about the supply-side restrictions our current health care system has built in. 

    Thousands of well-qualified students, graduates with a BS in an appropriate field, who want to go to medical school should not be turned away each and every year for lack of seats in medical schools, as they are today. 

    Yes, medical doctors are usually very smart people.  But so are people who earn a doctorate in tens of other fields like finance, accounting, engineering, and history.  Seats for training in these tens of other fields are not strictly regulated by Congress.  You get the picture, right?

    People with medical training that does not rise to the level of MD should not be prohibited from administering health care that they are well qualified to provide.  Nurses and nurse practitioners can and should be able to provide health care for many ailments and conditions they are currently barred by law from providing.  Pharmacists could and should be allowed to sell us medications and drugs that they certainly know the purpose and safe use for.  Truth be known, most MDs don't have much knowledge about drugs.  They get what they know from pharmaceutical sales reps.  Well trained pharmacists actually understand the information.

    It's fine for MDs to be certified.  Certification is a good practice.  We all like Consumer Reports, right?  Angie's List is a great idea.  But requiring licensing to practice medicine is just a barrier to entry that gives docs market power to limit competition.  Why should practicing medicine be different from practicing accounting?  CPAs are certified.  We go to a CPA when we think it's in our best interest to do so.  We go to a bookkeeper when we think a bookkeeper is all we need.

    If you want to know why health care is so bloody expensive, look to just two really, really important reasons:   (1) supply-side restrictions, and (2) health care expenses paid for Joe by Sally, with no prior knowledge of what the price will be.
  6. Medications, drugs, and medical technology could and should cost just what it costs to manufacture and market them.  Monopolies on pharmaceuticals and medical technology should be banned.

    What about research, you say?  Let's pay for basic research in pharmaceuticals through our taxes.  Let's let our universities compete for dollars to support such research in competitive bidding through the National Institutes of Health.  Most people don't know that academics in research universities are already the driving force behind advances in health care drugs and technology.  Let's get it out in the open explicitly and sharply reduce the price of drugs.

    People who argue that we won't get advances in health care and drugs without patents just don't understand people very well.  The softwares Open Office and Moodle, both open-source software, are two great examples of people creating and maintaining advanced technology simply because they want to; it's what they do.  No patent necessary.  The same is true for medical research and innovation.  It's just what some people do, and they will do it regardless of patents that raise the price of drugs and health care technology.

    Research has shown that being first to market is important for making money with innovations.  Patents just raise the price to consumers and enrich the patent holder.  Is that really what we want in health care?

Additional details could be offered for Congress to consider to amend the PPAACA.  But the suggestions I offer above would get us a really long way down the road toward  meaningful and important health care reform.  ObamaCare will not.  Each day that passes will make that truth ever-more obvious. 

Go ahead.  Write your member of Congress.  But don't be too surprised when all you get back is a form letter from your member's staff that says your member of Congress thanks you and will certainly take your suggestions into consideration.  Don't be too surprised when none of the sensible suggestions offered above don't find their way into the sure-to-be-amended PPAACA.

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