Thursday, August 27, 2009

Parker Griffith radio interview

U.S. Representative Parker Griffith, whom I've written about before in this space, was recently on WBHP.

I like his positions on the stimulus, bailouts, cap & tax, and healthcare: all no!

I was happy to hear him speak out against the AMA, which many doctors can't do out of fear of losing their licenses. The AMA cartel is a big source of what's wrong with healthcare in America.

He was also correct that the so-called reform proposals are really "overreach" and a "power grab," nothing to do with improving health care. In a 1961 speech, Ronald Reagan warned, "One of the traditional methods of imposing statism or socialism on a people has been by way of medicine."

So far so good. But then he got to his solution.

I understand the poor guy was sleep deprived, but he fell back into the usual feel-good blah-blah-blah about making health insurance companies "play by the same rules." In real life, this will mean more federal oversight, higher prices, less competition, and therefore less consumer satisfaction.

As a physician, he ought to understand the folly of treating the symptom. The real problem is adults still believe in Santa Claus but use the code name "health insurance." Imagine if State Farm were expected to pony up every time you took your car in for an oil change or other routine maintenance. Health insurance is no such thing: it's really a sort of pre-paid entitlement program, but entirely perverse. For example, legislation requires everyone to pay the same premium in employer-sponsored group insurance. This means healthy people are overcharged, and the couch potato gets a free ride. The system subsidizes and therefore encourages poor health!

In the market, sellers compete against sellers, but buyers also compete against buyers. Throwing deep-pocketed "insurers" into the mix inevitably drives prices beyond affordable levels, especially given the way "insurance" destroys patient price-sensitivity.

I like Peter Schiff's proposal much better. Health "insurers" exist only because of aberration in the tax code. This special tax treatment is why open-market consumers can't purchase their products for reasonable prices. Schiff proposes ending this subsidy but simultaneously raising the personal exemption so as to make the change a wash for taxpayers. The true costs of health "insurance" would then be laid bare. The much cheaper option of major-medical policies would become more attractive. Insurers would have to compete with each other on price, terms, service, and so on. We'd no longer be chained to our employer-sponsored plans.

This would create enormous downward pressure on healthcare prices because people would pay for oil changes.. err, routine doctor visits out of pocket from money that they gasp saved in anticipation of such expenses. Of course when the out-of-pocket limit hits, their bona fide insurance would kick in and cover the rest. Economic arbitrage doing its work means that such a system would also benefit those who opt not to purchase insurance policies.

The jingoistic breast-beating about money versus commitment was poor cover for the fact that Uncle Sam is drowning in debt and flat-out broke. The feds can barely afford to pay their bills now. How will they afford a new program that will dwarf Social Security and Medicare?

4 comments:

Anonymous said...

Could you please remove this garbage from Planet Haskell?

(Looking back at your posting history, how did you get picked up by Planet Haskell in the first place, anyway?)

Anonymous said...

The Canadian govt gets very good prices for drugs because it buys in bulk and as a single buyer. Grimey anti-socialist freedom-hating americans flood north in senior citizen buses and buy this medicine from Canadian pharmacies because it is cheaper.

Don't post absolute crap. Please don't. You guys might mess up healthcare, but the rest of the world hasn't.

Americans pay more for less, receive only marginally faster service and literally upsold on tests and surgeries. Upselling on tests and surgeries violates the ethical rules that doctors are meant to follow! You people are economically coercing doctors to act in a manner contrary to their oath.

Anonymous said...

The free market doesn't work for healthcare because the buyer can't shop around and has a real lack of fair information. Even worse, free market pricing does not work in a professional case where the actors (doctors, nurses, techs) are required by their professional guild and by law to operate following a system of ETHICS.

The definiton of free market economics does not include or deal with professionals who are required or should follow ethical guidelines. The free market deals with the rule of law in order to enable trade and ensure that contracts and other agreements work. It hasn't been proven to handle and hasn't been shown to handle the issue of ethical decisions and the application of things like the Hippocratic Oath, which doctors take.

Medicine is different from manufacturing matches or breadmaking. Neither of those sellers or artisans took an ethical oath to do no evil.

Capitalism and the free market simply tries to do no evil by avoiding breaking laws because it is expensive. But we have tonnes of examples where an economic analysis has been made and laws have been broken.

So do we trust this overly economic and rational with system with an ethical system? No, we can't. Economic situations should not cause lapses in ethics, and that's what already happens in the US and already happens with non-covered surgeries in Europe and Canada. When health becomes commodified the pushers, the doctors become less professional and start pushing their economic interest rather than handling the ethical violation they are creating.

Medicine is about ethics and the free market doesn't deal with ethics. If you need the free market to deal with ethics then you need insane laws with absolutely crazy dis-incentives for violating ethics. But if we do that, the libertarians will call it over regulation.

Unknown said...

Greg - I can't help but notice that these negative comments were posted anonymously. I think that speaks volumes.

Anyway, I always appreciate your thoughts. When you get ready to run for office, I want to work on your campaign. Seriously. We need people like you in office, whether it's in Montgomery or Washington.

- jason cole