James Pethokoukis

Politics and policy from inside Washington

Another free-market fix for healthcare

July 20, 2009

I can tell you the pro-Obamacare Washington wonks I chat with are pretty down right now about the chance of “real reform” getting passed. And as the costs and inadequacies of Obamacare become more apparent, I expect to here more ideas like this one by economic analyst Ed Yardeni:

I think that the problem isn’t that health care costs too much. Rather, we provide it too cheaply. Insurance companies should probably charge higher copayments. Medicare simply gives health care services away to senior citizens without any limits on how many times a patient can go to see a doctor or go to the hospital for the same ailment. Some older folks jump from one doctor to another to get multiple opinions. Perhaps keeping electronic records might help to limit the over usage (and abuse) of our health care system. However, the government shouldn’t have access to our medical records.

We should consider a more radical solution to the Medicare problem. Privatize it! I propose that senior citizens should also be required to have coverage under private plans with the federal government reimbursing them for their premium payments. To insure competition, let them rather than the government select their health care insurance providers. It would be up to individuals to choose the best plan for themselves. The government shouldn’t set the premium fees, but let the market do so. The onus of rationing health care services for the elderly and the rest of us should fall on the insurance companies, which is where it belongs. The government shouldn’t be in the business of monitoring, approving, and allocating the health care needs of Americans.

Comments

How to cut healthcare costs? Easy – HBOs, insurance companies and all those other big business parasites in their shiny new office buildings who don’t actually treat patients or provide medicines but who are making billions off
of the health care of American citizens should be eliminated – or taxed at 90% to pay for universal health care for all citizens.

Healthcare in the US is controlled by greedy un-regulated (“free market”) big business profiteers like HBOs and insurance companies who are only interested in making lots of money for their bottom lines and pay-checks and to hell with stupid US consumers.

Posted by w smith | Report as abusive
 

What crap! The free market doesn’t keep any costs down, it increases cost to what the market will bear. The obligation of a company is to increase profits for its’ shareholders. Back when AT&T was regulated, they figured out that the only way to increase profit was to break the company into smaller parts.
To think that anyone with no medical knowledge will be able to determine what health care would be best for themselves is ridiculous. With no experience, anyone would pick the cheapest plan. This could not result in better care, informed procedures, or better general health.
Twenty to fifty percent of health care costs are related to companies overhead. The business model of providing a good service at a reasonable price is left in the last millennium.
Privatization is just another way of saying you don’t have to take any responsibility for any decisions. It just doesn’t make sense for a system that needs to involve every individual, not just the educated, wealthy or otherwise elite.

Posted by Rich G | Report as abusive
 

I respectfully disagree with Rich G. AT&T didn’t decide to break the company into smaller parts, it was broken up for being a monopoly. It is monopolies that destroy free markets. Monopoly capitalism is marked by booms and busts.

I also disagree that free markets don’t keep costs down. They will do that–if the market is truly free. Right now, the health “care” business (more accurately the “health denial industry”) is controlled by two major groups: a handful of insurance companies that make fortunes by denying healthcare, and the AMA, a union that effectually limits the number of physicians available in the market. With limits on where you can get insurance and who provides actual care, there is no free market at all.

But “economic analyst” (I have other descriptions for him) Ed Yardeni provides a total non-solution. Making health care MORE expensive as he proposes and limiting access to health care will result in higher costs (as people put off getting care and end up in far more costly emergency rooms), more illness, less work productivity due to chronic and acute illnesses not receiving treatment, and both more deaths and shorter life spans. One wonders just how much Mr. Yardeni is getting paid by the health denial industry.

Posted by Don | Report as abusive
 

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