I believe that it is inevitable that America will at some point have a single payer national healthcare system, because it is the only system in the world that keeps cost down and cover everyone in a country. Politicians, both on the left and on the right, will eventually wake up to that fact once they have tried everything else and realize that healthcare is a special case that has only one solution – a single payer national healthcare system.
The private healthcare insurance market will eventually collapse because premiums will continue to skyrocket due to the fact that the nature of healthcare makes it incompatible with the free market. On the other side, ObamaCare will have to be abandoned because it is too complex and it doesn’t achieve lower cost and universal coverage.
Republicans need to take off their ideological blinkers and look at government run healthcare in a logical way, instead of engaging in scare tactics and fear mongering. Medicare, the healthcare system we currently have in the USA for seniors, is a government run healthcare program, isn’t it? And we don’t have hundreds or thousands of seniors clamoring to get off Medicare, do we? In fact, an overwhelming majority of seniors are very happy with the healthcare they get through Medicare. So where are Republicans getting this idea from that government run healthcare is a terrible thing? What exactly is it based on?
Now, having said that, Democrats need to repeal ObamaCare. ObamaCare was a terrible piece of legislation. No legislation should be 2,500 pages long. We need simplicity, not complexity. And we’re seeing the results of the complexity of the Affordable Care Act. No one understands it, no one knew what was in it before they voted for it, and no one foresaw the perverse effects it is having on the economy and the healthcare system.
ObamaCare is fraught with problems, and it will never work. I predict that the entire bill or major parts of it will be repealed in a few years, because in addition to the new problems it will create, it will also not reduce cost or cover everyone. ObamaCare is what you get when bureaucrats working for politicians try to act like they’re so smart and they can fix everything. And it is also the result we get when something is not debated and analyzed, but instead rammed through for political purposes.
My main argument in this article is that, unlike other goods and services, healthcare is a unique service (or commodity if you like), and the free market system will never work to keep costs reasonable and grant access to everyone. I am a firm believer in the free market. I hate big government, and I believe that the free market works wonderfully well most of the time and we should allow it work as much as possible. But as with everything else in the world, there is always an exception, and healthcare is an exception. And here is why:
For the free market to work, two things must be present: Choice, and Competition. But in the case of healthcare, neither of these is present, so the free market is not gonna work.
Let’s take choice. Choice means that you can “shop around” for the lowest price and the best quality. For example, let’s say you need a new television. Number one, it’s not an emergency; you have some time to make a decision. Number two, it’s relatively easy to find out what’s available and how much they cost, because a television is a pretty standard everyday item and you can visit various stores and do a comparison. So you have choice, and eventually you will make a decision and you will have a new television in your house.
Compare that to healthcare. Each test, or diagnosis, or treatment has a specific code, called a CPT code, and there are literally thousands and thousands of CPT codes to represent everything from a cat scan to a cardio gram, to a flu shot, to a quadruple heart bypass operation. For example, the code for a flu shot is 90658, the code for a physical exam is 99214, and so on.
A healthcare consumer will have to become familiar with these codes in order to be able to compare prices from different providers. And this will be an extremely time-consuming and exhausting process which the average person will find very daunting. And it may not even be practical. For example, when a person feels sick and goes to the doctor, he or she doesn’t know what tests will have to be done and what the diagnosis will be. So there is no way of knowing in advance what to shop around for.
Then, once treatment is determined, there may not be time to shop around, like the way you can shop around for a new television. Time may be of the essence, and choice goes out of the window because you have to make a decision right away. But let’s assume that there is some time to shop around. With all the things that a typical family have to do, do we really want to add more stress to people’s lives by having them analyze healthcare costs and options? Do we? I don’t think so.
So, in the final analysis, as a practical matter, choice doesn’t exist in the healthcare market the same way it exists in most other markets. Hence, a major pillar of the free market is missing in healthcare.
With regards to the second important pillar of the free market, which is competition, because of the limited number of providers (meaning doctors and hospitals) in any particular area, competition does not really exist. Right now in the USA doctors and hospitals are overwhelmed; there is no excess capacity. What incentive is there for doctors to compete with one another, or hospitals to compete with one another? When the last have seen an ad on television from a doctor’s office or a hospital, except for specialty services? They already have all the business they need. They have more than they can handle. In other words, there will never be competition in the system, because supply is inelastic, which means there aren’t hospitals and doctors sitting around waiting for work. Contrast that with the market for television. There is Best Buy, Wal-Mart, and numerous other small and medium size stores hungry for business. So it’s a joke to talk about competition in healthcare. It will never happen, because supply is more or less fixed; there is no excess capacity. So the second important pillar of the free market, competition, is missing in healthcare.
So Republicans and free market advocates need to admit that healthcare is a special case, and the free market will never solve the problem of skyrocketing cost because choice and competition simply do not exist in the healthcare sector.
To prove my point, just look at what’s happening in the USA private health insurance market – cost has been rising for the past 20 years way above inflation. The Republicans say that their reforms will bring down cost, so let’s take a look at what they are proposing:
First, they’re proposing private health savings account, and they argue that when people are paying a part of their healthcare costs they will spend their money more wisely, and increase competition and bring down cost. But the problem with this is that the uninsured and poorer Americans don’t have the income to be able to afford setting up health savings account. So that’s a non-starter, and will only work for upper income individuals.
Second, they’re proposing allowing health insurance to be sold across state lines. But purchasing health insurance across state lines will not necessarily reduce premiums, because once people from high cost states start buying from low cost states, premiums will start to rise in those low cost states, and in the end premiums across the USA will then equalize. So for some states it will go down and for others it will go up, which ends up being a wash, and overall premium cost will still remain high. So this will not bring down cost nationally.
Third, they’re proposing medical malpractice reform. This I think is a good idea and will reduce costs but not by a lot. So it should be done, but we shouldn’t rely on it bringing down cost by much.
So neither the Democrats nor the Republicans have solid ideas for bringing down cost and covering all Americans. The only plan that would do that is a single payer national healthcare system. Almost all other industrialized countries in the world have a universal healthcare system and they’re spending half of what we’re spending, and they cover all of their people, and the quality of their healthcare is fine.
The sky will not fall if America adopts a single payer national healthcare system. And I firmly believe that that’s what will happen in the end, because there is no other proven way to keep cost under control and cover everyone in a country. The Republicans have a system in their head, but it doesn’t exist in reality. We should go with what has been proven around the world to work, and stop the abstract arguments back and forth.