I think the intentions of the progressive politicians are good enough. Medical care, at least in this modern era, has become an important basic commodity, almost up there with food and shelter. In wealthy societies such as ours people shouldn't go without it, both for humanitarian and social reasons. It's a big leap from that concept to the idea that everyone should pool their funds into some central authority who is in charge of distributing them out where needed. For the past 50 years we have tried out that system generally and with a real vengeance in Medicare and Medicaid and more recently with Obamacare. We were talked into going with the government instead of the private market and sure enough what we are getting is the Department of Motor Vehicles instead of Amazon.com.
With the deducted payroll tax in every paycheck you are investing in a failing system that long ago would have gone out of business if it were in the private sector. But worse than that you are being robbed of what you are paying for. You are being deprived of the full time and attention of your doctor, paying grossly inflated prices, and coping with a system in which you need layers of permission for even the smallest service. And the efficiencies of modern communication which has been revolutionizing commerce since the first PC was introduced in 1980 has completely passed you by. What you are now getting stuck with is a UNIVAC mainframe instead of an iPhone. Those computers your doctor now types away on are not a sign that medical care is modernizing. They are just data entry terminals for big government and its ever increasing control.
A big part of the problem is price fixing. Medicare fixes the price of every medical service right down to drawing a tube of blood. The insurance companies generally base their prices on the Medicare price schedule. Price fixing eliminates the competitive forces in the market that incentivize producers to figure out ways to get customers by doing things cheaper and better. Back in 1975 the Supreme Court said that local medical societies couldn't fix doctor fees for this very reason but Medicare is doing it again. So without competition medical prices are way too high, probably in general 2-10 times higher than they would be in a competitive system.
But that's not all. A second big problem is third party payment. We really do pay for everything through our taxes and premiums but the way we've worked it out is that the uncompetitive high prices don't really bother us until we're faced with the copays and deductibles. But they really do bother the payers. For the insurance companies every service you use is a liability so they put as many barriers in the way as they can get away with. The government payers rely less on barriers and more on regulations which so far haven't worked at all but they have the fallback position of borrowing and debt accumulation. How crazy is it that systems that were intended to make medical care easier to get are doing the reverse.
So getting medical prices down and getting buyer choice back in the system is what is needed, not more insurance. How to get there from where we are now without causing major disruption is a real problem. But now for the first time in my long involvement with the medical system we have a chance.
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