An Expanded Perspective On Health Care – We Can Do Better

Health care issues are not accurately presented to the public – thereby clouding an understanding of something critical that affects the lives of all Americans. It is necessary to expand our thinking to achieve the most important result: a reduction in the cost of providing health care services.

This lack of understanding of possible changes affecting health care is unfortunate. It is particularly unsettling for the well-being of the populous at this time because the congress is currently considering changing (or repealing) the Affordable Care Act, and reducing the funding of Medicaid. The public needs to understand how this will affect their lives, and question why there is no consideration for reducing the cost of providing health care.

There are several federal programs whose objective is to prevent financial ruin. These are: Medicare, Medicaid, CHIP, Marketplace subsidies, and Insurance plans provided by employers (which is a tax exempt benefit to employees).

These programs do not consider the cost of providing health care (with very minor exceptions). The results are political differences over who pays for the service. This is counterproductive because an overriding issue is how can we reduce the cost of providing medical care?

First, consider the debate over who pays for health care services.

A cost benefit analysis is the first step to a meaningful evaluation of who pays. As an example – a person can get an inexpensive insurance plan, but if the person has a non-covered illness or injury the emergency room provider absorbs the cost. And eventually the public pays the cost through increased taxes and/or increased premiums.

There also needs to be moral/ethical considerations. How do we define our country? Do we believe that health care is a right or a privilege? This is a conversation that needs to be resolved to provide stability. Health care is too important to be affected every time there is a change in leadership in the country. The need is to create a plan for the long term – based on our values.

Who pays is significant.

But equally important is controlling the escalating cost of providing medical services. Economists have known for a long time that the free market does not exist for health care providers and services. For example: In the 1960’s, economic classes at the University of Chicago used medical costs as the “textbook” example of a monopoly. The only thing that has changed is, over time: it has become more so.

If our legislators, at both the national and state level, are sincere in their commitment to providing health care that the average person can afford, they need to set aside their ideological beliefs. Instead focus on solutions. Only then can the results be substantive.

For the short term there needs to be a policy of coverage for as many people as reasonable – based on a foundation of cost benefit and moral/ethical considerations.

For the longer term, the fundamental cost of delivering health care must be addressed.

Many of the cost drivers affecting delivery of medical services are known and have been best documented by Elizabeth Rosenthal in her book – “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back”.

Her rules describe it better than anything else.
“ECONOMICAL RULES OF THE DYSFUNCTIONAL MEDICAL MARKET

  1. More treatment is always better. Default to the most expensive option.
  2. A lifetime of treatment is preferable to a cure.
  3. Amenities and marketing matter more than good care.
  4. As technologies age, prices can rise rather than fall.
  5. There is no free choice. Patients are stuck. And they’re stuck buying American.
  6. More competitors vying for business doesn’t mean better prices: it can drive prices up, not down.
  7. Economics of scale don’t translate to lower prices. With their market power, big providers can simply demand more.
  8. There is no such thing as a fixed price for a procedure or test. And the uninsured pay the highest prices of all.
  9. There are no standards for billing. There’s money to be made in billing for anything and everything.
  10. Prices will rise to whatever the market will bear.”

Source: “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back,” – Elizabeth Rosenthal – CLICK HERE


These rules provide an understanding of why medical services are so expensive. There is evidence in support of these rules whenever a service is provided, or a prescription drug purchased.

As with most problems: a clear definition is an important step in solving the problem.

Where to start? The legislatures at both the federal and state level need to conduct comprehensive, non-partisan, fact-finding hearings. There is a fundamental need to get the ideas on the table and develop real solutions. With the impact of the aging population there is no other acceptable alternative.

 

 

 

 

Ed Shackelford – REALTOR®
Real Living CO Properties – edshackelford.com
President: Colorado Senior Lobby
Email: President@coloradoseniorlobby.org
Phone: 303-832-4535