How to Fix Healthcare
In March of 2006, I had to shell out $3000 to not die. I’m still sore about it, and I’m sure there are millions of people in this country who have worn even worse fitting shoes.
There’s no mistaking the problem of healthcare costs in America. While a mere 5% of the average income in 1960 was spent on medical care, it is estimated that Americans spend 16.5% of their income on it today. It’s not surprising that we’ve grown to tolerate it — dying is bad, after all. But how did we get into such a situation in the first place?
A study at MIT in 2006 suggests that the issue can be traced back to health insurance providers. It makes sense — It’s easy to imagine that a person is more likely to opt for an expensive procedure if someone else is paying for most of it. So the healthcare industry always has an incentive to create new technology and charge a premium for it, because they know that they can count on the country’s broken medical care system to foot the bill.
A frequently suggested and debated solution is Universal Healthcare, and while I agree that we do need to take care of everybody, what we do not need is higher taxes and a bigger federal government to manage the paperwork.
But perhaps as a temporary step in a long-term solution, it could work.
Imagine this: The federal government establishes a Universal Healthcare program, instantly making all medical care free for all legal citizens, but sets the program up under one important stipulation: It will only pay 90% of what the medical institutions are charging. The industry has to absorb the rest, without passing any financial burden on to the patients.
In order to compensate, the medical industry, over the next couple of years, cuts a few non-vital jobs, streamlines some of the more cumbersome processes and procedures, and learns to live with slightly less egregious markups on pharmaceuticals.
Then, the government tells the medical industry that it will now pay even less than it already is. Again, the industry is forced to absorb the loss of revenue by streamlining and cutting costs.
Repeat for about a generation. As the cycle of strongarming the medical industrial complex into lower costs continues, the cost of maintaining the Universal Healthcare program decreases, and the tax burden placed on citizens to fund it decreases in turn. Once this tax burden reaches a point where it’s equivalent to what people are likely to spend on medical care in the first place, drop the program entirely.
The biggest flaw that I see in this is the end result, in which we return to a system whereby sick people are stuck paying more money for medical care than healthy people, which I don’t think is particularly fair. Going back to my own case, I didn’t get appendicitis through any fault of my own. I’m in relatively good cardiovascular shape, I eat healthy, and I don’t do drugs. I just ran into a spot of rotten luck. And I had it easy! Far worse off are the elderly, accident victims, and parents of children with major medical problems.
Would the insurance companies step in and make the whole thing start over again?
Maybe keeping the Universal Healthcare plan in place in the end would be the only safe solution after all. What do you think?