socialized medicine vs private insurance

In the debate over socializing health care, there are two fairly credible arguments from my point of view.

One is that this is the US of A and we can do anything, therefore, we can produce a workable government run health care system even though no other country in the world has.

The problem with this argument is that even in this country, you can’t repeal the basic laws of human nature. In this case there is and can be no free lunch. Utopia cannot be achieved where men (and women) are involved. I appreciate this line of thought, but think that it doesn’t mesh with reality.

The other is that our current system is out of control, insurance companies make arbitrary decisions on individual’s health care, and a government run system would be no different; just more efficient. The people making this argument suggest that government can run the system for 3% when the insurance companies get 30%.

This line of thinking takes more deconstructing.

In the short run, I suspect that the proponents of socialized medicine would be proven right. That we, as individuals, wouldn’t notice much of a difference between what we have now and what a socialized system would provide. After all, most people who have insurance just go when they want and rarely ever pay what it really costs to see a doctor. A socialized system would be much the same, initially.

But what would happen when the government finds out that it costs more than they thought? And by the way, this always happens with everything that the government gets involved with. Medicare was supposed to cost $15 billion in year 25, but it ended up exceeding $100 billion.

Soon enough, the government would have to find a way to reduce the cost of the system. They can do it in two ways:
1. Lower the reimbursement rates paid to doctors, pharmacists and other health care providers. This is most likely as it’s what states already do every time there is a budget pinch; just ask the docs and pharmacists in Colorado about reimbursement rates.
2. Reduce the number of services offered to patients. Want cancer treatment for liver cancer – too bad the probability of success is too low we won’t cover it.

Either of these options produces the same results for you and me. We will eventually find ourselves searching for a doctor that will see us or we will be searching for a provider that has set up shop outside of the government system, either here or in another country. This is the experience in Canada and the UK. We’re fools to think it will be different here.

People really want our existing system reformed, but they know that what the Democrats are offering isn’t reform. It’s more of the same, but worse.

If we have to choose between the public option and what we have now, status quo is better, not the best, but better.

What we really need is to introduce true market principles into this area.
1. catastrophic coverage only, with a cap
2. multiple state purchase options for consumers of insurance
3. some more tort reform
4. immigration reform – too many free-loaders

Basically copy what works well in the auto and life insurance models. Both are much more affordable. We don’t buy auto insurance to cover oil changes and new tires. We buy liability and coverage to replace the car if it’s totaled and we buy it as individuals with a real risk analysis based primarily on our claims history.

We have to empower the market to drive costs down and quality up – it works every time it’s tried.

I realize that I have oversimplified some of the arguments but I’m convinced that I’m accurate. This is a complicated subject and it deserves more than a blog post worth of discussion.

Fortunately, as a nation, we are able to have that discussion and the people are participating. Really participating and thinking deeply about this. They are figuring out that while what they have needs to be improved, what Obama, Pelosi and Reed are offering isn’t an improvement.

Hopefully my side can offer some leadership in alternatives and not make a compromise that leads us the long way around the hill to where Obama and Co want to go in the first place.