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| quote: | Originally posted by Krypton
Compete competitively? Yea right. I went to a lung specialist a few months ago for a chronic cough. He identified the problem immediately, but then, wanted me to schedule a full body scan. I didn't need a full body scan, and this over-testing is rampant in the system. The more test they run, the more they can charge the insurance companies, the high the premiums. Is it no wonder why insurance premium inflation is so high?
Healthcare isn't a damn commodity to be bought and sold. It involves REAL people. It's not all about "the market" and supply and demand. FFS...lower the costs, and provide universal coverage. Is that too much to ask for? |
In theory, the market provides better incentives towards efficient behavior than does any kind of "universal coverage." However, these advantages are largely undermined by the widespread use of insurance, the moral hazard of which allows insured individuals to make inefficient choices regarding their own care at minimal cost to themselves. The market also fails with regard to those who are not insured (or at least the vast majority of them), since efficient market operation depends on all parties having enough resources to accurately express the extent to which they value the goods or services being exchanged.
Universal healthcare eliminates the latter problem by not requiring patients to pay for the services that they use, but for precisely that reason it exacerbates the former. Take that full body scan, for instance. Is it covered by universal healthcare? If so, then no one whose doctor proposes such a wasteful test has any incentive to decline it, since they will not have to pay for it. Moreover, while an insurance company has at least some incentive to refuse to cover the test (e.g., higher profits, keeping other clients' premiums down to compete in the insurance market), the employees of an administrative bureaucracy most likely have none at all.
Thus, the most probable result is that doctors, who have an incentive to recommend unnecessary tests (so that they can bill for them, and also to limit their potential liability), will do so at an even higher rate. Patients have no incentive to refuse the test, even those few who know it is not worth the expense have no incentive to refuse since they do not have to pay for the cost of the test anyway. Bureaucrats are unlikely to refuse the test , so it will be performed even though it produces benefits substantially less than its costs. And even if the administrative scheme were complex enough to empower bureaucrats to refuse to pay for treatments on a case-by-case basis, they would likely refuse almost as many necessary tests as unnecessary tests.
Worse yet, the individual is completely helpless to protect himself from this waste: refusing the test for himself does him no good, since he will still have to pay his proportionate share of the cost of all the other wasteful tests that other people accept.
The bottom line is this: yes, the current health care system is badly in need of reform. However, the issues are extremely complex, and simply providing tax-funded universal coverage is an extremely simplistic approach. It's a serious mistake to ignore the potential efficiency (and distributive) benefits of a market-based approach, but it is equally a mistake to overlook the reasons why the market has generally failed to produce efficient behavior among those who have access to health care and has excluded many people from adequate access entirely.
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