Health Care: Two Problems, Not One
I admit to being completely perplexed about how health care should be reformed in this country. That there is a problem is undeniable: costs are already much higher than they are in the rest of the world and are growing at rates far above inflation, large numbers of people lack coverage, and medical outcomes are mixed. Add to this an absurdly complex administrative system that makes scheduling visits and paying bills a nightmare, and one gets a clear picture of a badly broken system.
While the problem is undeniable, the solution remains unclear to me. And unfortunately, I find the debate about what to do about health care remarkably superficial and unenlightening. What bothers me most is that the discussion seems to focus on just one part of the problem: how we pay for care. Should there be a single payer? Should insurance companies still be involved? What is the right role for employers? How much should the government pay and how much should stay in the private sector? All these questions about paying for care are important, but they only address one of the problems affecting health care. And it may not be the most important problem.
A much more significant problem, in my mind, is the underlying cost of medical services. Why are they so high in the US compared with the rest of the world? Why are they growing so fast? And what do we do about about them? There's a tendency on the left to blame the insurance companies for all the excess cost. While the insurance companies do deserve some blame, I think it's disingenuous to attribute the entire problem to profit-taking and administrative overhead. Even if the insurance companies skim 10% to 20% of the money being pumped into the system, the remaining 80% to 90% paid to doctors, hospitals, drug companies, and other providers still represents the bulk of the huge and growing cost.
By changing the payment system, we may get more people covered and may reduce some of the cost and hassle of obtaining care--but the cost gains are likely to be temporary if we don't address the underlying cost of care problem. I don't have a solution to the problem to offer today--but I hope my post will at least stimulate some debate on this second, and possibly more essential problem: how do we control (or adjust to) the underlying cost of health care services and products?
While the problem is undeniable, the solution remains unclear to me. And unfortunately, I find the debate about what to do about health care remarkably superficial and unenlightening. What bothers me most is that the discussion seems to focus on just one part of the problem: how we pay for care. Should there be a single payer? Should insurance companies still be involved? What is the right role for employers? How much should the government pay and how much should stay in the private sector? All these questions about paying for care are important, but they only address one of the problems affecting health care. And it may not be the most important problem.
A much more significant problem, in my mind, is the underlying cost of medical services. Why are they so high in the US compared with the rest of the world? Why are they growing so fast? And what do we do about about them? There's a tendency on the left to blame the insurance companies for all the excess cost. While the insurance companies do deserve some blame, I think it's disingenuous to attribute the entire problem to profit-taking and administrative overhead. Even if the insurance companies skim 10% to 20% of the money being pumped into the system, the remaining 80% to 90% paid to doctors, hospitals, drug companies, and other providers still represents the bulk of the huge and growing cost.
By changing the payment system, we may get more people covered and may reduce some of the cost and hassle of obtaining care--but the cost gains are likely to be temporary if we don't address the underlying cost of care problem. I don't have a solution to the problem to offer today--but I hope my post will at least stimulate some debate on this second, and possibly more essential problem: how do we control (or adjust to) the underlying cost of health care services and products?
