Bryan you are making a common mistake that I hear economists make frequently. You are treating medical care like any other commodity or service. There are some important differences though.
The laws of supply and demand will apply regardless of the differences you cite.
1) We need to start with the premise that everyone has the right to basic health care. Unlike a car , or a computer, or a haircut, everyone in this country has a basic right to healthcare. We as a society have already made this decision so its not really up for debate. we have medicaid and medicare already in place which are supposed to fill the gaps in private insurance. We have laws forbidding ER’s from turning away the uninsured. We have as a society decided that no one should be denied care we just have a lousy system for ensuring that.
Why do we need to start with the premise that everyone has the right to “basic health care”? And who defines “basic”?
2) Unlike dishwashers and TV’s patients don’t have and never will have a very accurate way of evaluating the quality of the service they get. For this reason a system that falls back on free market forces of supply and demand will result in services being sold at discount prices that can’t support high quality care. It will be a race to the bottom. Providers know that patients are very poor judges of good quality medical care so they will cut corners and provide the cheapest service because thats what will attract the greatest volume of patients. Currently the government and insurers do at least some degree of vetting of credentials. Without that minimal safety net patients will be left to the wolves.
Yours gives every impression that it is a slippery slope argument of the fallacious kind. How can people receive lousy healthcare and not realize it based on word of mouth or the success record of doctors? Or even based on lawsuits?
Ideally if you want to put the patient back in the decision making loop I would set up MSA’s for everyone. They have catastrophic coverage after the first $5,000 in costs and the MSA is there to pay for most of the first $5,000.
I’ve encountered a reasonable person!
Usually the first $5,000 is contributed to by the patient and the employer or the government with any unused funds remaining at the patients disposal for future medical costs or as an auxiliary retirement fund. This way the patient has some skin in the game for minor medical issues and they have the choice of going where ever they want, but they are covered for the big ones and have to stick to a program within their plan that has been vetted properly.
Also reasonable. I don’t necessarily agree with the proposal, but it’s a long way off from silliness.
3) Rationing - Typically supply and demand creates a price structure that rations services to those who can afford it. Not a very effective method of rationing medical care in a fair and effective way though. The wealthy get everything they want including a lot of useless and sometimes harmful care and the poor miss out on crucial care. Removing that mechanism would I agree result in rampant overuse. So what’s the solution? Partly what I mentioned above but, the best solution is to also have a panel of experts using evidence based guidelines to decide what services are effective and which ones are not and then create a system where all effective services are covered when its justified and ineffective or unnecessary services are not covered at all. This eliminates over use of services by everyone. But his needs to be done centrally and nationally. Right now its done by individual insurance companies creating a patchwork of policies that dont make sense allowing some people to get coverage for silly things that dont work while others are denied basic services.
“Rationing” is typically defined as government-mandated, and that’s how most people understand it. It’s true that “price rationing” serves to slot consumers toward certain types of and quality of services, not taking charity into account. Charity medical care has a strong history in the United States.
The individuals on the panel that makes these decisions should be appointed like a supreme court judge is so that they would be free from public and political pressure and special interest groups.
Exactly. They need to be unaccountable for their decisions. Or something.
See, that’s the great thing about price rationing. It keeps accountability at the local level.