16 March 2017

Health Care Debate

This op-ed in the NY Times reflects the intellectual bankruptcy of the Right on the health care debate. 

Titled " Don't try to fix Obamacare, Abolish It," it purports to stand on the "principle" that what Republicans should do is to address costs, not coverage numbers, to make health insurance more affordable. It includes a single paragraph to morally justify the position taken (because ultimately, as a moral imperative, a health care policy must be about providing health care to the citizens, not reducing costs falling mainly on ultra-wealthy high bracket taxpayers). 

"Increasing competition and choice would lower prices for all kinds of insurance. Lower prices would free up corporate dollars for other things like innovation and jobs. Lower prices would also make it far more affordable for Americans to buy their own insurance than wait for government to subsidize it."

​But this is BS. Any honest economist will admit that health care is intrinsically a case of market failure. There is no health care delivery system in the world, never has been, never will be, that operates on free market rules. It simply does not work. Health care is not a profit center. It is a necessity, that must be paid for from the productivity of the economy as something that simply must be provided. Like clean water, electricity, sanitation, roads, bridges, railroads, air travel... all of these, to one degree or another, are not pure free market systems, but are subsidized by public wealth transfers. 

And there is absolutely no evidence that "free market principles" have ever resulted in lower health care costs. Just the opposite. The market incentive in health care is to deny sick and infirm people health care, so that they will die and rid the system of unprofitable cost centers. Unregulated or minimally regulated private insurance has much higher administrative costs, and most of its man hours are spent trying to minimize the delivery of health care, which is ultimately counterproductive. 

We need publicly financed health care, with sensible regulation to focus on prevention and health outcome, not maximized services delivery, and reasonable standards to avoid excessive costs. This works in many other countries, and it's time for us to admit that our system, even under Obamacare, does not work very well. We spend 20% of our GDP on health care, while most developed countries spend more like 10%. 

This Right Wing voodoo economic view of health care will make matters worse (as will the half-measures of the current Republican health plan, which is more a tax cut than a real health care plan). We must face facts and move towards an Enhanced Medicare for All system as soon as possible. ​

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