free market freedom of choice medical politics

Something has to give

I’m trying to keep up with the whole health care reform thing, and it’s making me question my sanity. I thought that the pressing issue was how much our health care cost, but now it seems like “coverage” is the big thing. The real problem is how we imagine health care should be. The ideal coverage doesn’t cost us anything and treats everything. Clearly, that can’t happen.

I got this comparison from Penn Gillette of all people… Imagine that we had “food insurance” that worked the same way as our health insurance does now. Do you think that the prices of food would rise if there wasn’t any incentive to look at how expensive things are? If our insurance covered everything (and what good is insurance if it doesn’t?), we would buy the best food all the time. In addition, all of the people that made food would make more and more expensive food. In other words, the good things about a market would get turned on it’s head and we’d have ever increasing costs instead of competition driving prices down.

I do think that the price we pay is way out of whack, but I don’t put the blame on greed, I put it on the fact that our incentives are all screwed up. If you wanted to get philosophical, you could claim that greed is what causes people to want services at either no cost or very little cost to them… but I would never do that.

We need insurance to be more like our home insurance or car insurance. Those policies do not cover everything, they are there for catastrophic losses. The typical health insurance tries to be exhaustive. What ends up happening is the worst of all worlds. We end up paying for our health care in installments AND we get the high prices from the screwed up system. Yes, we should insure against really bad things happening, but we have gone overboard in insulating ourselves from the cost of things, our current system is the result.

Needless to say, the 1000 page monstrosity that is being worked on up in DC is nothing more than doling out favors and scoring political points. I am very certain that whatever comes out of that process will cause prices to go up even more, our quality of service to go down, or some other really bad outcome. The political process is not a very good tool for problems like this, look at what it has already done! If more people would realize what has happened, we wouldn’t be turning to the same people that screwed us up in the first place.

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