Vol. 169 April 15, 2017 “Free-market Health Care Doesn’t Work”

“Nobody knew health care could be so complicated.”
-Donald Trump 2/27/17

Stephen Colbert responded with: “There was at least one person who knew that it was complicated, that tall, thin, greying guy who used to be in your office, Donald.”

Of course, there are lots of people who know how complicated it is. One of them is my old boss, Jim Lyons, founder and past-CEO of Cape Cod Healthcare, Inc. He is retired now and hasn’t lost his knack of making sense of the morass. He did just that in a recent Op Ed piece in the Cape Cod Times, and I’m shamelessly plagiarizing parts of it (in bold) for today’s blog.

“The fallacy [of the health care debate] is that necessary healthcare services is a free-market choice, as with buying a car, a house, or a kitchen table. If you have a stroke, break your hip or have an automobile accident [you don’t make] the same free-market choice for service”.

You could argue that if you want an elective procedure like a new knee, a new hip, or cancer treatment there is the opportunity for more choice, and that is true. Just take a look at the burgeoning advertising budgets of competing medical centers. The say they are competing on “quality”, and they are competing for your dollar, or more nearly correct the insurance company’s and the federal Medicare dollar. So far, in no U.S. health care market region has this “competition” led to lower costs. We recently wrote about the growing “lower-cost” market of medical tourism.

The two biggest reasons that health care costs keep rising are 1) we are all living longer and 2) better medical technology (both electronic and “better living through chemistry”).

 “New technology in health care almost always results in increased costs. In industry, new technology often lowers the cost of production. This is not the case for health care innovations.”

In fact, The Hastings Center estimates that 50% of our increasing health care costs is due to new technology. MRI exams have replaced  CT scans and other x-ray procedures in many instances, even in mammography; coronary surgery is being replaced in some instances by “simpler” medical devices inserted through a blood vessel; newer drugs with marginally better effects for heart disease and cancer are selling at much higher prices; PET scans are becoming the standard of care in certain cancer treatment protocols, etc.

Many years ago I remember the responses of a delegation of physicians and administrators from Great Britain who were touring American medical centers looking at our health care facilities. They were impressed, of course, with the MRIs and cardiac surgery units in Boston, but they “were just like what we had in London.” But, then they saw the same facilities in Worcester, Springfield, even Winchester and Burlington, and impossibly, Cape Cod, and they were impressed.

Efforts to control health care costs continue to be futile. “Republicare” was a political disaster and only attained a 17% approval rate in public polls. “Medicare For All” which calls for an incremental extension of Medicare coverage to those below 65 years of age has been in the House of Representatives (HR 676) since 2015. In Massachusetts there are now no less than four separate bills in the legislature calling for a single-payer Medicare For All in Massachusetts.

“One reason that it’s probably not politically possible to make a change to a single-payer system at this time is the more than 1,000 great buildings for servicing health insurance companies all over the country, full of many workers, many executives, and billions of forms.”

“Whether health care is a privilege or a right, we have made such great progress in the past 50 years that I don’t want to see any new health care plan that slows or reverses our progress. Please remember, health care is not a free-market choice like many of our other important decisions.”

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