Solving the Health Care Dilemma

How many people do you know who think theircontrols under penalty of death.  But, even that
Congressperson has the answers to providingdidn’t work, and it hasn’t worked since. 
health care in America?  Or, their Senator? What price controls do is cause shortages,
George W. Bush?   Barack Obama or  Hillaryincreased costs and disrupted markets.
Clinton?  Or, for that matter, any politician?  Do    
they really have the answers?Look at what has happened to the Medicare
 program since 1984, the year the government
If they can’t do it, then how about thechanged its method of paying for hospital services
politicians in Canada, or Great Britain?  Have theyfrom a “cost plus” to a system called
solved the problem in their societies?  SomeDRGs (Diagnostic Related Groupings).  DRGs are
people believe they have.  However, in England,a method of classifying illnesses and assigning a
where the private practice of medicine wascomparative value and a specific authorized
outlawed when socialized medicine was firstpayment to each.  At that point, many hospitals
established there, they were eventually forced tobegan to lose money because the government
reverse their policy and permit the public to gostarted dictating the prices that are paid for
outside the government’s system to obtaininpatient care.
health care from private physicians.  
 As much as 70% of many hospitals’ patients
In Canada today, the story is much the same. are seniors, whose bills are paid by Medicare. 
Many Canadians come to the U.S. for emergentThe Federal Health Care Financing Administration
needs, such as bypass surgery, because the(HCFA) determines, in its sole discretion, the
waiting time in Canada is interminable, often manyprices that can be charged for seniors’
months before their citizens can get life-savinginpatient hospital care, and then pays only 80% of
treatment when they need it.  those amounts.  The differences between a
    hospital’s standard fees for service and the
State-Run Health Careamounts that Medicare pays must be written
All state-run health care systems have one thingoff.  They cannot be collected from the patient. 
in common: rationing.  Not necessarily involvingThat’s price control.
the use of ration cards, but rationing    
nonetheless.  Rationing of resources.  The causeFurthermore, because Medicare payments are
is a devilishly simple principle that’s present indetermined solely by the government, annual cost
all nationalized health care programs.  That is,of living increases are limited, generally to
it’s free, or so low cost that it’s almostbetween 1-1/2% and 2-1/2%, in spite of the fact
free.  Basic economics clearly demonstrates thatthat hospital costs have been rising for years at
whenever something is free, the demand quicklyan annual rate of anywhere from 6% to 14%. 
becomes unlimited.  The lower the price, the    
greater the demand.  Give something away andAnother little known fact about Medicare is that
you can “sell” everything you have andseniors are prevented from seeking care outside
more.the Medicare system, even if they are willing to
   pay the bill themselves.  Any doctor who accepts
However, the flip side of unlimited demand is apayment directly from a senior who is covered
shortage of supply.  And, not having enoughby Medicare is automatically disqualified from
doctors, nurses, or expensive equipment, such asproviding care to all Medicare patients for a period
CAT Scans and MRIs, eventually leads toof two years.  This is especially important in
rationing.  Without enough health care to gosituations where a patient wants a second opinion
around, rationing becomes a necessity.  That hasand would like to see another doctor.  That type
been the failing with nationalized health care inof regulation is certainly an element of socialized
England, Canada, Germany, Japan, the formermedicine.
USSR, everywhere it has been tried.    
    Many Hospitals Lose Money
So, if there are no politicians who really knowBetween health insurance contracts (HMOs) and
what should be done to solve our health careMedicare limits on their charges, hospitals generally
problems why do we keep expecting them tocollect only about 50% of their total billings.  The
come up with the answers?rest is written off.  The result of all this is
   predictable: many of them are losing money. 
Just exactly what are the problems?  Too manyAbout one-third of all hospitals in California are
uninsured?  Too high cost?  Poor quality?  Lackcurrently operating at a loss.  With a national
of availability?  All of the above?  Do you knowhealth care plan, at some point, many hospitals
or think you know?would either be closed or services curtailed. 
    That’s been the pattern in every country
What have been the government’s (readthat has nationalized its health care.  Nonetheless,
politicians’) solutions to date?that seems to be where we are headed, in spite
 of compelling evidence that it doesn’t work. 
Health Care Policy    
National health care (socialized medicine) in oneLike the proverbial frog being cooked in a pot of
form or another is the primary health care policycold water, Americans are gradually becoming
that is gradually being adopted in America.  And itaware that the quality of their health care is
is slowly but surely lowering the quality of thedeclining, even as costs continue to rise.  It just
health care we are getting.  Talk to any doctorhasn’t sunk in yet.  When it does, they will
you trust and see if they don’t agree.  Theyundoubtedly be led into believing the government
will tell you that they are working much longerhas the answers and demand more government
hours for far less money, that many physicianscontrol, regulation and oversight.  And, our
are retiring early or converting topoliticians will be only too willing to oblige. 
“concierge” practices because they are    
fed up with the government and insuranceNationalized Health Care
company bureaucrats telling them how to practiceNationalized health care in America is gradually
medicine.  Consequently, there is a growingovertaking the free market, and we are all being
shortage of doctors and nurses.slowly cooked in the pot of government
    intervention.   So, don’t be surprised at the
But, you may say, we don’t have socializedtype of health care program we get as time
medicine in America!  Perhaps not yet, butprogresses.  Whatever your own conclusions,
we’ve been moving in that direction for someremember one thing: that our politicians won’t
time, and we seem to be going further down thathave to rely on whatever health care plan they
path as the years progress.  It’s a slipperyestablish for everyone else.  As usual, they will
slope.   For example, consider Medicare. have their own, superior plan.  And, it will not be
   a part of the nationalized health care system that
But, Medicare is not socialized medicine, you maythe rest of us will be required to use.  If you
insist.doubt that assertion, just look at the health care
    plan that our Federal legislators and government
Unfortunately, it is, or is headed that way. employees have now. 
Why?  For one thing, it’s a system 
that’s based on price controls. In the interest of full disclosure, I’m one of
    those seniors who has Medicare health insurance
Price Controlscoverage and I ran a hospital for about seven
Price controls have never worked, ever, in anyyears.
society at any time in history.  They were tried 
as early as 301 A.D. by a Roman emperor,© 2008 Harris R.
Diocletian (243-316 A.D.) who implemented price