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What's Wrong With American Health Care

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There was a time when everyone paid for their own health care..for all of it. This meant that most folks didn't have the services of a doctor. They had various things fading to the present from the past..shamans, midwives, witches, healers and all manner of folks interested in healing in primitive ways. As the industrial age emerged, medicine grew apace as a profession. Increasingly, the land owning classes and the nuveau riche enlisted the services of increasingly scientific medical professionals. The masses began, slowly, to find their own modern medical providers as well. We've endless heart warming stories of doctors in horse drawn carriages and early automobiles making house calls on patients in small town America. All, again, paid out of pocket. This was limiting. A working class family, after all, could only pay so much; and rich clients were scarce and reserved for the well known, successful doctors. It would be nice to have something to enhance the incomes of ordinary physicians. The answer was Blue Cross. This was a medical insurance plan founded for the benefit of the American Medical Association and their members. The AMA is the professional association of US doctors. With medical insurance, the possibilities were more limitless than anyone could have imagined.

With the pooling of risks implicit in an insurance program, individuals would happily undergo any promising treatments covered by their policies. This opened vistas. Armed with a reservoir of dollars pledged by fellow insurance clients, patients could now try new options for improved treatment. The Second World War helped too. With wage controls in place to keep inflation in check, manufacturers began offering health care benefits--health insurance. These perks escaped government controls and became a popular method of luring workers in a very tight wartime labor market. This was the beginning of employer health benefits.

The problem, finally, was profit. Health insurance was a for profit industry. Indeed, it had proved to be the magic elixer which would induce customers to opt for procedures they could never otherwise afford, increasing incomes for doctors, hospitals, drug companies and all manner of health care industry providers. The situation was complicated by the fact that employers paid the premiums, and generally didn't heavily resist increases until much later when crisis cost level increases became common. Insurance driven health care was a perfect "cost plus" industry. The ultimate payers for the health care were employers, not customers, Health care premiums were part of employment contracts. Cost incrases were easy to pass along One needed new machines (like the one that goes "ping"), new drugs, new surgeries, new research, more hospital beds and on and on. Each new investment (done at great cost since health care is all important), justified new charges and new health industry earnings. Finally, it simply got out of control.

As early as 5 or more years ago, General Motors and Ford called for national health care. They could no longer afford to pay health care costs for employers--particularly since their competitors around the globe had government funded, single payer health care. The USA does not. The employers carried it all. Now, with Globalization, US companies compete directly with the rest of the world which has national health care.

Under national health care schemes, there is not cost plus push to raise investment in drugs, doctors' incomes, hospital fees, testing and myriad other services to maximize profits. The goal is rational, effective, cost efficient health care for everyone. Our system is profit maximizing health care with nearly no cost oversight.

Current proposals for "universal" health care do not invoke 'single provider', or government based health care probrams. This isn't surprising. We have a multi-billion dollar a year health insurance and health provider industry all reliant on private insurance. Private insurance companies add nothing whatever. They simply do (badly) what single provider (government owned) systems do. The outlook is not good. Such reform as we shall have--and we shall have some--will simply add government payments to the private, cost plus, insurance, health, drug industry. All of this will result in even more money tossed at a grasping, out of control industry group.

For those who argue that single provider health care will cost too much and be inefficient, let them refute this: the US already pays more per capita for health care than any other nation on the planet, and we're at best in the middle of the pack on standard public heath metrics (life expectancy, birth rate survival, etc.). The money is spent, but unwisely, on disease treatment rather than prevention, and only on the section of insured Americans--not on the vast millions without any coverage whatever.

We shall fail with health reform, again because we've wedded ourselves to the "free market", the most brutal and unfair system the Enlightenment ever thought up.

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Francis Ferguson Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

I am a PhD economist who has taught at UW Madison, Ripon College, Victoria Univ. of Wellington NZ, Whitman College and the Univ. of the Americas in Cholula MX. I worked, as well, as an energy economist in the natural gas business for many years. (more...)
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