Maybe the Worst Healthcare Op-ed Ever

Lawrence Purtill’s education aid op-ed isn’t the only recent Projo op-ed guilty of trying to convince people that a contradictory set of recommendations can be combined into sound public policy. In last Thursday’s Projo, Dr. Joseph Chazan presented this dud of a suggestion for containing healthcare costs in Rhode Island…

Government controls and regulators should recruit new insurance companies to enter and compete in the marketplace and mandate that everyone receives needed care regardless of ability to pay as part of the cost of doing business.
I really don’t think that “Use your gains in other states to subsidize big operating losses in Rhode Island” can become the basis of a successful recruiting campaign. How exactly can you recruit companies to come to Rhode Island while demanding that they give their product away for free or below cost? What precisely are the “recruiters” supposed to pitch as the advantage of doing business here?
Dr. Chazan’s attitude towards individuals is even more frightening than his attitude towards business…
Recognize that individuals demand all the advances that have occurred in medical technology and prescription medications without concern for their costs. It is unlikely that health-care costs can be contained without some limitation or rationing of services. However, this will require a frank debate and the acceptance that to contain costs, not every patient can receive every available service.
Translation: “People have a survival instinct and want to live, so government must teach them to manage and suppress that instinct”. That’s not a business that government should be getting into.
Before we start talking about giving government regulators, who have have a difficult time controlling costs without killing whatever economic sector they are trying to regulate, absolute power to decide who gets treatment and who doesn’t, shouldn’t we at least give an expansion of consumer-driven health plans a chance? After all, as another of Dr. Chazan’s recommendations explains (quite inadvertently), consumer driven plans are the best fit for a pluralistic, democratic society like the US…
Finally, permit a robust, honest, forthright, uncensored debate to occur among parties: government, regulators, providers, insurers and consumers included.
Dr. Chazan has the right principle in mind here, but what he and other advocates of a government takeover of healthcare never seem to grasp is that people need real choices if a robust, honest, forthright, uncensored debate is to matter. When individuals have a choice of healthcare options, they will talk to potential insurers and talk to their healthcare providers. That talk will have real ramifications, in terms of compromises on costs and on coverages and treatments offered. How can debate get any more robust than this?
Unfortunately, because of our employer-based system of health insurance, that debate is too restricted now because (save for a few forward-thinking companies like this one) employers have a big voice in the healthcare debate, but employees have almost none. And in strong-government schemes, the problem will become even worse, as government regulators, big-insurance companies, and well-organized special interests will become the only voices that matter, freezing ordinary people completely out of the debate.
Finally, Dr. Chazan reminds us that just because you think you’re debating doesn’t mean that you’re making sense…
About 20 years ago, Rhode Island had one of the most regulated and controlled health-care systems in America. State laws required the Health Services Council and the head of the state Department of Health to approve the opening of virtually any new health-care facility (“certificate of need”). That sustained the status quo by delaying or preventing competitive facilities from operating but failed to control increasing costs.
Er, why should anyone be surprised that heavy regulation in order to reduce supply led to increased costs?

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17 years ago

I had a slightly different read on Dr. Chazen’s piece, perhaps stemming from this comment:
“That only two private insurance companies operate in Rhode Island — United Healthcare and Blue Cross — prevents market forces from effectively influencing health-care costs. The state, rather than increasing regulations, should encourage new insurance companies to enter the marketplace so that market forces can drive competitive pricing and options for consumers.”
Of course, this is inconsistent with other comments he made, but it struck me that he represents an under-represented element of the health care reform through the markets debate. Many of the voices heard from the provider community advocate the pure forms of socialized reform. Yet, here is Dr. Chazen hinting that the market should play a role in this.
Were the provider community to get on board with the idea of injecting consumerism into the health care marketplace, the dynamics of the debate will shift dramatically. Many of these providers would even benefit individually from these plans as they own their own practices and are responsible for their own health care.

17 years ago

Chazan is correct. We need more competition.
As for HSA’s, my guess is that Chazan would strongly support them, but it is obvious that HSA’s are not a good fit for everyone. Even those groups offering HSA’s accept this fact. HSA’s are designed to lower healthcare cost for the middle class and do so effectively if used correctly. The LFI case is a prime example of how consumer driven healthcare can work and companies in similar situations should look at it.
But there are still large gaps in population coverage where HSA’s don’t fit that need to be addressed.
Employer-based healthcare helps the individual because it allows the individual to leverage the purchasing power of others. There are some drawbacks to employer-based healthcare, but it is still better then the alternative, government-sponsored healthcare.
Most employers would gladly shed the responsibility of paying for healthcare and would do so if they didn’t derive certain tax advantages from doing so.

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