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Competitive health care requires eliminating system

RALEIGH — Let’s suppose that each week I ate five Subway sandwiches. You ate one.

Instead of paying for the sandwiches individually, we belong to a group of 100 people required to pay $15 a week for our Subway food consumption.

If you only consumed one sandwich a week, you might decide this pool of sandwich eaters wasn’t such a good deal. You might decide that my sandwich-eating habits were one of the reasons why it wasn’t such a good deal.

You might conclude that the entire sandwich-buying system smacked of socialism.

You’d be right. You’d also be right if you recognized that the system described is exactly how we, as Americans, consume health care, through the purchase — in premiums or in taxes — of private and public insurance.

One of the more astounding aspects of public policy debate regarding health care spending — whether the focus is national health care reform, rising Medicaid spending or a troubled North Carolina state employee health plan — is how few people acknowledge that our entire system is already built around a socialist model.

We pool together resources on a relatively equal basis and spend those resources unequally based on need.

So when critics of the public-sector side of health insurance say that the only way to reform the system is to create more competition, what do they mean? Do they want to do away with the market distortions created by insurance?

In Washington, conservatives push the notion of turning Medicaid, the health insurance program for the poor, into a block grant program. In other words, let’s ration care at the state level but let legislatures figure out the details.

That’s not to say, if the political will existed, that policymakers couldn’t create a competitive health care system. The way to do so would be to turn back the clock to the 19th century, when health insurance in the United States was largely unknown, and re-establish a fee-for-service health care system.

In that kind of system, competition would rule. Doctors and hospitals would be forced to woo patients based on advertising cheaper services than their competitors down the road, which may explain why they were the chief advocates and creators of health insurance in the early 20th century. Costs would be driven down, and dramatically so.

We could say, unequivocally, that we had a capitalist system of health care consumption, at least if some trust busting was done on a few of the big hospitals in the state and around the country.

There would be a few downsides.

If you had no money and were lying in a ditch dying, you might just stay there and die. As Americans, we’d need to rethink this modern notion of basic medical care as a right. And out-of-work health insurance execs would drive up the unemployment rate.

It’s a nice fantasy to believe that competition would solve what ails our health care system. The reality is that real competition would require dismantling the system.

Scott Mooneyham writes about North Carolina politics for the Capitol Press Association.

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