Tuesday, July 28, 2009

Why will socialized health care work?

What I want to know is why people think that socialized health care will work.  I mean let's break this problem down into it's components, the actual problem and the solution.

What I am told is that the problem we are facing are rising health care costs.  Over the last few years health care costs have continued to rise and are going to increase at a more rapid pace.  I am not going to say that this doesn't happen, because it does, but let's take a look at the reasons that health care costs have been rising.  Health care costs can be split into two different categories from my point of view, medical insurance and out-of-pocket, or a-la-carte, expenses.  First, the insurance costs go up because insurance companies have to make a profit and their costs go up because of both administrative costs and reimbursement costs.  Let's say that administrative costs only need to go up when there is a raise in the minimum wage or there is added red tape, and therefore could be pretty much static.  That leaves us with the reimbursement costs being the main factor in the rise of medical insurance rates.  There are also two main factors in the rise of reimbursement costs, rising cost of service and increase in the number of services performed.  We'll say that reimbursement costs are equivalent to costs incurred by someone paying out-of-pocket.

Okay, we've looked at the problem, so let's take a look at the solution.  The proposed governmental solution is one of socialized health care in the form of a tax based public insurance option.  In other words, everybody pays into this system and is helping to support it.  Well, gee, if it is another insurance option, isn't it still affected by reimbursement costs.  Why, yes, yes it is.  And the only way that an insurance company can cut those costs are by decreasing the number of services performed or to lower the cost of service.  To decrease the number of services performed, the government could put in age restrictions or just other restrictions on procedures.  And to lower the cost of service, the government can put caps on the price of services performed.  Are either of those options going to make health care better?

What I'm not saying is that insurance companies are the best option.  What I am saying is that a government run insurance company isn't a better option.  What our Nation was founded on is Capitalism and competition breeds lower prices and innovation.

No comments:

Post a Comment