I (not Ashley) would like to share a poem that, I believe, accurately portrays a logical fallacy that many of us fall into. I wish I could cite a good reference to offer my condolences (yes, I mean condolences) to the creator of such a beautiful poem, but alas, all I can offer is a citation to wikipedia:
Without further ado, I cite the version most common at Cornville Elementary:
Beans, beans, the musical fruit.
The more you eat, the more you toot.
The more you toot, the better you feel.
So let's eat beans for every meal!
Notice the logical fallacy. The release of pressure, or "toot," feels pleasant (or rather a relief of discomfort, which can easily be associated with pleasure) so we should have more of it. However, the toot would not be necessary had we never eaten the beans in the first place. The beans are the PROBLEM not the SOLUTION.
Notice the similarities between this logical fallacy and the current "solutions" surrounding health care. First, we need to correctly identify three of the greatest problems in health care (hint: it's not lack of funding).
1) An artificial restriction in the supply curve of medical care. The federal government and the AMA severely restrict the number of doctors and nurses that graduate each year. There are many reasons for this, one being a lack of medical schools and nursing programs, and two the requirement of a ridiculous number of years of schooling to do something such as writing an amoxycillin prescription (your visit costs $40, and the medicine costs $4).
2) Lack of consumer price sensitivity. Consumers of health care do not really care what they pay. The government or insurance company pays for it. Co-pays have helped in this sense, but only partially. A co-pay makes you think twice whether you really need to go to the doctor or not. But once you are there, you do not care how much the total bill is because how much you pay has already been decided. Much of the structure in the insurance industry is setup the way it is because of government policies that go back to price controls from the 1930's and 1940's.
3) Excessive liability for malpractice and ridiculous amounts of red tape and paper work. Check out your closest doctor's office. What is the ratio of secretaries to doctors?
Now we can appropriately exam the "solutions." Almost all of these solutions consist of, "Let's dump loads of money on *place group of voters that you need here*." Only someone who does not understand the purpose of prices can say this with a straight face. Prices are like an auction. There is not enough of a good to go around, so the price keeps going up until there is enough to go around. "Wait!" you say, "That's not fair! Healthcare should not depend on who can afford it!" Then how do you propose healthcare can be efficiently distributed? We already know that there is not enough to go around (otherwise it would be nearly free). To which benevolent holy person would you turn to decide who receives health care, and who does not? A lottery system? Really really long lines?
Governments dumping money into healthcare is like handing out $100 bills to select people in a long line at a movie that will sell-out. The theater correspondingly raises admission prices until the show just barely sells out. More money does not make more seats appear in the theater. The same number of people see the movie. Handing out money simply excludes people who did not receive your "generosity." A side note here: those who need healthcare most, but can't afford it, generally receive it anyway (at the expense of those in the back of the line). If you don't believe this, look into how much hospitals lose every year in uncollected bills. Billions and billions... which then need to be made up by people who actually pay. The price increases.
Ways to remedy the problem in the theater and ways to remedy problems with healthcare are similar. Put more seats in the theater, expand the theater, build another theater, PRODUCE something. Redistributing wealth will not help much. Here are three quick means to create more seats in the theater of healthcare.
A) Build more medical schools and create more nursing programs. The AMA and federal government basically need to get out of the way. The demand is there. The talent is there. Just get out of the way. Alas, the Republicans are not on board with this, and the Democrats actually are directly fighting against this. Another idea would be to reduce the prerequisites for medical school. Require just an associate's degree instead of a bachelor's degree. Better yet, bag the general ed garbage and create a two-year pre-med program.
B) Remove the regulations on insurers so they can create a price sensitive consumer. For example, what if your insurance was structured in the following way: You have $5,000 to spend each year on an HSA card. You also have a $10,000 deductible per year. If you go over $5,000, then it comes out of your own pocket. However, you can carry your balance over to the next year. If you only spend $1,000 this year, you have $9,000 the next. Also, at the end of the year, if you are over $10,000 on your HSA account, you receive the difference between your amount and the $10,000 in cash. Of course, these are arbitrary numbers that I've pulled out. A number of actuaries would have to create the real system, but you get the point. You have a consumer who checks out the prices and quality of all nearby dental and doctor offices before selecting one.
C) Reduce the liability of malpractice and separate malpractice into two categories, honest mistakes and gross negligence (drunk while working, sabotage, etc.).
It's my dream to see a healthcare clinic that resembles Jiffy Lube. You walk in the front door, you see the prices posted, you swipe your HSA-like insurance card. After filling out a diagnosis sheet, you are almost immediately called into the room. A nurse is there with a large television screen on one wall. Because of telemedicine, you have access to specialists from every category ever categorized. You receive a diagnosis, medicine (if needed), and your file is kept electronically. You walk out the back door 15 minutes after walking in the front door. You are charged a dollar-fifty a minute, and you spent 10 minutes with a doctor. The total cost is $15. You may think that this is ludicrous, but when was the last time your insurer rewarded you with cash for being healthy? When was the last time you got out of a doctor's office in 15 minutes? When was the last time you were only charged $15 for a visit? Or better yet, when was the last time you spent a whole ten minutes with the doctor?
Now I feel the need to offer you my condolences if you actually read all the way to this point. My conclusion is this: Kellogg needs to start up soon, or else I might end up writing more entries in this blog.
Hummel on the Curse of Cash
2 hours ago