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logo    Medical Savings Plans, Portable Health Insurance, and other Idiocies


When one considers the number of times that the American political establishment has enacted attempts to solve or even ameliorate problems with the American health care system, and then examines the reasons these attempts have failed miserably, one has to wonder if our Congressmen have the level of seriousness any solution requires. For if they claim to seriously want to reform the system but have been unable to do so, they are exposing themselves to a charge of incompetence, since the problems are not that difficult to solve. Other nations have long ago reformed their systems. Yet Americans still spend more on health care than the residents of any other country and get less in return.

A clue to why this has happened is to be found in certain completely idiotic ideas that have recently received journalistic notice.

We are being told, for instance, that we need to shop more carefully for the medical services we buy.  An article I read recently in either the Dallas Morning News or the Dallas Business Journal, I don't remember which, told the story of a person who upon not feeling well went through an extensive sequence of tests, all of which turned up nothing. The implication was that the person would have been smarter to decline further testing after the initial tests proved to be negative, and that if we all did that, the costs of medical care would decline.

Two things about this proposal mark it as idiotic. First, the decision advocated is one that is easy to make in hindsight but impossible to make in foresight. Would anyone be making this proposal if the last battery of tests revealed a serious illness? I doubt it. Second, reducing testing is not likely to reduce medical costs. Laboratories cannot be eliminated, and their operation, even with reduced testing, must be paid for. So if the number of tests handled by these laboratories is reduced, the likely result would merely be a rise in the price of tests.

Two ideas put forth by John Goodman, the founder and president of the National Center for Policy Analysis in Dallas, TX. are also too idiotic to warrant any recognition. He is credited as being the father of health "savings accounts." Yet it is difficult to see what such accounts would accomplish or how they could possibly be effective.

For example, isn't it necessary to know how much money such a plan would have to contain to provide anyone with health-care security? What is the average hospital bill, for instance? And how long would it take a family contributing say a sum equal to its current health-insurance premiums to accumulate that amount? And what would happen if a single episode wiped out the plan? What would this family be expected to do between that event and the moment when the plan would again contain a sufficient sum to cover the family's health costs? Go without medical care? That's not a solution. And what of all those people who lack medical insurance merely because they cannot afford any premiums? How could they ever be expected to contribute to such medical savings accounts? How would medical savings accounts help them?

And now Mr. Goodman has proposed portable medical insurance. A fine idea for those employed by some firm that offers such insurance and who moves from one employer directly to another.  But what about the person who goes unemployed? What good does it do him? The last thing a responsible individual would want to do to such a person is increase his basic living costs. Yet that is what Mr. Goodman is proposing.

In offering proposals for the improvement of the American health-care system, it is important to keep the problem firmly in mind, which is that too many people lack access to the system because its costs are too high. And neither of the three proposals described above affect this problem in the least. As a matter of fact they worsen it, since the person whose medical spending plan goes bust now has lost his access too. The first idea described above is entirely unworkable, and the astute proposal for portable medical insurance affects only those already insured.

Because of the conservative ideology that many Americans hold, and because that ideology has more than its share of proponents in the Congress, Americans may not be able to solve this problem under any of the current circumstances, because there is only one way to reduce the system's costsproviders have to be made to realize that they must be willing to accept less.

Would that destroy any system of medical care?

We often hear that it would. We hear that fewer people would choose medicine as a profession and that pharmaceutical and medical equipment firms would cease to innovate. But those claims are dubious.

I don't know exactly when physicians began to earn incomes considerably higher that those of the ordinary working population, but I know it was sometime during the last half century. In the 1930s and 40s, becoming a physician did not guarantee wealth; yet, people chose medicine as a profession. Nurses and schoolteachers have never had the promise of wealth, but people have continued to choose these as their professions. Yes, there are shortages now and then, but there has never been an absolute lack.

And what of the pharmaceutical and medical equipment firms? Would they stop developing new products? Well, what would happen if they did? The pharmaceutical firms would transform themselves into just so many more manufacturers of generic drugs, and the equipment firms would become manufacturers of equipment on whose patents they could not depend. And even if these firms chose this action, someone else would be sure to come along to do the research and inventing. Universities already do much of the original medical research and there is no reason why they wouldn't continue to do so. And many original inventions have been made in home workshops and garages. The prospect of wealth is not and never has been the only motive for creativity.

The real upshot is that if wealth were removed from the equation, the result could very well be more truly dedicated people entering medicine and better drugs and medical equipment, for just as the greatest art has often been produced by the dedicated but impoverished artist, the best medical care system could also be the result. (3/28/2005)