September 16, 2004

Health Care Reform

Piling on the health care debate...

John Kerry and his merry band of anti-war Robin Hood brothers pretend that they want to focus the national discussion on health care reform. While they continue to waddle through the fall-out of their bungled cloak and dagger mission in Kinko's of Abilene, JK and Silence have been talking health care.

Silence sounds like President Bush with his comment, "As JK would say, it is about choices and I would like to see this country move toward a system that gives me as a consumer a direct choice over my health insurance." Well, almost anyway. W wants to give consumers more control over their health care. More to the point, Silence says he is not asking for anyone to pay for his health care, but those who lobby for mandatory health insurance coverage for all are doing precisely that. That's what insurance is after all. The essential distinction between a market based choice is that individuals currently have the freedom to take their health insurance business somewhere else or, as many others do, to pay their healthcare provider directly. Forcing insurers to accept everyone destroys this choice (analogous to public schools, but with much more money at stake).

On the specific subject of tort reform, the CBO reports that more than 40 states have at least one tort restriction in place and evidence shows malpractice premiums are lower as a result. They also claim that malpractice costs account for "less than 2 percent" of total health care spending, (four times the half-percent figure Silence cited) but that the growth rate of malpractice awards has been double the rate of inflation since 1986 and malpractice insurance premiums have risen 15% from 2000 to 2002, nearly twice as fast as total health care spending per person.

The same report mentions what amounts to the major problem here:

"The amounts that physicians pay for malpractice coverage are generally based on broad aggregates, which reflect factors such as doctors' medical specialties and locations but neglect relevant differences in the quality of their services. Thus, even if premiums are correct on average, they may be too high for the large majority of physicians and too low for a minority who are less careful or competent."

Whatever reforms we make must lead us back toward the power of natural market selection that helps put the inferior providers of other products and services out of business. Anything that doesn't meet this test will only make matters worse. In health care financing, as in health care provision - "First, do no harm."

Posted by JohnGalt at September 16, 2004 10:26 AM

Payback is a bitch. Now Johngalt is fact checking my ass - maybe he's tied to JK, hey is he registered as a 527? I read a story that quoted the 0.5% number from an A.M. Best report (they are the leading insur ance industry source) but I cannot find any free reports available electronically to link to. But I suppose there are likely differences in how they and the CBO calculated the costs. 2% is still pretty small, even if it is 4 times .5% (nice, but hey 400% bigger sounds even more impressive). The size of malpractice claims form a viscious circle with the cost of health care as the largest settlements tend to provide for the long term care of the severely incapacitated. As the cost of the care rises, also much faster than inflation, juries award larger damages to offset these costs. I am certainly for tort reform, in the medical and other industries, as JK rightly says we have reached a point in our litiguous society when accidents just don't exist anymore, everything can be blamed on someone. I just believe that the facts here show that this is not the primary cause of the increase in health care costs but more of a convienent and popular whipping boy for the politicians.

Posted by: Silence Dogood at September 17, 2004 01:08 PM
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