More Bad Ideas From Conservatives On Health Care Reform

Another article demonstrates how little conservatives understand health care as they try to come up with arguments against health care reform. This is from the American Enterprise Institute (hat tip to Patrick Appel):

Health insurance should not cover basic or routine medical services, but instead should cover major illnesses, surgeries, etc. Moreover, the government should require that healthcare providers charge all patients the same fees for out-of-pocket medical procedures (insurance companies and the government should be free to negotiate discounted prices for the services for which they directly pay, but these preferred rates would not apply to the services paid out-of-pocket by their members). This would bring normal, competitive market forces to bear on the provision of routine medical services. Insurance would then provide (as it is properly intended) coverage against significant and expensive maladies. This helps the poor in two ways. First, routine services would be much cheaper, and so the poor and uninsured would be able to afford (out-of-pocket) basic services. Second, the price of catastrophic medical insurance would be within reach of many more Americans. While high-deductible insurance plans already exist (in which the insured pays the first $1,500 to $2,000 in medical expenses and the insurer pays everything above this amount), what is really needed is for Medicare and Medicaid along with most employer-provided plans to adopt this high-deductible model. Although the current system epitomizes the overuse or misuse of insurance, the Obama plan fails to recognize this, and instead seeks to expand the size and scope of this distorted system.

The major problem here is that a tremendous amount of health care costs do come from routine medical services which become major expenses for those with chronic diseases. Many people can now afford what is essentially catastrophic insurance, but it does them little good as they cannot afford the high deductibles and co-pays should they require medical care.

If people have to pay out of pocket, they will be less likely to pay for routine treatment diseases which are generally asymptomatic such as diabetes, hypertension, and hyperlipidemia. This will create a greater amount of “major illnesses” and surgery. It is far more cost effective to provide routine care to people with diabetes and hypertension than to perform coronary artery bypass surgery or dialysis, or to provide post-stroke care. Eliminating coverage for routine medical services will also reduce the likelihood that people will receive tests such as mammograms, pap smears, and colon cancer screening, increasing health care costs in the long run.

As I mentioned yesterday, an article in this week’s issue of The New England Journal of Medicine has also noted how such market-based approaches to health care reform are not likely to be successful. This type of market-based argument, which we also heard from Republican candidates such as John McCain last year, will wind up increasing the cost of health care and do noting to achieve the goal of making health care coverage available to those who do not currently have it.  The arguments really make no sense if you have any concept of how health care works. They are just empty arguments to try to block actual reform.

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