Milton Friedman: How to cure healthcare

Hoover Digest ^ | 2001 | Milton Friedman

[The Spirit Of Allegiance]

GREAT post! Much to consider here, much of merit.


I'm just sure all the major deadstream media will have this as their lead story tomorrow. /SARCASM off

[jagrmeister]

I think Friedman has a great point regarding the effects of third-party payer. It takes away quality control and the role that consumer choice has in keep costs to a minimum.

[Jaysun]

Great Scott that's a long one! He has some excellent points and ideas. My lone idea has always been to convince insurance companies to offer their customers an incentive to save money. For example, the insurance company could tell the consumer that they'll send them some amount of cash in depending on how much of their coverage remains unused at the end of the year. That would get people to think before they agree to a lot of unnecessary test or doctor visits while also saving the insurance companies money. The prices would eventually work their way down. It's not the single pill that'll save the entire health care disease, but I think it deserves consideration.

[RWR8189]

Milton Friedman is amazing.

[endthematrix]

Health care is termed as a "handout" by Friedman, a "benefit" by employers, and a "right" by the DUmmies.

[lainde]

bump for later.

[endthematrix]

"If the tax exemption were removed, employees could bargain with their employers for higher take-home pay in lieu of medical care and provide for their own medical care either by dealing directly with medical care providers or by purchasing medical insurance. Removal of the tax exemption would enable governments to reduce the tax rate on income while raising the same total revenue. This hidden subsidy for medical care, currently more than $100 billion a year, is not included in reported figures on government health spending."

Kinda lost on this. Meaning that the $100 BILLION would be retained by the Fed and in turn it would lower income tax? There is a lot of variables in that paragraph.

[Crackingham]

...employees are likely to do a better job of monitoring medical care providers—because it is in their own interest—than is the employer or the insurance company or companies.

Friedman really lost it on that one. While most of what he says makes a lot of sense, that one is just pure crap. Is he seriously trying to tell us that individual consumers monitor medical costs better than insurance companies. Has he even heard of how HMO's operate? There are a lot of good suggestions in that article, but I have no idea where he gets this notion that average Americans who know little or nothing about health care will somehow be able to do a BETTER job of aggressively monitoring the health care sector than insurance companies do. That just makes no sense.

[patj]

bump

[Jaysun]

Kinda lost on this. Meaning that the $100 BILLION would be retained by the Fed and in turn it would lower income tax? There is a lot of variables in that paragraph.

(zoom zoom) That crap flew by me too.

I think he's saying that the exemption should be removed to stop encouraging businesses to provide health care STOP this would encourage employees to hash out a better income from their employers (no insurance? show me the money)STOP the Feds could lower the tax rate on income, and still end up with the same amount of cash because the employees would be making more money (lower the percentage while also increasing the dollars to be taxed will result in a wash).

This all sounds like a pipe dream and he overlooks the fact that such an arrangement gives the shaft to business (which raises the cost of capital) bad bad bad. I still say it's easier, and more effective to leave things as they are and have Senor Insurance Agent call up his customers and say, "Hey, if you watch what you make us spend on your behalf, and save us some money where you can, we'll kick some of it back to you come Christmas time." That's simple, feasible, and it gives the consumers a reason to be thrifty. And as we all know, thrifty is nifty.

[G.Love]

Friedman really lost it on that one.

Makes perfect sense to me. If I know I am going to have to pay my medical bill instead of having the insurance company do it, I will start asking questions. "Is this test really necessary? Can you prescribe me a cheaper drug that will do the same thing? Why do you charge $45 for an aspirin - can I bring my own instead?"

The way it is right now, I never see the bill and have no idea how much the charges are. By the time the insurance company sees the invoice, the service has already been rendered and all they can do is negotiate for a discount.

[KateatRFM]

I agree with that. Dad was in the hospital for two weeks once and got well enough to need amusement, so he asked for a printout of his bill. Eventually the insurance company saved $6,000 more or less in either bogus charges (pregnancy tests, for one thing) or charges way outside the reasonable. He had to ask a lot of questions and get a copy of the code sheet (but it can be done if you are persistent), but it was an eye opener for everyone concerned. A lot of the charges were "errors in coding" -- such as the pregnancy test for an 80 year old man -- but they would not have been caught if he had not caught them.

[libertylover]

I generally like your idea but I have a problem with the term, "unnecessary test", since the only way you ever know any test is unnecessary is to perform the test and look at the results.

However, this leads to one aspect of the cost of treatment that the article omits, namely, the effect of law suits.

Look at a test from a doctor's position. Suppose he/she has a patient that might have XYZ Disease. Though it seems unlikely, the doctor orders an expensive $1500 test, is negative, and thus the doctor has increased the cost of healthcare for everyone by ordering an "unnecessary test". On the other hand, if the doctor, through his/her training and experience, judge the odds low of XYZ Disease to be present and does not order the test, but later XYZ Disease turns out to have been present, then the doctor is in deep do-do. You can just hear pretty little Johnny Edwards telling the jury that, "To this crass doctor, my client's dead wife's life wasn't even worth a measly $1500 test...I ask the jury to award my client five gazillion dollars", and the jury would likely do so.

Without limits on jury awards healthcare expenses will always be too high.

BTW, I'm not a medical provider of any sort.

[xzins]

Hey, Milt. Based on the tongue-in-cheek rule -- "Expenses accumulate to consume the available income."

Makes sense to me be it a family income or a set aside pot of money by an insurance company to pay for medical care.

[EVO X]

Makes perfect sense to me.

Just imagine if everyone had to write a check to their health insurance company for coverage...

[sevry]

Another keeper. Thanks you for posting. Reminds me why I once read Friedman.

[AmericanChef]

It's disgusting how employer-paid insurance is abused by employees. Every twinge and sniffle requires a doctor's appointment and no doubt antibiotics. "Oh, but it's FREE!" Then, these same employees complain when the premiums go up so much they now have to foot part of the bill, even if the cost of their premiums are now - $18!! OMG, I HAVE TO PAY $18 PER MONTH FOR MY OWN HEALTH?!? THAT'S AN OUTRAGE!!

[Erik Latranyi]

Just imagine if everyone had to write a check to their health insurance company for coverage...

That is exactly what my company is looking into --- health savings accounts -- where the employee has greater control over the spending, thereby controlling the costs.

We looked into simply ordering prescriptions via mail rather than through a local pharmacy and savings were well over 50% regardless of the drug.

[beckaz]

BUMP for later read.

BTW who is this Milton guy? Does he agree with JohnFopKerry's views on healthcare? Cuz if not, then Terayyyzza told me a while back that he must be an idiot...

Someone help me please. (/SARC)