The Health Care Crisis and Why it was Inevitable

Since 1970, the health care industry has undergone a revolutionary change. Before that time people were overwhelmingly (about 70%) in traditional indemnity plans where patients pay a certain percentage of health care costs. With the passage of the Health Maintenance Organization Act written by Ted Kennedy (D-Mass), very quickly over 70% of Americans were covered by HMOs.

The structure of HMOs was also largely different than traditional indemnity plans. HMOs require primary care physicians to act as gatekeepers of advanced care and it empowered insurance companies to challenge the medical judgment of doctors. It restricted choice to those doctors and providers "in the network" and any care provided by outside providers, care that didn't follow the right regulations or didn't have the right referrals was simply not paid.

It is indisputable that we are currently in a health care crisis with skyrocketing costs and extreme customer dissatisfaction. It is never a good sign when medical providers have to market themselves on customer service. No other industry has to try to convince consumers that "we won't abuse you" and that "you matter to us". The current argument is that health care needs to be socialized because the free market hasn't worked.

First, the central principle of the free market is that the individual parties of a transaction are able to negotiate the terms of that transaction themselves. For instance, if I want to buy a car, I can negotiate with the dealer the terms of the transaction and the dealer can do likewise. If neither of us wishes to proceed, we can move on. Without free choice on both the provider and consumer in deciding terms of the transaction, there is no free market. There is no free market without choice.

“Is there a bad idea for this country that Ted kennedy didn’t have his hands all over?”

IIRC NO. He’s made a career of bad ideas.

We need to get Government totally out of Healthcare. There isn’t any other alternative.

The Leftist/Socialists will fight to the death to keep Government control, their control over the Trillions of dollars that is Healthcare in America today. It’s the money which equals control which equals POWER.

This nails it precisely. Give the consumer choice over EVERY PART of the health care process, and health care will become as cheap and innovative as computers.

there is not enough national market solutions for health insurance

because, there is not enough of an open national market for health insurance to operate in

because the largest body of health insurance reserves in the nation are not in an open market position, they are locked up in private plans of major corporations, unions and government at all levels

if all those reserves were free’d up into open market plans that all employed persons in the whole nation could select from, whether or not the selection was then subsidized by an employer, in full or in part

then premiums in those open market plans would be available at more reasonable rates, to small businesses and the self-employed, because they would be participating in the larger pools of risk, and reserves, that are now closed to them

two sets of things prevent this

1 - tax laws that favor employer, union and government plans - not a taxable compensation - while denying same income deduction for self-incurred health benefit costs to the self employed and others who buy coverage in open market plans

2 - state insurance regulations often have mandates that inhibit cross-state plans and try to dictate what a plan MUST offer

we can have better and more economical health insurance, nationally, if we unlock the reserves and the customers now locked up in corporate, union and government plans and require states to deregulate health insurance

corporate, union and government plans - their customers, and their reserves, proportionally - should be unbundled from the employers with each employee selecting the open market plan THEY want to be moved to - we would expect that initial ly employers would set the subsidy/compensation for the benefit at their current cost equivalent, allowing any excess to be paid into a health savings account

health insurance should have very little state regulation, with financial oversight moved principally to the same agencies as other financial institutions, like banks - where capital levels (reserves) are now stipulated against levels of liabilities (risk) but the products offered are largely set by the market

we don’t need national health insurance

we need an open national health insurance market - like we have for food, cars, computers, tvs, etc., etc., etc. and all workers unlocked from private or public segments closed to that open market

remember, you heard it here first

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