Health Care In A Free Enterprise System
November 6, 2005
Americans have access to the greatest health care system in the world. Most of us have been recipients of the system and we appreciate it when we need it. Royalty from all around the world including Middle Eastern countries like Saudi Arabia have long come to the United States for medical treatment. Why have they not gone to Canada, France, China or Russia? Could it be that America has the world's finest health care system and treatment centers in the world? Why might that be? In Canada, home of socialized health care, there are those who boast that urgent cases get treatment in a timely manner. If you lived in Canada and you were to injure your leg playing in a football game and your doctor recommends an MRI, your wait for an MRI is several months. In the Untied States, in most cases, you will be able to get the MRI within a week or sooner. In nations that have implemented a socialist health care system, a timely response and the degree of quality health care comes into serious question. When there is no incentive to produce, or profit, production of something gets done without efficiency, and efficiency saves lives.
We have been privileged with the health care system we have in the United States, not that United Nations willed it or the U.S. Congress regulated it that way. We have it because our system allows those working within the system--doctors, nurses, medical scientific researchers, other health care providers and personnel-- to work as professional entrepreneurs in a free enterprise system. We are realists when we recognize that in America, whoever is in charge of paying for health care, will ultimately be responsible for the quality of care Americans receive. If you pay for your own health care, either directly or through your insurance plan, then the physicians and medical professionals who serve you are, in effect, your employees. That is just the way it is. However, in a system where the government pays for your health care, you are not the one in charge but the employing agency that pays the bill is in charge of the medical providers. And looking at it logically, when you add a middle man, you add costs and remove efficiencies.
Renowned Harvard University professor Joseph Newhouse conducted a study concerning the medical spending habits of 8,000 people in the United States. He investigated to determine whether asking people to pay in part for their own health care caused a reduction in their demand for health care AND whether their decisions, if any, to forego health care resulted in any harm to their health. The results were enlightening and understood by anyone who understands the basic rules of supply and demand. The study found that those who had to pay for their health care consumed 50 percent fewer medical services as did those who received the same services for "free." Also, those who received "free" health care had hospital admission rates 30-50 percent higher than those who paid some part of the health care which was provided. But did those who were more selective in their choice of when to call on health care suffer because of it? Strikingly, the study concludes, "of those who paid all or part of their own costs, there was NO difference in their quality of health, despite the comparative difference in use."
Even in the United States, government's recent entry into the health care market has dramatically expanded the volume, intensity, and price of heath care. First, by bidding up the price of health care with a payment system that encourages excessive utilization and spending. And secondly, imposing cost containment measures that lead to cost shifting, and thus inadvertently increasing the cost of health care to other buyers as well as changing the way health care is ultimately delivered. In so doing, over regulating has contributed to a process that has priced health care and health insurance far out of line as compared to where it would normally be if the rules of the free enterprise system were allowed to freely operate. And it is the American public who pays the bill in fixed tax cost and frustration.
We believe that the free enterprise system, based on demonstrated values, is a driving force of energy in our society. Individual medical health accounts may very well be a vital initiative worth examining. And the sky rocketing costs of malpractice insurance for physicians and the need of tort liability reform are essential topics yet to be discussed in a subsequent column.
Encompassed in our capitalist system is the vital role of principled charitable and volunteer organizations. These organizations, with their caring hand and willing heart, are there to support "just what is needed at the right time." Many of us can attest to that! And lastly, but when necessary, the role of government comes into play as the vital safety net in "trying" situations. However, in every case, the worth and dignity of the individual must be protected. In the words of Ronald Reagan "Government's first duty is to protect the people, not run their lives." That is how we see it FROM OUR PERSPECTIVE.