BACK TO THE FUTURE
We hear that W is proposing a new approach to health care. He wants to increase the use of Medical Savings Accounts. The citizen (or her employer, if she's lucky enough to have that kind of deal) puts money into the account tax-free, for ordinary day-to-day health expenses, and buys a large-deductible insurance policy to cover "catastrophic" medical expenses. The premium for that policy may or may not also be tax-deductible.
The advantages of such an arrangement are: (1) that it will be "portable" and available to people whose employers don't provide benefits, or who are self-employed or unemployed or have just lost a job, and (2) that it brings market forces to bear on the medical industry--that is, if the patient has to pay for a doctor visit or a lab test, s/he is likely to choose the least expensive one, and thereby encourage the medical industry to restrain its price gouging.
What nobody on either side of the discussion of this plan seems to notice is that it is almost exactly what we had in the 1950s and early 1960s. In those days, if you had health insurance on the job, it covered only inpatient hospital care--not doctor visits, inoculations, or prescriptions. But those, and all other medical expenses, were tax-deductible.
Why did we give up that system? Two major reasons: if preventive care comes out of the patient's pocket, s/he is not likely to get much of it, which makes the eventual consequences of not getting it very expensive. And if only care given in a hospital is covered by insurance, more and more procedures and tests will be done in the hospital. That's how market forces really work in the health market.
That doesn't mean the average medical consumer is a free-loader trying to get something for nothing. It does mean that, once s/he has paid a health insurance premium, s/he will do everything possible to make sure that s/he gets health care only in ways that are covered by that premium.
And remember, back then, health care was both cheaper and simpler. Doctors still made house calls. And charged ten dollars more for a house call than for an office visit. Both doctors and hospitals regularly wrote off the bills of uninsured or medically indigent patients. The medical industry really was restrained in its pricing by market forces, and always had been. Now, after 40 years of unrestrained price increases paid without question by private insurance and governmental agencies, the total cost of health care is far beyond the means of all but the richest citizens.
Arguably, we are getting more for our money (or the money of whoever is actually paying.) Chronic and degenerative diseases that our grandparents just lived with and eventually died with are now treatable, and those treatments give many of us almost ten more years of active and useful life. If we go back to the health insurance system of the 1950s, does that mean going back to the health care system of the same era? Are we really willing to do that? Let's give this some thought.
The advantages of such an arrangement are: (1) that it will be "portable" and available to people whose employers don't provide benefits, or who are self-employed or unemployed or have just lost a job, and (2) that it brings market forces to bear on the medical industry--that is, if the patient has to pay for a doctor visit or a lab test, s/he is likely to choose the least expensive one, and thereby encourage the medical industry to restrain its price gouging.
What nobody on either side of the discussion of this plan seems to notice is that it is almost exactly what we had in the 1950s and early 1960s. In those days, if you had health insurance on the job, it covered only inpatient hospital care--not doctor visits, inoculations, or prescriptions. But those, and all other medical expenses, were tax-deductible.
Why did we give up that system? Two major reasons: if preventive care comes out of the patient's pocket, s/he is not likely to get much of it, which makes the eventual consequences of not getting it very expensive. And if only care given in a hospital is covered by insurance, more and more procedures and tests will be done in the hospital. That's how market forces really work in the health market.
That doesn't mean the average medical consumer is a free-loader trying to get something for nothing. It does mean that, once s/he has paid a health insurance premium, s/he will do everything possible to make sure that s/he gets health care only in ways that are covered by that premium.
And remember, back then, health care was both cheaper and simpler. Doctors still made house calls. And charged ten dollars more for a house call than for an office visit. Both doctors and hospitals regularly wrote off the bills of uninsured or medically indigent patients. The medical industry really was restrained in its pricing by market forces, and always had been. Now, after 40 years of unrestrained price increases paid without question by private insurance and governmental agencies, the total cost of health care is far beyond the means of all but the richest citizens.
Arguably, we are getting more for our money (or the money of whoever is actually paying.) Chronic and degenerative diseases that our grandparents just lived with and eventually died with are now treatable, and those treatments give many of us almost ten more years of active and useful life. If we go back to the health insurance system of the 1950s, does that mean going back to the health care system of the same era? Are we really willing to do that? Let's give this some thought.
posted by WiredSisters at 10:10 AM
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