Friday, February 11, 2011

Hybrid Healthcare

by David L. Alvord DDS

Whether it's the Toyota Prius, or Napolean Dynamite's favorite animal, the Liger (they do exist, BTW) we are all becoming more familiar with hybrids.

But not all hybrids are destined for success. While combining peanut butter with chocolate may be a "Reese's dream come true", trying to combine other things, like vegetarianism with Tony Roma's all-you-can-eat ribs may not work as well.

So it is with healthcare. We have two approaches to healthcare: 1) a government run system, or 2) a private or free market system. The United States is trying to run a hybrid of the two.

Yet, the two systems cannot be successfully hybridized, at least not for long. There are several reasons why this unholy alliance is destined to fail. I would like to point just a few of the very obvious contradictions.

Great Expectations

The patients in a free market healthcare system expect to pay for the care they receive. Like any product, the more they pay, the better care they get. The patients may shop around, they may bargain, but in the end, they expect to have to pay their own hard-earned money for the services they receive from the care-giver. There may be a disparity in the level of care, but the patients take comfort in fact that the care they received was equal to the money they paid. Maybe they pride themselves in getting a "good deal", but they still are expecting to pay in the end. If fees are perceived to be too high, they go elsewhere, unless they are convinced that the care is just that good.

The patients of a government-run system expect not to pay for healthcare. They have paid taxes, Social security, or Medicare taxes all their lives, so they expect not to pay any more into it. Money is taken from their paychecks, and so they expect the care to be free.

The expectations of the two patients are not aligned.

Rationing of Care

Healthcare must be rationed. The GDP of the United States is 14 Trillion or so. It's obvious that all 14 Trillion could not be spent on healthcare. So it has to be rationed, or limited in it's expenditures to some extent.

In a free market system, people ration their own care. They decide for themselves just how much to spend on doctors bills. If an aging woman wants to live to see the 2020 Olympics, she can elect to pay for the best care available even if that means leaving no inheritance to her posterity. And if that is her choice, so be it. Another person may try to live as healthy as possible, to minimize doctor's bills. Some may elect to go down in a "blaze of glory" eating as much fried foods and exercising as little as possible, knowing full well that they will have to pay for any vascular problems that lifestyle may imply.

Imagine a family that had to choose between paying for cancer treatment for their 80 year old grandmother, or an organ transplant for a ten-year old boy. In a free market, the family will choose for themselves which to spend the money on. The family may elect to sell some assets to pay for both. But the decision rests with the family. They will ration their own care according to their desires and needs.

A government run system would also have to ration care. Sarah Palin's so-called "death panels" are a necessity in a government run system. Governments, like families, do not have unlimited funds. The State will have to make the terrible decision of who lives and who dies, or who gets treatment and who is put on a wait-list. It may seem like governments have a lot of money, but when you make the government responsible for 300 million people, the money has to be divvied out somehow. Most people will want the care to be equal for all. It takes great faith to trust that the government will be perfectly equitable to all her citizens.

Further, an equal disbursement of healthcare would mean that no matter what you did FOR society, you will get an equal take FROM society. Is that really the definition of equality?

Make no mistake, healthcare is a commodity that must be rationed. The question is: Who will be making those decisions?

A hybrid system cannot reconcile this conflict.

The Grass is Greener

In a hybrid system, the advantages of each system are on display. Each will want the advantage of the other. The people getting socialized healthcare will envy the level of care offered in the private clinics. The people paying high fees in the private sector will envy those who are getting free care. In a hybridized system, taxes pay for those on government care. Use a private clinic and you are not taking advantage of what you paid into. It's like sending your kids to a private school. The grass will seem greener on the other side of the hill. Politicians will work to bend rules and regulations to appease both parties. Arguments that tug at the heart will be presented: "We need first-class care for our veterans", or "Our nation's kids deserve the best". The people receiving Medicare will want to be seen in private clinics and "keep their own doctor". The Mayo clinic is a great place for care, but it costs a lot of money to have a "team of doctors" on your case.

A hybrid system will create an environment where people will want the best of both worlds, leaving everybody pretty disappointed.

How have we managed this hybrid for so long?

America is trying to run a hybrid system. Ever since the inception of Medicare and Medicaid, we have been trying to have both systems. What has kept it alive? Our growing national debt. Politicians have "kicked the can" down the street and no one has really dealt with it. Obama is trying his best to "deal with it", but unfortunately he is trying to push it the way of the government run. He is stacking the cards against the free market and putting 2000 pages of legislation that will eventually drive us away from the private.

Eventually, our nation will have to choose one system or the other. They both can't coexist for long. I hope we choose the free market. It has the potential to provide better care for everybody. Innovators will bring better care for less money. The care will still have to be rationed, but you'll get better bang for your buck if we let people make a profit to invent and innovate new cures and new technogies. The possibilities are endless with capitalism. Socialism offers, at best, equality of care, but not much hope for advancement.

What was Romneycare?

Romney was governor of a State which had the hybridization healthcare already in place. But there were people showing up to the emergency rooms uninsured and basically taking advantage of those who were insured. He found that 95% of Massachusetts' residents were already insured. So what he did was push those 5% to get insurance (private insurance). If you were to look at it like a Toyota Prius, he took a hybrid and put better wheels on it, and made the gas engine run more efficiently. Romney made it run a little more like a gasoline engine. He wasn't in a position to take a sledgehammer to the prius and replace it with a better kind of vehicle. That kind of reform would have to come on the federal level. After all, it was the feds who created the hybrid healthcare economy. His was never the intent to expand the government run system of healthcare. Bottom line: Romney expanded the private sector of healthcare in his State, and did so with the blessing of the super-conservative Heritage Foundation. Since Romney's departure, others have tweaked MassCare a little more back to the socialized side of things. Romney can hardly be blamed for what others have done since he left.

Obama's claim to have emulated Romneycare is politically calculated to harm the primary chances of the President's biggest rival: Mitt Romney. The intent of Romneycare and Obamacare couldn't be more distinct. The intent of the former is to increase the private sector, while the intent of the latter is to increase the government's influence.

Mitt Romney is a man who believes in capitalism and the free market. It is in his DNA. Sometimes you have to deal with the hand that is dealt you. Just because he was handed a Toyota Prius, you can't fault him for wanting it to run a little better for his State. We need a pragmatic problem-solver like Mitt to reform healthcare on a National level. The current system is not sustainable. Romney will use free-market solutions to repair what's spinning out of control here in America. Frankly, don't we need someone with a little experience looking at the problem of healthcare? Obamacare can't simply be repealed, it eventually needs to be replaced with something better. Romney has looked at healthcare in depth and has a good grasp of how to tackle this growing problem.

The can has been kicked down the street for too long and it's time our country dealt with these major problems. We need to undo the FDR entitlements and return to our more pure free market ways. We need to push back against big lawsuits against doctors. We need to encourage innovation. We need to send Mitt Romney to the White House. The freedom to make decisions concerning healthcare should always rest with the people.