• What to do about Healthcare?

    My buddy Sean Tierney recently posted on taxation for fast food. The topic touched on the health insurance debate presently taking place. I posted a wall of text to his comments section, but I thought I would repost it here since I’m interested in what people have to say about the future of American healthcare.

    First, let me give you my political perspective. I’m an Independent, but I’m also a big believer in free-market principles and smaller government, which my educated friends tell me are Republican ideals. I’m the kind of person who doesn’t mind paying taxes and seeing them put to use for the greater good, but I don’t trust government institutions to make these decisions very well. In my experience, government is great at slowing things down and making them harder, which is why I believe they should continue to be in charge of regulating the free market, but doing so at arm’s length. I also think the government is a necessary evil where there is no viable business model for a service needed by the public.

    So with that in mind, let me present my healthcare proposal.

    Max’s Healthcare Proposal
    I’d like to see healthcare insurance go the route of car insurance, using the same free-market principles but putting the responsibility on the people and not the government.

    Start by reducing medical costs by making it possible for doctors to charge less for their services. Obvious solutions include malpractice tort reform; that bit will probably require the government to get engaged, but perhaps not at the federal level.

    Once doctors can charge less and operating costs are lower, insurance companies can charge less for their health insurance policies. At this point, my employer should increase my salary by some portion of the amount they used to pay for my health insurance. I’ll then take this money and will go shopping for health insurance on my own, just like I buy my car insurance.

    Insurance carriers will be forced to offer competitive pricing and innovative methods for cost reduction to win my business. This will include removing bureaucracy, simplifying billing practices, and implementing efficiencies in their own organizations (probably with technology). Likewise, doctors can innovate to offer affordable care, allowing them to better compete for my business and be innovators in cost reduction also using similar means. Dinosaurs who don’t want to change will go out of business; good riddance.

    With those changes in place, it’s now up to me to take care of myself. If I eat crappy food, smoke, and don’t exercise, my medical and health insurance costs will be higher, financially motivating me to change my behavior. If my behavior doesn’t change, eventually economic forces will leave me no choice but to change, or I will die and remove myself as a problem. If my behavior does change, the tobacco and unhealthy fast food companies will suffer as they lose my business; they will also either change their products or die. Once again, good riddance.

    This leaves open the issue of the uninsured. This is where the government would be involved once again, offering some solution that would probably need to be paid for by taxation or reduction in costs elsewhere. I think these are reasonable solutions to this problem.

    Obviously, I’m drastically oversimplifying what would be a long and difficult process, and a lot of things would have to happen in sequence with proper effect to make this work. To be honest, I don’t know of another solution that would enable the free market to solve our healthcare crisis, and I’m pretty sure based upon past experience that the government won’t be able to come up with a solution that doesn’t suck.

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