True Healthcare Reform

With the health-care sector now representing over 17% of the U.S. economy, it is expected to grow to 19.3% of GDP by 2019. Likewise, while the real estate market is in a state of deflation, the health-care sector is in a state of inflation. Thus, the U.S. economy is schizoid.

Under ObamaCare, money will be sucked out of the overall economy, and will be funneled into the healthcare sector. This will exacerbate deflation of the overall economy, and add fuel to the inflation fire raging within the health-care sector. Under this scenario, the impact for ordinary Americans will be disastrous.

Within the health-care sector, there are two sides of the equation -- insurers and providers. Both involve monopolistic entities. The politicians -- Paul Ryan, Mitt Romney, Barack Obama -- have devoted most of their attention to insurance reform. All three men are terribly misguided.

Whether we talk of RyanCare, RomneyCare, or ObamaCare ... none of these three reforms address the problem of the provider side of the equation -- namely the lack of adequate competition amongst the providers to help lower costs for the insurers (and for the patients, too). Paul Ryan brags about his market-based solutions for private insurance; yet he ignores the reality that the provider-side of the equation will remain monopolistic in nature.

The Rockefellers, during the early 1900's, were instrumental for having decreased the number of medical schools and thus, limiting the supply of doctors. Today, with the AMA, there has been continued pressure on Congress (via laws, regulations, and licensing restrictions) to keep the number of doctors below a certain level so as to limit competition and maximize profits.

Likewise, the AHA (and other hospital lobbying groups, too) had influenced the ObamaCare legislation to essentially eliminate physician-owned hospitals. The for-profit hospitals (and the giant non-profits, too) did not like the doctor-owned hospitals being able to compete against them. Now with those type hospitals to be phased out, this is bad news for the consumer.

Particularly with RomneyCare and ObamaCare, these reforms will result in an increase in demand for care from the providers, yet no increase in the number of providers. This is a recipe for higher prices, higher taxes, the rationing of care, and the eventual bankruptcy of the insurance industry. (We will wind up with single-payer.)

Meanwhile with RyanCare, a better solution for Medicare reform would be to focus on the provider-side of the equation first. Bust up the monopoly! We need an explosion of new medical schools, new doctors, new hospitals, etc.

The status quo is unacceptable. The so-called reformers are merely enshrining the sclerotic monopolies. This is a stranglehold that is killing innovation, competition, and consumer choice. The hospital industry is like the teachers' union. They resist the new charter hospitals (i.e. physician-owned). The industry wants to be "too big to fail." When a hospital serves a community without adequate competition, they cannot be shut down ... ever!

The other problem with RyanCare is his privatization scheme. Unfortunately, the GOP's version of privatization involves the conversion of a purely government agency into a private-public partnership along the same lines as Fannie Mae and Freddie Mac. These type of entities invite corruption. Whenever you have the marriage of corporation and state, you have what's called corporate socialism.

Under Ryan's Plan, private insurance companies will be receiving taxpayers' money in the form of premium support subsidies. The government will be deciding which insurance companies would qualify for such subsidies. The politically-connected entities would get special treatment. You'd get such situations as regulatory capture. This would ensure oligopoly status for the big players. (It'd be bad for us consumers and taxpayers.)

Maybe we should regard health-care insurance in the same way as infrastructure. The public highways are payed for by our taxes. So why not insurance? Why not Medicare for all?

But if we were to have single-payer insurance, it must be the bare bones minimum with high deductibles. And the insurance must be for catastrophe only (i.e. hospital insurance). There must be skin in the game for the consumer. With the high deductible, it'd be used in conjunction with a health-care savings account (HSA). Likewise, charitable organizations would play an important role for helping out with the deductible for the lower income folk.

Then for those who want it, people can purchase supplemental insurance from private companies for comprehensive coverage. This would cover for things like drugs and routine doctor visits.

Now getting back to the provider-side of the equation, with increased competition -- there'd be a dramatic improvement in the overall economy. We'd be having a dot.com type of explosion in GDP within the health-care sector, lower prices for the consumer -- hence affordability.

Capitalism works wonderfully for the computer/technology market. Consumers can afford high-tech gadgets at extremely affordable prices. This is what we want for health-care. Free enterprise is the answer.

http://prescriptions.blogs.nytimes.com/2010/02/04/us-health-care-spending-rose-at-record-rate-in-2009/

http://kellyrek.blogspot.com/2011/06/healthcare-scam.html