Health care, businesses and the big black hole

By Jack E. Lohman

Picture this.

You own a manufacturing company, and all of a sudden you’ve found a big black hole in which 31% of the price of your product is being consumed by an unneeded, outside middleman.

It’s not something you purposely did, it’s been there forever. A historical flaw in the system. But it’s a chunk of expenses that, if eliminated, wouldn’t alter your product a bit and would immediately increase your customer base by 15%.

Your choices are to (a) keep doing the same thing, or (b) plug the hole.

That’s where we are today with health care, and everybody is paying big bucks for our current, inefficient mess. We are all paying for everybody’s health care — one way or another– in unnecessarily high premiums, cost shifting because of someone else’s emergency room visit, bankruptcy costs that are added to our insurance and interest rates, and on and on. Even the poor who receive so-called free healthcare services, fully reimburse the corporate payers when they purchase product at the cash register. There is no free lunch.

The current healthcare system started innocently enough, when during WWII the government started giving businesses a tax break for the insurance coverage they provided to employees.

And it worked well, for a while.

But in today’s globalized economy it has become a severe burden on businesses, many of which have decided to simply outsource their jobs (and inadvertently, our sovereignty) to other countries that do not penalize employers with healthcare costs.

Compare Canada’s $800 yearly employer costs to GM’s $6500 and it’s easy to see why the Big Three automakers now manufacture more cars in Ontario than they do in Detroit. Try to find a TV or kid’s toy or clothing made in the United States. It can’t be done. Food is now high on the import list, and even steel from China is being used to build the fence between the US and Mexico.

Is this what we want our country to be, a consumer-only nation akin to third-world countries?

You’ve heard this before: the insurance bureaucracy is the elephant in the room. The Rockridge Institute argues (pdf version) that the role of insurance companies requires a profit motive, and that in turn requires maximization of income and minimization of services, in some cases getting paid for care but denying services. Contrary to all other competitive services, where maximum value is a benefit, the insurer’s mandate is to provide exactly the opposite without harming its business. It survives by getting paid for care it can avoid providing.

No intelligent business leader would intentionally design such an awkward system, but it is what it is because our politicians have been paid hefty campaign contributions to protect the status quo. Of course that’s a part of our political system needing reform, a story for another day. No other country in the world has a health care system like ours, but to be fair, neither does any other country have a political system like ours.

Many advocates, me included, argue that the insurance bureaucracy can and should be totally eliminated, and doing so would advance the business climate and economy of the state. Next steps would include reinstating the certificate of need to control hospital growth, and tackling the overuse and fraud in the system. There can be no better way to protect this vital resource.

In the end it’s up to the politicians, and whether they are willing to set aside those biases created by our moneyed political system. It’s time for them to act.

See the COMPLETE printable article HERE (requires PDF reader)

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