I Just Fixed Health Care

November 2, 2009

A couple of weeks ago, we talked animals, medical malpractice, and veterinarians. Turns out, a lot of you are animal lovers. I hope you’re also health insurance lovers, because that’s what we’re talking about today.

I got lots of interesting responses to that post. A really interesting comment said that I’ve been brainwashed by the insurance companies.

I teased you with a comment in that post that a big reason our medical industry is in the shape it’s in is because many Americans are such big babies. I thought I’d follow up on that. Here’s is my complete, one page bill which I am preparing to send to Congress to help fix healthcare:

My Solution to Fixing Healthcare

1.) Get rid of Insurance.
2.) That’s it. Problem solved.

I’ll be perfectly blunt. I hate health insurance. If you work for an insurance company, sorry, but I don’t hate you. I also hate Indian food. I have no problem with Indian people, just their food. Health insurance is like Indian food.

Last year, my wife had a minor procedure in the hospital. Good thing we pay astronomical premiums and thus have a relatively low yearly deductible…

…Oh wait, all this stuff doesn’t count toward the deductible, as I can now see in these hundreds of pages of fine print! Well I don’t mind paying twice what I thought our deductible was for a minor procedure! That’s what insurance is for! We pay for insurance, and then pay for our health care anyway, just so the poor insurance company won’t be burdened by us little people!

In reality, I’m not saying we should really abolish all insurance. But every argument about health care is a debate about how to pay off these astronomical prices, and no one is talking about just eliminating the really expensive, useless middle-man. So I will.

In my ideal world, we’d go back in time 50 years. So all I need to fix health care is a time machine. I’ve got the high bid on eBay right now…

Fifty years ago, people didn’t have all the insurance of today. At the most, average people had catastrophic insurance. So if you had to go to the hospital, you’d be helped out. But if you were just going to the doctor, you paid for that yourself like everything else you’d buy.

A peculiar thing happened. Doctors raised their prices, as every business does. And people cried about how it was getting too expensive. And who should come to save the day? Insurance! So gradually, people got the idea that health care is something someone else should pay for. They gladly paid someone else to pay for their healthcare, so they’d never have to think about if a trip to the doctor or some pills was really necessary. (That’s the crybaby part.)

Please refer to the figure to the left, the first health insurance agent, Actuary McMonkey McBean, complete with car full of money spent on unnecessary cosmetic surgeries.

But what if people didn’t buy insurance for doctor’s visits? What if they decided to buck up and pay for their own health care? They wouldn’t go to the doctor so much, because they wouldn’t be able to afford it. And what would happen? The same law of supply and demand that has dictated every other business model since the invention of money would take over and doctors would have to lower their prices to stay in business!

What if McDonald’s suddenly raised the price of Big Macs to $63.00? (That’s about 20x the price, for you non-Americans and your non-crap money.) People wouldn’t buy them. If McDonald’s wanted to stay afloat, they’d drop the price to a point people were willing to pay.

But say I’m an industrious insurance salesman. I could offer to pay for someone’s $63.00 Big Mac (for a smaller fee.) I’ve now created a safety net for McDonald’s, where they don’t have to follow the universal rules of economics. They can keep their high prices, and the only thing Big Mac eaters have done is given lots of money to people who don’t deserve it. Sounds absurd, but if people decided that Big Macs were that important, it could happen.

That’s [one of] the problems with healthcare as I see it, (and it’s the same problem that has caused virtually every American financial bubble in history.) Healthcare is not worth what is being paid for it. Insurance creates a safety net where the prices never have to come down, because there will always be someone to pay those high prices.

Would lowering prices hurt healthcare workers? Yes, the same way that saving the American auto industry has hurt auto workers. That’s just how it goes. I’m sure there will still be enough money to go around.

That’s just my solution, and I’m not saying it’s a complete one, or even a well-researched one. It just makes sense to me. There will always be people who fall through the cracks who need help though, and I don’t want to sound like I’m saying ‘tough luck’ to them. What say you? Do you like your insurance? Hate it? Don’t have it? Are you an insurance worker? If you’re outside the US, what positive/negative things might we learn from your country’s system? Anyone want to pay me to buy them McDonald’s?