A Different Way

to look at Life, Health, Business and Politics

Supply-side Solution for Healthcare

Posted by Marietta chiropractor on July 16, 2008

One of the things that made the 80s such a vibrant era is Reaganomics, or supply-side economics.  The gust of the program was to lower taxes to give producers more of a return on their investment.  As a result, more money would flow into the economy as business owners strove to grow, deliver more products and services and, hence, more profits.  Obviously, it worked.  That era spawned an economic boom that lasted amost two decades.

While the upcoming election and high gas prices have the public’s (specially the media) attention, rising healthcare costs remain a burden on American society.  Between pension and healthcare costs, major American employers like General Motors teeter on the verge of bankruptcy.  Yet, we continue to pursue solutions that will necessarily perpetuate or exasperate the problem.  Most politicians these days support MORE involvement by the Government to ensure “adequate” insurance coverage for every American citizen.  But, increasing third party reimbursement of healthcare services is neither warranted nor advised.

One of the hallmarks of free market economies is that competition forces down prices, improves quality and quantity of goods and services available for consumption.  Restrictions on competition (even in the name of public protection) keeps prices high, limits consumers’ choices and ensures less-than optimal quality.  That’s where we are today in healthcare.

Managed care has done an outstanding job of limiting consumer’s choices of health care providers and options while forcing the continual rise in health care costs.  Many Americans find themselves working in jobs they’d rather not have JUST to pay the exorbitant cost of health insurance for them and their families.  Despite the fact that premiums keep rising (as do health costs) consumer’s out-of-pocket expenses also continue to rise.  Insurance companies are paying less and requiring more from their customers.

There are several reasons for all this.  But, most of the problem lies with Government interference in the market.  Most states have certain mandates for employer provided health benefits.  This forces employers to provide the most expensive option available or the most restricted coverage or none, at all.  Many predict that employers will continue moving away from providing health insurance for their employees and even require them to maintain their health in order to keep their job.

What’s the solution?  Abolition of managed care would be a good start.  Another would be for insurance carriers to adopt an ‘any willing provider” approach to foster competition.  It should be clear to virtually anyone that in-network providers cost more and give less than out-of-network providers.  Simply allowing competition among qualified, licensed providers would allow competition to both lower the overall payment rate for insurers while increasing the level and quantity of services available to their customers.

Further, states should remove any restrictions on health care providers offering different types of fee plans.  Some states intimidate providers that offer creative plans (such as unlimited care at a fixed fee, or reduced fees for cash payment or prepayment plans)  directly to consumers.  In effect, those states are protecting the interest of insurance companies and NOT that of their citizens.

States and the Federal government should remove as many barriers to providing health care as they possibly can.  Protection of industry interests over the interest of the ultimate consumer is both counter-productive and could eventually lead to the Government taking over health care.  And, do you want the sponsors of Social Security, Medicare, Katrina and No Child Left Behind in charge of YOUR health?


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