Medical Care Reform

Much has been made about the state of the U.S. health-care system. While the American health industry provides the best medical care in the world — with unparalleled screening procedures, drugs and surgery — many consumers have quarrels over the cost of attaining some of the aforementioned treatment.

Some have suggested that the cost of insurance is even high enough to leave 43 million Americans without coverage. However, when broken down, the actual number is dramatically less.

Out of that 43 million uninsured, approximately 10 million of those individuals are illegal aliens. Furthermore, a discernible percentage of that 43 million are young, college-aged students who would rather forego medical coverage; choosing to save funds rather than spend it on premiums. Lastly, and probably the most significant, 20 million of that 43 million, approximately half, go without health insurance coverage for fourth months or less. Ultimately, the bulk of the highly touted “43 million uninsured” number refers to the short-term uninsured, and not to significant systematic problems with securing health insurance. While it does leave about 10-15 million Americans uninsured for possibly longer periods of time, it is in no way a national crisis which needs to be resolved with extremist policies (i.e. the nationalization of the health system).

Therefore, the central debate does not focus around the quality of our health care, but rather the affordability of the system. Price is meant to be the ultimate rationing tool, allowing markets to run efficiently and provide that a person who values a resource the most will have the ability to acquire it. However, price for health care has been aggrandized to the point where it no longer reflects just the cost of the procedure, but rather the salaries of employees at insurance companies, gigantic federal subsidies in the form of Medicaid and Medicare creating artificial demand for negligible treatments, and frivolous malpractice lawsuits that drive up insurance premiums on practicing physicians. All have an inflationary pressure on the price of health care, and all need to be resolved by promoting a system where the patient/doctor relationship is strengthened not just treatment-wise, but also in terms of payment for medical care.

In the United States, we must fundamentally alter our methods of purchasing health services. The extent of health insurance now is quite encompassing. Because of this reality, every health care purchase is done through an insurance network. It funnels through multiple levels of bureaucracy, both in government and in private enterprise, accumulating the salaries and work of countless individuals.

Because the transaction passes through so many hands, the processing cost is reflected in the price. A way to alleviate this is not through more government subsidization or regulation, but rather through Health Savings Accounts. An HSA allows citizens to transfer tax-deferred income into a personalized account used for health care expenses. Therefore, instead of paying through your insurance company, a consumer can pay for routine procedures out-of-pocket, cutting down on transactions costs by not having to file through your insurance provider. Couple this with a low cost, high deductible catastrophic-coverage insurance plan and health care costs will see a dramatic decline.

The expansion of government in our health care system has only led to inflated prices. If we restore the market to a two party transaction, costs will decrease and more individuals and families will enjoy confidence in their health-care coverage.