As a medical doctor, I’ve seen first-hand how bureaucratic red tape interferes with the doctor-patient relationship and drives costs higher. The current system of third-party payers takes decision-making away from doctors, leaving patients feeling rushed and worsening the quality of care. Yet health insurance premiums and drug costs keep rising. Clearly a new approach is needed. Congress needs to craft innovative legislation that makes health care more affordable without raising taxes or increasing the deficit. It also needs to repeal bad laws that keep health care costs higher than necessary.
We should remember that HMOs did not arise because of free-market demand, but rather because of government mandates. The HMO Act of 1973 requires all but the smallest employers to offer their employees HMO coverage, and the tax code allows businesses – but not individuals – to deduct the cost of health insurance premiums. The result is the illogical coupling of employment and health insurance, which often leaves the unemployed without needed catastrophic coverage.
While many in Congress are happy to criticize HMOs today, the public never hears how the present system was imposed upon the American people by federal law. As usual, government intervention in the private market failed to deliver the promised benefits and caused unintended consequences, but Congress never blames itself for the problems created by bad laws. Instead, we are told more government – in the form of “universal coverage” – is the answer. But government already is involved in roughly two-thirds of all health care spending, through Medicare, Medicaid, and other programs.
For decades, the U.S. healthcare system was the envy of the entire world. Not coincidentally, there was far less government involvement in medicine during this time. America had the finest doctors and hospitals, patients enjoyed high-quality, affordable medical care, and thousands of private charities provided health services for the poor. Doctors focused on treating patients, without the red tape and threat of lawsuits that plague the profession today. Most Americans paid cash for basic services, and had insurance only for major illnesses and accidents. This meant both doctors and patients had an incentive to keep costs down, as the patient was directly responsible for payment, rather than an HMO or government program.
The lesson is clear: when government and other third parties get involved, health care costs spiral. The answer is not a system of outright socialized medicine, but rather a system that encourages everyone – doctors, hospitals, patients, and drug companies – to keep costs down. As long as “somebody else” is paying the bill, the bill will be too high.