market based health-care: The doctor, not the patient, orders the care. There’s no easy exit from the market for patients.

Saturday, August 18, 2007 by The Toledo Blade | Tax-Financed Health Care Offers More Value | by Johnathon S. Ross

Shame on all of us, especially those of us in positions of public trust. Forty-five million of our friends, family, and neighbors, including 1.3 million Ohioans, have no health-care coverage at all.

Tens of millions more are at risk of bankruptcy even though they have insurance. Their coverage is too skimpy to protect them financially.

What do the current conservative leaders of many states and the nation have to say about the fact that we spend twice as much as any other industrial democracy in the world and yet fail to cover 16 percent of the population? To paraphrase Marie Antoinette, “Let them buy high-deductible health plans.”

But who are the uninsured? They are mainly (75 percent) lower-income working people and their kids. Most of these folks struggle to keep food on the table and the lights on. They can’t afford even bare-bones policies.

What are the facts, not the hype, on market-based reforms such as Health Savings Accounts (HSAs), high-deductible health plans, and mandated insurance (a la Massachusetts)? These represent the next bogus effort to keep private insurers in charge of our crumbling sickness care non-system. Remember how they promised that a competing insurance market of Health Maintenance Organizations was going to save American health care?

Unfortunately, despite the nostrums of the market ideologues, health-care costs have continued to soar at twice the growth rate of the gross domestic product while 10 million more have gone uninsured. Pound as they might on the square peg of market forces, health care will never be a nice round market commodity.

Why? The consumer’s not sovereign. The doctor, not the patient, orders the care. There’s no easy exit from the market for patients. When critically (and expensively) ill, you buy or die. The most expensive health care is not necessarily desired. If open-heart surgery were on sale would you have two?

There’s often inadequate information to make wise purchasing decisions. Sometimes the best doctors are unsure of the wisest course of action for a patient. It is the uncertainty of illness and its attendant costs that creates the need for insurance in the first place.

The profit motive runs contrary to the best cooperative and Samaritan traditions of medical practice and training. There are lots of natural monopolies. Should we build another hospital in Bowling Green so that the competition will leave them both half-empty? The market for medical services fails these tests of an effective market and will fail in the guise of health savings accounts.

The 10 percent of patients who are very ill generate 70 percent of the costs, averaging $39,000 per year. They will never save anything in their HSAs. Studies confirm that high out-of-pocket costs, the hallmark of HSAs, yield worse health outcomes for the poor, elderly, and chronically ill.

The health-care bureaucracy already consumes 31 percent of spending. The fees for tracking 300 million individual HSAs would only aggravate this shameful waste.

Half of personal bankruptcies are due to uncovered health-care bills, again the hallmark of HSAs. Even boosters of HSAs (Mckinsey and Co.) find 56 percent of employees less satisfied with their new accounts than their old health plans. ...
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The Institute of Medicine estimates that 18,000 Americans die each year from lack of health insurance alone. ...