Oh, for the days of Jimmy Carter
Friday, December 2, 2016 7:51 AM
Everyone wrings their hands over the cost of health care, comparing the costs in the United States to lower costs elsewhere. Some of this is attributed to our litigious society, and I agree that a portion of our health care cost structure is attributable to this largely American condition.
I think the solution mostly lies elsewhere, however.
We tend to think that health care must be highly regulated in order to be safe. We blindly believe federal, state and local ordinances are necessary to assure your safety in a hospital. We accept inefficiencies in the system because we think this makes the system safer. This is not correct.
According to the Leapfrog Hospital Safety Grade (www.hospitalsafetygrade.org), 440,000 people per year in America die from hospital errors (2013 data). This compares to 33,636 people killed with guns in 2013 (CNN), which includes suicides.
There are many other matters related to human health that we allow to happen in a competitive manner with, in some cases, fairly light regulation. Restaurant dining is an excellent example. The CDC reported in 2013, there were “818 food-borne disease outbreaks, 1,062 hospitalizations, 16 deaths and 14 food recalls.”
This is not just restaurants, this is all food.
Another area with light regulation (on price, not safety) is the airline industry. In 2013, air carriers, including commuter airlines, recorded 39 deaths (NTSB). Almost any endeavor is safer than going to a hospital. And speaking of airlines, good old Jimmy Carter deregulated them with a stroke of a pen when he signed the Airline Deregulation Act of 1978. This freed up the carriers to set competitive prices, which have been the best thing to ever happen to air travel.
Air travel compared to those days is dirt cheap now, hence everyone flies. Jimmy followed that up by inking the Motor Carrier Act of 1980, which did the same thing for over-the-road trucking, which, again, has opened the floodgates for the delivery of goods from distant places. There were 3,964 fatalities involving large trucks in 2013 (NHTSA data).
A common cry concerning health-care is that the profit motive of the insurance companies causes the high prices. This is true to a certain extent, but what appears to be more of a problem is the formula-driven costs for everything from hospital beds to surgeries to hospital toilet paper (which I am convinced they pick up at a dollar store and charge $3 for it at the hospital).
In most cases, when a hospital wants to add beds or services, competing hospitals in the area are allowed to file protests and call for hearings. This is nothing but restraint of trade and in nearly any other business would be the cause for the opening of an anti-trust case. It certainly does not make the hospital experience any safer (see above).
Then, hospitals and insurance companies work from schedules of codes that price everything in a way that is not competitive. This is all done in the name of tradition and safety. On top of this, the user of the services of a hospital, you, has no say in the cost of the services. Again, this is accepted in the name of safety.
We need to have sweeping deregulation in health care, as in the days of Jimmy Carter. Let every hospital build as many beds and surgeries as they want. Allow them to buy all the CAT Scan and MRI machines they can stuff in their basements.
Then, we need a pricing mechanism that fosters competitiveness. It works this way. You have a lump in your throat. Your insurance company asks for three diagnosis. All three come back with throat cancer. Each hospital provides a fixed bid on what they charge for a regimen of treatment with a 99-percent chance of success. Your insurance carrier picks the lowest and there you go.
Another way to do it is for the insurance company to have a schedule of what they will pay for treatment for your diagnosis. They write you a check for that amount. You decide what to do with it – get the problem treated, go on a last fling vacation, whatever.
What I have suggested is borne out in plastic surgery. Plastic surgery regimens are some of the least expensive procedures available. Why? Because the patients, not insurance companies, pay for them. What is the death rate? One in 5,000. Or to make it apples to apples, 2.2 billion people would have to have plastic surgery in order for plastic surgery to achieve the same death rate as a regular hospital stay (reference – there were 23.5 million hospital stays in the U.S. in 2104 which works out to about one death by error for each 50 stays).
So, let’s summarize the 2013 data once again:
Death by hospital errors – 440,000 (approximately one per each 50 stays).
Death by guns (including suicides) – 33,636.
Death by large truck – 3,964.
Death by flying – 39.
Death by plastic surgery – 1 in every 5,000 procedures.
We have managed to concoct the most expensive, least effective and least safe system to procure and administer health care in the world. It needs fixing – but a real fix will involve less government involvement, not more.
Jim Thompson, formerly of Marshall, is a graduate of Hillsboro High School and the University of Cincinnati. He resides in Duluth, Ga. and is a columnist for The Highland County Press.