UNITING PHYSICIANS & PATIENTS AS A VOICE IN HEALTH CARE
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March 6, 2006
Dear Star Tribune Editor,
The March 6 Opinion Exchange features an article by state Senator Becky Lourey proposing that we cover the poor with MinnesotaCare and that we "ask" insurers to limit administrative expenses; on the opposite page is an editorial poking holes in Bush's health care proposals. I believe these two articles illustrate how limited our thinking has become in addressing a problem that is both a calamity for thousands of Minnesotans and a major drag on our economy.
Consider what needs to happen if we are to truly address the cost and accessibility issues of health care. Most (but not all) of us would agree with two premises about how to reform health care. The first is that the private sector does a better job than the government in providing services; the experience of countries like Canada and England shows that the cost of government-financed health care is rationing and limited access to quality care. The second is that we need to find a way to cover everyone; having tens of millions of Americans without access to basic health care coverage is unacceptable and should not be allowed to continue.
A solution to the health care crisis based on these premises must have two parts: a method of paying for services that rewards quality and reasonable cost, and a system to assure that every citizen has the financial resources to obtain the health services he or she needs. Neither of these elements work very well in our current system.
The problem with how we pay for health care services is that usually we don't pay for health care services! Rather, we rely on insurance or government programs to determine what providers should be paid and then we pay copayments, coinsurance, deductibles, premiums and taxes. Market economics have taught us time and again that efficiency and responsiveness is maximized when there's competition for customers; but for competition to exist, the customer must pay.
Academic studies have estimated that about one third of everything that is spent on American health care is for administration; the vast majority of this is due to our third party payment system. Providers are forced to provide services that fit into the codes that will be reimbursed, making them less responsive and flexible in meeting patient needs, and they need complicated administrative systems to bill and collect reimbursement. If we paid directly for our health care services, providers would not just be price competitive, as the Star Tribune editorial observed, but would also be more responsive to our needs and have much lower administrative costs.
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