Fix American Health Care By Fixing the Market

American government policy has made a mess of medical care. But, predictably, the politicians — and this is truly bipartisan — do not blame themselves.

Governments never blame themselves. The Soviet government’s policies caused mass starvation and industrial collapse, but did they blame themselves? Hell no. They blamed the only people who knew how to make the farms and factories run. The engineers and specialists, so called “spetzi”, were labeled wreckers and class enemies of the people, imprisoned in the gulag or shot. That didn’t work out well for anyone.

At a time our free market medical system was developing CAT scanners and MRIs, 50% of Soviet hospitals had no hot water (25% no running water at all). But here we go again. The government is blaming the “spetzi” — unscrupulous physicians (and all physicians are potentially unscrupulous in the eyes of Medicare), hospitals so brash as to want to stay in the black, instrument manufacturers, insurance companies, and even occasionally lawyers (probably just for comic relief).

Physicians are the “canary in the mine” of bad fiscal policy. They are one of the last true cottage industries. Doctors run small businesses which are losing income daily while facing escalating overhead. Added to that, they are being sued, licensed to death by multiple government and professional agencies, and regulated beyond reason.

The Bolsheviks (and now the Democrats) are very good at the class envy game — it is easy to drum up envy against anyone with a shinier car — even though they earned it by hard work. In a democracy, we do not shoot our “class enemies” — we label them “rich” and tax them out of productivity. The average physician makes $230,000 per year. He or she works 60 to 80 hours a week for those dollars, often in the middle of the night, and with considerable sacrifice of family life and personal well-being. Taxing these producers at the 50% marginal rate (which it is today when you add all state, federal and local taxes) means that 40 hours a week of labor is given to the government.

Those politicking on class envy are always aided by “useful idiots” such as George Clooney or even Warren Buffet, who are so rich that taking 50% of their earnings does not make a difference in their ability to educate their children in top-notch universities. The CEO of Oracle with his $84 million salary has no problem promoting the liberal agenda of progressive taxation, because his social life does not miss a beat with a 40 million dollar tax bill.

Those who are harmed are the “spetzi” — the people who make the factories run, provide medical services, the small business owners who create jobs. For them, at some point, investing in education or taking a financial risk to start a business is not worth it.

Already, physicians are retiring early, and medical students are avoiding those specialties which require the most investment in education. The specialties rated as having the lowest job satisfaction are now Obstetrics, Orthopaedics, Ear Nose and Throat, Ophthalmology and Internal Medicine. The result? Long waiting lines for medical care, areas of the country with no one delivering babies, and in many cases the need to “know someone” to get the care you need. Physicians are selling their practices and becoming corporate hospital employees, with regular hours and a blue collar shift work approach to their profession.

Do you like your “hospitalist” more than Dr. Welby?

There really are free market solutions. It was the free market which gave us the level of care we have today. One need look no further than those areas in medicine where quality and service has improved and price has diminished — the care rendered for cash. Ten years ago, Lasik eye treatments were $5000; now they are under a $1000, they are readily available, and the quality has improved. Cash pay medical practices have a lower overhead so they can pass savings off to their patients. Office visit prices are inflated for the 14% cost of billing, and for the added cost of documentation to prove to the government you did what you are charging them for. You can’t cheat the patient with dollar bills in his hand at the window. He knows whether he is paying for a service he truly received.

So, to paraphrase AA, the first step is to acknowledge the problem. Come on, Nancy and Barak and Ted. Just step up and admit, “I am a politician and I am the problem.”