Despite progressive lies to the contrary, Americans have always had access to health care regardless of their ability to pay, and the primary reason our health care market has become so complicated is government interference through Medicare and Medicaid which purposely underpay doctors requiring them to aggregate the charges of many smaller procedures to recoup their costs.
To understand what’s happening in the health care market, it helps to speak with someone old enough to remember what it was like to visit a doctor before LBJ created the Great Society components of Medicare for senior citizens and Medicaid for low income Americans. They will undoubtedly speak of visiting a doctor who took his time to properly diagnose your particular ailment and charged you probably less than ten dollars. This doctor knew you and your medical history, along with everyone else in your community.
LBJ had the brilliant idea of creating the Great Society to ostensibly alleviate poverty but really to create dependency upon the federal government to have something to hold over the heads of voters come election time. Health care is one of those things like insurance that we grudgingly purchase because we need it while wishing we could spend our money on something more appealing to our sense of materialism. LBJ tapped into this sentiment by offering to have the federal government pay part of the cost of health care. Health care providers quickly realized that consumers were already willing to pay a certain amount for health care, so they immediately began raising their costs to capture both the part consumers were willing to pay along with the portion the government was willing to pay. In effect, they were being paid twice by two different entities for the same service.
You can’t really blame the health care providers for taking advantage of the opportunity placed in front of them by politicians attempting to interfere in the market to their benefit, until these health care providers began to depend upon this arrangement and assist the politicians in furthering their interference in the market to benefit these health care providers even more. By health care providers, I am referring to doctors, hospital corporations, medical device makers, researchers, drug companies, and every stakeholder in the medical industry who benefitted from this government interference which caused prices to dramatically rise over the years.
Over the years, this government interference in the market caused the unintended consequences of making health care unaffordable for Americans and forcing their reliance on insurance to cover these costs. Politicians who originally engineered this government interference of partial payment for medical services rendered to alleviate poverty and provide greater access to health care for low income Americans realized the system was becoming increasingly infeasible, but were unwilling to admit that the government interference they had engineered was responsible for this infeasibility. Since the health care system was now broken to the point where Americans were truly unable to afford health care without either having insurance or by relying completely upon the government to pick up the tab through Medicare or Medicaid, the politicians now turned their attention to fixing the mess they had created in the first place.
Along the way, these politicians figured out that they had a golden opportunity to further their hold over the middle class by portraying the health care market as hopelessly broken and unworkable in private hands necessitating the government to completely take it over and run it. They never mentioned that their original interference in the market was the cause of the unintended consequence of breaking the health care system in the first place. Populist charges of greedy insurance companies taking advantage of Americans forced to rely on insurance coverage or risk bankruptcy to pay the astronomical costs of health care resonated with voters unable to understand the complexity of the situation and desperate for relief.
You see, unless you’ve worked in the industry, you really can’t understand just how little the politicians know about it when they’re pontificating on the evils of predatory insurance companies and decrying the inability of Americans to obtain health care because it’s so unaffordable. Having worked in the industry, I’m aware that health care is available to any American regardless of their ability to pay through the Medicaid system. Louisiana has the Charity Hospital system that provides medical care to its citizens regardless of their ability to pay. This is not free medical care, because someone always pays for medical care. In the case of the Charity Hospital system, this would be the taxpayers since each patient admitted is first signed up on Medicaid during the admissions process. Patients are required to cover the costs of their medical care based on their ability to pay.
I worked at the E.A. Conway Hospital in Monroe, Louisiana where I witnessed patients who put off coming to the doctor until they could no longer ignore their medical conditions. They would show up at the emergency room for treatment. If warranted, follow up visits in the Family Clinic would be scheduled, but patients would routinely either cancel their appointments or just not show up if they were feeling fine. Recall that these preventive care visits cost the patient nothing out of pocket if they lacked the ability to pay, yet they refused to give up their time for this care. Those I worked with would routinely roll their eyes any time they heard a politician start to describe what was wrong with the health care system because they knew absolutely nothing about the system. I often overhead patients claim they wouldn’t be at the hospital if it wasn’t for the seriousness of their medical condition.
Not that it’s ever going to happen, but the only way to seriously reform the health care system in America is to remove the government interference in the health care market which unnecessarily distorts prices and causes consumers to be denied health care at affordable prices. This would be a great shock to Americans dependent upon the government to pay for their medical care as they would be unable to get comfortable with the idea. The sudden loss of government payments for medical care would force the health care system to drastically lower prices as private insurance would be unwilling to cover these costs without raising premiums to the point of being completely unaffordable.
Since the passage of the Affordable Care Act, euphemistically known as Obamacare, doctors have either been leaving the system by retiring and selling their practices, or converting their practices to cash by refusing to accept insurance. Doctors refusing to accept insurance at these cash only practices are finding they save enough money to dramatically lower their prices, thus making their services affordable for their patients who are free to file their own insurance claims if they feel the need to recoup their out-of-pocket costs justify the headache of dealing with the insurance companies.
By interfering in the health care market through Medicare and Medicaid, the government set itself up as the biggest consumer of health care services, thus creating a client so large the health care industry was forced to abide by its terms. To keep costs down, the government engineered a system whereby payments for services were set at artificially rates below natural market forces. Doctors were forced to itemize their services and charge for each individual service instead of charging a flat rate for a group of services. An office visit became establishing a new patient record, gathering vital statistics, a consultation, a diagnosis, administration of medical service, charting, billing, and a host of other ancillary functions associated with an office visit. By accumulating the underpayment for each individual service, the doctor is able to recoup enough payment to cover his costs and eke out a profit, but he is required to employ additional staff for this task and work hard to achieve payment.
Insurance companies adopted this approach as it suited their purposes of forcing doctors to itemize their services for payment and doctors were already used to doing this to satisfy the government payment systems. Insurance companies have a vested interest in forcing doctors to work harder to recoup payment from said insurance companies for services rendered. The insurance companies negotiate rates for these itemized services with doctors who agree to accept the rates offered by the insurance companies for access to their pool of clients. Since doctors are already aggregating itemized charges to recoup enough payment from the government Medicare and Medicaid systems to cover their expenses, they were willing to accept this model from insurance companies.
Doctors walking away from this overly complex system of paperwork are finding that the costs of compliance far outweigh the profits generated. Their lives are made immeasurably easier by converting to cash only practices and letting go of the staff formerly required to navigate this paperwork maze. They find they now have the freedom to set their own prices and the flexibility to adjust them as circumstances warrant. Consumers of their services are much happier with this new arrangement because doctors are free to spend time with them diagnosing their conditions and providing explanations where they were previously unable to spend anything but the minimum amount of time in order to see enough patients to cover the high overhead of their practices.
Progressive politicians interfered with the health care market to create voter dependence upon the government, thus allowing these politicians to bribe voters at election time to keep them in power. When the health care system became overly complex and forced Americans to navigate a system these politicians had broken, they created a new narrative blaming the failure of the system on private companies neglecting to admit their interference was the real culprit. Their solution to fix the health care system was to completely place it under government control where they could more easily create voter dependency on their beneficence. They created the false health scare crisis narrative whereby millions of Americans had no access to health care due to its high cost and the greed of insurance companies charging exorbitant rates because consumers were forced to purchase their product or risk certain bankruptcy should a medical emergency arise in their lives.
The health care industry is extremely complex and its problems are even more complex. They do not lend themselves to sound bite explanations and Americans should be extremely wary of anyone offering such simple explanations, especially if they are coming from politicians promising to fix the broken system with a multipoint plan. Obamacare is rapidly falling apart prior to its launch date, and things will only get worse as its implementation rolls along. The progressive politicians are already prepared to fix this problem they will blame on Republicans who unanimously opposed its enactment. They will offer voters a single payer system modeled on systems in Canada and Great Britain, but neglect to tell them of the long wait times for services that routinely result in patient deaths due to bureaucrats unmotivated to provide customer service. The false health scare crisis narrative has worked well for progressives and will not be abandoned anytime soon.