Tag Archives: tort reform

Healthcare Models, Fascist and Socialist

Both the Affordable Care Act and the Republican alternative that just failed are fascist model healthcare systems.  In a fascist healthcare model lobbyists write the bill, lawmakers who they pay to support the bill, convince the public that it is a good deal. Congress and presidents are used as a means for the lobbyists clients to exempt themselves from free market forces,and raise profits to a higher level than they would be with free market restraints. The public which is a victim of this kind of bill remains bound by free market incentives and pays astronomical prices for healthcare and drugs.

Certain provisions of this type of bill appear appealing to the public but are traps with no escape hatches. I understand there is a movement among  Republicans to included more tort reform. Tort reform sounds good to the public because people picture doctors lowering prices because their legal costs are lower. There is no chance such a thing could happen. Doctors have no incentive lower prices but do appreciate the lower costs and increased income. Prices to the public continue to rise. Inclusion of tort reform in the Republican bill is reason enough alone to say no to the legislation.  As a rule of thumb, never relinquish a right in expectation of receiving a benefit.  Citizens who support tort reform are surrendering many of their rights to engage in civil litigation when they are harmed in the health care system.

When attorneys could freely sue doctors on behalf of clients, this provided a type  free market regulation of the entire health care system. Giving up rights in civil court has been a mistake in every state where it has taken place.

Chances are that a fascist model healthcare bill of of some kind will be passed in the near future. Be warned, there is nothing free market about any of these bills. Expect goodwill in healthcare to continue diminishing.  Goodwill does not occur magically from the kind nature of the human species. Goodwill evolves in free markets because vendors are highly motivated to please their customers.

Socialized medicine or single payer healthcare will also be proposed. Single payer is of course a regular socialist model. In a single payer system Doctors lose the incentive to treat patients because more patients does not translate into higher income. Healthcare costs could come down in theory  but would not because there is no incentive to economize. Healthcare would be less available because providers would try to maximize their income and treat as few patients as possible in doing so.  Socialized medicine would also cause further reductions in the level of good will. Goodwill alway disappears when free markets are dismantled. It makes since because free markets are the devices that create good will in the first place.

While healthcare in the U.S. is being taken further out of the free market realm, free market influences never disappear. In the short run patients will take the punishment and just pay up. Over time, alternatives will emerge. Overseas doctors will start offering Americans thorough  Skype consultations. Medical vacations will become more common. Doctors in Mexico may start cash practices close to the border to serve American patients. Many Texans already go to Mexican doctors. Healthcare is all products and services. Like any industries substitutes will emerge. The notion that the United States has the best doctors in the world is nothing but rubbish.

In the meantime, given that Americans don’t trust free market medicine, Healthcare will continue to worsen.

The Health Care Squeeze

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011313_HealthcareCOVER_t670Anthem Inc. is in the process of trying to buy Cigna Corp. For anyone who doesn’t know these are Giant Health Insurance providers. There are only a handful of these companies. The story is that consumers will benefit because cost savings will be passed on to patients.

This is the same logic that was employed in Texas as tort reform was instituted. Will lower costs be passed on to consumers? Since all of economics is based on one incentive, self interest, there is no chance at all that there will be savings for consumers. Corporations merge for the purpose of making additional profits and there is no other reason. There is nothing wrong with two corporations merging in order to improve profits. It is wrong to point to a benefit for patients when that is not even a possibility.

What passes for health insurance is actually a payment management system that extracts money out of patients and physicians. Corporations like Anthem and Cigna have no true utility to society. They are a cause of high health care prices. Government guarantees their market. The insurance companies simply skim income off of everyone by using government to force patients and doctors to deal with them. Americans don’t seem to mind but they are being impoverished by this system. In the long run these entities will not survive but they are inflicting a lot of pain in the mean time.

Monopolies, even those created by government, eventually destroy themselves. The process is slow but consumers are constantly searching for substitutes for what monopolies provide. Remember that “only phone company in town.” High prices for land lines and high long distance rates helped usher in the mobile phone. One of the consequences of squeezing physicians is that it creates an incentive to charge patients without providing treatment. Who has not had the experience of going to a family physician and being referred to a specialist for a run of the mill condition. This is how mass marketing medicine works. Herd them in, herd them out and collect collect a fee. This is not a preference of doctors. They have a choice of getting paid for not treating patients or taking a loss. Actual health care is becoming rare.

What happens next? People everywhere are discovering the curative nature of everything from Aloe Vera to oral supplements made from cannabis oil. Watch for doctors in foreign countries to start offering Skype appointments. More Americans will start traveling to Mexico and other countries to get treatment. The black market drug business will flourish even more than it already is. Eventually a few doctors will figure out that they can make a good profit by offering cash patients a hefty cash discount. What is a physician’s profit for an office visit? It is probably less than a patient’s insurance copayment

Don’t look for Americans to complain. They have been told they have national health care by authoritative elected representatives. It may take the average Joe twenty years to figure out that there can be a difference between what a system is called and what it actually does. For those of us who are euphemism free and use commonsense this is not a problem. There are not many of us.