10-9-05Health care in America is fucked up for many reasons.
1. Health care must be universal. Not providing health care to all is a very foolish way of "punishing" the poor. It only increases the total cost in the long run. If you don't provide preventive care to people who need it, you wind up paying much more for catastrophic care when their problems require treatment. Clearly we don't want to just let people die horrible deaths by not providing care - we're going to keep them alive, so it just makes sense to provide good care their whole life. Now, that doesn't mean they need optional care or unnecessarilly expensive care, but neither does anyone (unless they pay it 100% out of their pocket), which leads us to -
2. Health care purchasers and providers must be motivated to be efficient (aka effective and cheap). Currently this motivation doesn't exist at all, in fact the opposite motivation usually exists - doctors and hospitals make more money when they provide more expensive care, and patients usually pay a fixed cost which is not proportional to their care. We get situations where doctors prescribe very expensive drugs which are no more effective than the cheap generics that have long been available. We also get a lot of very expensive unnecessary surgery, partly because of a lack of preventive and lifestyle care, but also because of these improper motivations. You also have the problem that doctors are anti-motivated to transfer patients. If you wind up in the care of surgeon, you're likely to get surgery whether or not you should - he's antimotivated to transfer you to a physical therapist, or anyone else, he's motivated to keep you so he can do the work.
Making the patients pay proportional to cost is very simple. The percentage could also be scaled according to the patients wealth. A simple linear percent could work : you pay (your wealth/ $1 million) * 100% of the cost. Note that this is real wealth, not income. To go along with that, the health care providers would have to declare all costs up front. Furthermore, mistakes by the health care providers would have to be fixed at their expense, just as it is at any normal business. Making the providers incentivized to keep costs low is trickier. The first step is to make their base pay not proportional to costs. Then they need to be paid bonuses from the insurance company based on some estimate of the real benefit done, reduced by cost. eg. the more benefit they do for lower cost, the bigger bonus they get.
3. Doctors and hospitals (and all health care companies) should be held publicly accountable. Part of making this all work better must be information and accountability. Currently this hardly exists, partly because of doctor's fear of malpractice suits. Some sort of public database of doctors and hospitals records and patient reviews must exist for patients to be able to make decent free market health care decisions - without it the capitalist system is broken. Sort record of their costs and price scale must exist as well.
Capitalism is a very nice system, but one of the big classic problems with it is that it's very easy to push the real costs of your actions onto other people. In our system, that usually winds up being taxpayers somewhere down the road. If you make a car that's dangerous to others, you may save some money and make a bigger profit, but when it hurts others, a huge cost errupts for their health care and damages which is covered by others. When you make unsafe products, like asbestos, or vaccines laced with mercury, or foods full of all kinds of poisons, that can turn your company a nice profit; it may lead to massive health care costs down the road which are mostly covered by tax payers. (the only way to correct this incorrect charge is through our heros, the class-action lawyers, though even their huge suits rarely come close to matching the damages).