Friday, May 25 , 2018, 3:47 am | Fair 54º


Randy Alcorn: What’s Really Ailing American Health Care?

“You can always count on Americans to do the right thing, after they have tried everything else.”

Although there is no evidence that Winston Churchill ever said this, it certainly appears to be true about how America is dealing with health care. Neither Obamacare nor the Republicans’ proposed replacement for it is “the right thing.”

Despite having majority control of Congress, Republicans failed to repeal and replace the Patient Protection and Affordable Care Act, aka Obamacare, because the law’s most ardent opponents, the ideologically pure House Freedom Caucus, would not support any legislation that did not utterly obliterate Obamacare.

The Freedom Caucus and other advocates of minimal government and maximum free markets believe that the right thing for American health care, and just about everything else, is the magic of competitive capitalism in which the primal greed of the human species is sublimated into industrious creativity and invention to provide products and services that satisfy human needs and raise living standards.

Competition is the essential ingredient in this magic, which works as the regulating device that prevents predatory greed from ravaging markets — at least in theory.

Of course, theory doesn’t always work as predicted. In the real world, free markets without effective outside regulation become undermined by ruthless monopolies that employ any means to suffocate competition. Therefore, a less expensive mousetrap, or a better mousetrap, or a new technology that makes mousetraps obsolete many never come to market.

To a considerable extent this is what is happening with health care in America, and what makes it so expensive — with less positive outcomes than in other countries. Monopolistic consolidations in the pharmaceutical, hospital and insurance industries have steadily stifled competition.

And, even where there is competition it is difficult for patients to be frugal shoppers. Examine a hospital or clinic bill. Not only is the pricing obscured in a fog of code and jargon, but also the industry pricing practice of “usual and customary” defeats the competitive market mechanism. That’s how shoe inserts, available at Rite Aid for $15, are billed by the clinic at $75 to treat an injured Achilles tendon.

Big hospital chains are eager to buy up clinics and surgery centers so they can charge their higher rates at their new acquisitions. And, once a health provider essentially monopolizes a market, insurance companies are at a disadvantage in negotiating reimbursement rates and, consequently, must increase their premiums.

Big Pharma, meanwhile, is always looking to get even bigger through mergers and acquisitions. How often has that lowered the cost of their products? And if they can’t absorb competitors, they sustain high prices by paying competitors to delay the introduction of less costly generic drugs.

Pharmaceutical corporations are less inclined to invest in developing new drugs to replace those to which dangerously infectious microbes have evolved immunity than they are in more immediately lucrative “treatment” drugs.

The incessant advertising and promotion of these treatment drugs dominate the media. They all have some odd but catchy name and promise relief — but no cure — for all kinds of acronymed ailments — many of them obscure but with enough chronic sufferers to offer a lucrative continual market.

Treatment rather than cure has become a market strategy of the American health-care system. In her book, An American Sickness, author and physician Elisabeth Rosenthal recounts a cynical but disturbing prospect that if today’s big business, profit-focused, health-care industry was dominant 60 years ago there would not be a vaccine for polio but rather expensive high-tech iron lungs equipped with iPhones. Why? Because a lifetime of treatment provides a more robust revenue stream than does a cure.

If this is the market approach to health care, how likely is it that there will ever be a cure for cancer or any other disease?

It’s a sick system, but there are remedies.

Single-payer, universal health care works well for much of the advanced civilized world — with no more “rationing” or “death panels” than occur with a purely free-market system in which insurance companies work diligently to increase profits by refusing coverage to higher risk people while fighting the claims and delaying reimbursements of those covered.

As it works now, health insurance companies are mostly parasitic intercessors between patient and provider. With single-payer they would be unnecessary except to provide supplemental coverage for those who wanted particular upgrades. But, they would no longer be the health-care system’s gatekeepers conflicted over profit and patient welfare.

Another approach is Switzerland’s modified market system in which prices are capped and providers are regulated similar to how public utilities are. Providers are free to compete on price as long as they stay below the caps.

In these systems, health-care coverage is not attached to or dependent on employers. People have coverage no matter who employs them, or if they are self-employed or unemployed. This fosters individual enterprise and career movement. The need for health insurance should not shackle people to a particular job, nor inhibit entrepreneurship.

What ails America’s health-care system are the forces of greed that benefit greatly from it and purchase enough influence over elected officials to limit changes to it. They are unwittingly aided by those Americans who have succumbed to ideologies that often perpetuate the very conditions that work against their best interests.

Questioning beliefs is not only wise; it is healthy — especially concerning health care.

— Randy Alcorn is a Santa Barbara political observer. Contact him at .(JavaScript must be enabled to view this email address), or click here to read previous columns. The opinions expressed are his own.

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