Monday, November 23, 2009

NPR on health care

NPR's Planet Money set out to understand the current health care situation and identify what the problems are in a two part segment last month (one, two). The clear summary by Stephen Spruiell of National Review welcomes NPR into the Vast Right-Wing Conspiracy:
1. Medical-malpractice lawsuits drive up the cost of health care. ... doctors practice what’s known as defensive medicine. That is to say, they order tests and perform procedures that their patients might not need, out of fear that otherwise they might get sued. ...

2. Insurance companies are not evil. ... It turns out, the less competition an insurance company faces in a particular market, the cheaper it can price its products, and the lower premiums are for the insured. Why? Because insurance companies have to wield a lot of clout in order to bargain effectively with the large health-care provider groups in a given area. ...

3. Our reliance on third-party payers is at the heart of the problem. So if insurance-company greed isn’t to blame, what does ail our health-care system? NPR’s reporting points to what economists call the “third-party-payer problem.” As David Goldhill pointed out in a must-read article for The Atlantic earlier this year, you don’t get the bill for your medical care. Someone else gets the bill, and that distorts incentives for payers, providers, and consumers of health care.

4. Obamacare won’t fix it. The NPR team did not come right out and say it, but its reporting points to this conclusion. Alex Blumberg put it this way:

Markets are usually really good at controlling costs. When they work best, products come into existence like cell phones or stockings, they start expensive and then they get cheaper and better. But markets don’t guarantee that everyone can afford the things they need. Government can be good at that, ensuring universal access. But when you’re paying for everybody, it’s hard to control costs.

For [economic historian] Melissa Thomasson, she says that either extreme — a competitive market system where consumers know what price they’re paying and what they’re getting, which would drive the cost of health care down, or a government-run system which would cover everyone — would be better than the accidental mixture that we have today: a really expensive system that doesn’t cover us all.

Obamacare would pour even more cement over this broken system.
Hat tip to Newmark's Door, who comments that Old Scratch must be looking for his thermals right about now.

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