Most Americans know that the cost of health insurance has far outpaced the rate of inflation for many years. Indeed the cost and availability of health insurance lies at the root of the Congressional impasse which has so enraged so many people.
But despite all the finger pointing from both ends of the political spectrum, no one seems to understand the rather obvious reason for increasing health care costs.
It’s basic, fundamental economics.
If you separate the duty to pay for a benefit from the right to receive the benefit, the demand for the benefit will go up. And if the demand goes up, the price goes up.
In short, health care costs go up because most people have health insurance!
Years ago at Cooley Law School, we introduced a modest $5.00 co-pay for office visits, and the cost savings were astounding.
Let me say it again: what makes health care so expensive is the proliferation of health insurance. It doesn’t make any difference if the health insurance is private enterprise or a public option; if you separate the right to receive health care from the duty to pay for it, the cost will rise.
The solution to the health care dilemma is simple: Let everyone pay for their own health care. If they want to buy insurance and can afford it, they will buy insurance. If they don’t want insurance or can’t afford it, they won’t buy it.
Wait a minute, you say. What if the people who can’t afford health insurance get sick?
Good question. I’m not one to say let them suffer or let them die. I strongly believe that one of the fundamental duties of organized society is to care for the needy.
It is the role not only of private charity, but also of public institutions to foster and protect human life. The homeless, the hungry, the infirm, the injured; they are all our brothers and sisters. It is the proper duty of government at every level to provide for their needs.
The outpouring of public and private help to the people of Haiti is proof enough that organized society comes to the aid of every human being on the planet.
But the duty to help the needy does not presuppose a level of largess beyond the reasonable capacity of the donor.
Providing a home for the homeless doesn’t require guaranteeing everyone a three bedroom house in the suburbs. Feeding the hungry doesn’t mean serving a Thanksgiving turkey dinner every night on every street corner. And attending to the sick and injured doesn’t demand that every patient have a private hospital room and nurses around the clock.
The first rule of helping people is to encourage them to help themselves. During the Clinton years, we opted for workfare over welfare. It is time for the Obama administration to stress selfcare over healthcare.
I’m not talking about a nanny state in which a ubiquitous federal government dictates everyone’s diet and exercise routine. But I am suggesting that folks without a lot of money have always found inexpensive ways to take care of themselves, and the best way to encourage them to do that is stop talking about giving everyone free health insurance.
I wrote a blog some time back about a plan I called Medi-Fex. It is a simple way to guarantee adequate health care for everyone without mandating universal health insurance. It puts the first duty to pay the doctor on the patient. That’s about as fundamental as economics can get.