Posted by Shyam Moondra
President Obama has made health care reform as his number one domestic policy goal. Obama and others talk about two major problems related to health care: the swelling ranks of uninsureds and rapid increase in the health care cost. In fact the sharply escalating health care cost is the primary reason why millions of people can't afford to buy health care insurance. Therefore, if the Obama plan is able to bring down the costs by at least 30%, the problem of uninsureds will dissipate. Those who are too poor to pay for health care could be dealt with as a separate issue as part of the reforms concerning the Medicaid program.
The main reasons why health care costs are increasing at a much faster rate than the overall inflation and what could be done about them are as follows:
· Unchecked greed of service providers such as insurance companies, drug manufacturers, hospitals, and doctors. The industry environment permits the service providers to increase the rates as they please to earn a hefty profit. They are treating health care as a cow they could milk to the hilt. This issue could be addressed by introducing a non-profit government administered plan or by regulating the profit margins of the service providers in the same manner as many of the utilities are regulated today.
· Insufficient competition in the industry. There appears to be a conspiracy among the service providers when it comes to pricing their products and services. If a government sponsored plan is introduced, it will force the competing carriers to moderate their pricing policies. We could also have new anti-trust regulations specifically designed for the health care industry. In addition, we need to reform the patent related laws to permit the introduction of generic drugs sooner.
· Unnecessary tests and treatments. Doctors often prescribe tests not because they are really needed but just to protect themselves from potential malpractice lawsuits. The fear of lawsuits drives them to be 100% sure on all aspects of health care. This "care-to-perfection" is often unnecessary and it adds to the costs enormously. Doctors and hospitals collude to push for expensive surgical procedures that yield more income for them even though there may be cheaper alternatives available that would be just as effective. This issue could be addressed by reforming the malpractice laws and by developing standards for medical treatment.
· Patients' attitude of indifference. The patients often ignore the costs so long as a treatment is covered by insurance (even though this eventually ends up costing them more in terms of higher insurance premium and co-pay/deductibles). We need to come up with a plan which will induce the patients to weigh in the costs involved when choosing service providers or making decisions on treatment alternatives, just as they would when they buy other non-health care products and services.
· Health care system inefficiencies. The paperwork and record-keeping procedures tend to be cumbersome that add to the health care costs. The government could help develop a comprehensive solution that takes advantage of the modern information technologies.
· Lack of medical knowledge on the part of population. People often end up seeing a doctor or not being able to make wise treatment choices because they are not knowledgeable enough about medical care. We should make education about medical care and prescription drugs for common ailments mandatory for most people. If people achieve the required level of understanding about medical care, they should be awarded a certificate which would allow them to get certain medicines (e.g., antibiotics) without a doctor's prescription. If people are able to treat common ailments such as cold, diarrhea, heartburn, constipation, high blood pressure, etc. they will have fewer visits to doctors and thus reduce the cost of health care. If people can learn how to repair automobiles, I am sure they can also learn how to treat common health problems themselves.
The escalating health care costs are negatively impacting families and businesses alike. Up to this point, in the face of government inaction on this issue, many employers are washing their hands off this problem by cutting back employee/retiree's health benefits and increasing co-pay and deductibles. The escalating health care costs are also making American companies less competitive in the global market place. The Obama administration is thus correct in making health care reform as the number one priority. Republicans must work together with Democrats in an objective manner, free from any pre-conceived ideologies, to reign in the health care costs. Any proposal that doesn't reduce the health care costs by at least 30% should be viewed as a sham. In the next round of elections, the American people would not hesitate to punish those who are creating obstacles in achieving meaningful reforms.
