Freeman

PERSPECTIVE

Healthcare Whodunit

DECEMBER 02, 2013 by THE FREEMAN

Obamacare isn’t the only story in healthcare, though it has kept the topic front and center since its botched launch a few weeks ago. Since then, we’ve found out what we already expected: that the Affordable Care Act (ACA) was more a work of political fiction than the sweeping fix to the United States’ terrifically muddled healthcare system. Jeffrey Tucker has already pointed out some of the reasons why this should be expected: U.S. healthcare got so overpriced and inefficient because of repeated State interventions in the past. “Obamacare was just another step in the wrong direction—albeit a big one—not unlike that which had occurred once every five years for the last 50 or so,” he writes. 
 
You can zero in on the disastrous launch of healthcare.gov (the feds paid a ton of money for something that doesn’t work—go figure!), or the—let’s say “fishy”—promise that anyone who liked their insurance plan could keep it, or the brutal reality of a doubling or tripling of premiums now replacing the fantasy of all-but-free insurance and treatment. It all points to a failure on a scale with the attempt to restructure one-sixth of the economy by pure fiat and, as Tucker notes, “create a market-like environment out of a nonmarket good or service and expect it to achieve efficiency, productivity, and customer satisfaction.”
 
Of course, the ACA will dramatically expand the number of people receiving checks from the feds. This will make the act wickedly difficult to repeal or to fix any further, says Merrill Matthews, a healthcare expert we interview in this month’s issue. Particularly when those checks are compared to the new, often staggeringly high premiums. So while Matthews, who was in the thick of the ACA’s development and passage (to put it diplomatically), saw plenty of examples of both hubris and incompetence, the political instincts of those who pushed it through (without reading it, of course) might well prove to be spot on. It might even turn out that the ACA’s initial failure paves the way for the single-payer system that a large faction of the ruling party has wanted all along. At the same time, though, the ACA appears to allow for some innovative health insurance plans that give consumers an incentive to monitor and curtail spending increases, Matthews says. If those plans get a foothold and continue to grow in popularity, the ACA could wind up promoting exactly the sort of bottom-up reform it appeared to render moot. 
 
We still don’t know what will happen. We were told during the “debate” about the ACA that it had to be passed for anyone to figure out what was in it. So far, it’s been one nasty surprise after another. A truly freed market in healthcare also offers uncertain prospects, but there are plenty of encouraging examples already on the ground suggesting that nothing about healthcare is so intractable that Leviathan has to wrestle it into submission. 
 
Jordan Bruneau describes the efforts of Dr. Keith Smith, whose Surgery Center of Oklahoma (SCO) has already offered patients and insurers some real price competition. A lot of the insurers passed on it; they and their hospital networks had cozy and profitable arrangements. So Smith went over their heads and directly offered CEOs a better deal. The SCO has people flying in from all over the continent for treatments that cost far less than the same treatments elsewhere. Of course, figuring out how much cheaper can be tricky, since the SCO’s price transparency isn’t any more welcome than by competition. “The big hospitals,” Smith told Bruneau, “have been thrust into a market economy whether they like it or not.”
 
In the meantime, Remote Area Medical (RAM) has been bridging the gaps left by the current healthcare system. Or it’s been trying to, despite the persistent interference of the State. Originally founded to bring medical care to the third world, John Ross says, RAM realized there was a need in the United States. Of course, the bureaucrats in charge of handing out licenses—and collecting license fees—frequently disagree. That’s why RAM was effectively kept from helping the residents of Joplin, Missouri, recover from terrible tornado damage: They couldn’t find people with the right kinds of licenses. In Washington, D.C., bureaucrats told RAM they had no need for help staffing their mostly idle dental facilities. Stories like these—and the penalties for practicing without a state license, even in the wake of a catastrophe—make it easier, some would-be volunteers have noted, to donate time and expertise in Guatemala than in the next state over. 
 
Even so, RAM soldiers on. Occasionally there are victories, like the one in Missouri that overrode the governor’s veto and allowed RAM to provide eyeglasses and much-needed dental fixes to anyone who can make it to St. Louis. 
 
So what should we make of all this? Essentially, it’s the story we report here every day: Given the freedom to act, individuals associate, innovate, and come up with solutions to problems. Then they make those solutions better, or they add others to the toolbox. Frequently all three things—innovation, iteration, and expansion—are going on at once. Politicians like to boast that whatever program they’re pushing represents what society values. They might even believe they speak for society. But the people who make up whatever politicians mean when they say “society” do just fine speaking for themselves. And absent the imposition of State controls and the zero-sum dilemmas they create, those people create stories with enough different types of good outcomes to accommodate nearly any combination of preferences you can dream up. Put another way, the market cranks out rich, interactive video games, across platforms, while the State’s still churning out the same turgid and tawdry whodunit. The ACA couldn’t get readers even among those voting for it. Too bad the rest of us can’t leave it on the shelf.   
 

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December 2013

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