It’s a heart-breaking story. Yesterday, 32-year-old Francisco Felix checked out of a Phoenix hospital. He expected to come home with a newly transplanted liver, but he never made it to the operating room. Not long ago, his operation would have been covered by the state’s health-care system for the poor, the Arizona Health Care Cost Containment System (AHCCCS). As of Oct. 1, the state stopped covering liver transplants, citing a lack of money and the procedure’s low long-term success rate.
Felix, 32, knew the operation wouldn’t be paid for by AHCCCS, but when a match for his liver materialized, he checked into Banner Good Samaritan Medical Center, hoping against hope that the $200,000 he needed would come from somewhere. It didn’t, and the liver reserved for him went to the next eligible recipient.
Felix’s story is tragic, of course, but it’s also a symptom of a much bigger problem. The U.S. would be in much better position to help people like Felix if we could stop the waste and inefficiency in health care. Consider these statistics from 2009:
“Already, the federal government spends eight times as much on health care as it does on education, 12 times what it spends on food aid to children and families, 30 times what it spends on law enforcement, 78 times what it spends on land management and conservation, 87 times the spending on water supply, and 830 times the spending on energy conservation. Education, public safety, environment, infrastructure—all other public priorities are being slowly devoured by the health-care beast.”
Whether the recent health-care reform initiative withstands the Republican onslaught or not really won’t matter much unless we address the real problem. The legislation didn’t fix the health-care mess at all. It made health insurance available to more people, but it did nothing to address the runaway health care costs that will continue to put meaningful treatment out of the reach of countless Americans.
The figures above come from an article by David Goldhill in the September 2009 issue of The Atlantic. The article, How American Health Care Killed My Father, is worth your time. It’s a long read, but it will give you more worthwhile health care reform ideas than you’ve seen in the past 20 years.
Goldhill is not a doctor or an academic. He’s a media executive who, among other achievements, has headed the Universal Television Group. He’s a Democrat, a savvy businessman and a driven observer who spent more than a year studying the U.S. health care system after his father died from contracting sepsis in a hospital. One of the first things he learned was that about 100,000 people a year die in the U.S. from diseases and conditions they contract after they enter a hospital.
He says that using insurance to pay for all our health care expenses is absurd. It removes consumers from their primary role of cost and quality control. It creates a moral hazard for physicians, who are tempted to order tests and procedures that may or may not be good for the patient but are always economically good for doctors and their colleagues. It also creates a tremendous administrative burden; for every two doctors in the U.S., there is one health-insurance employee.
Goldhill proposes a system in which people pay for ordinary and routine expenses out of their own pockets; pay for major expenses such as an appendectomy from savings or with credit; and use health insurance only for expenses resulting from true catastrophes.
By removing insurance from paying all health care bills, we can restore market forces, bring back competition and lower costs overall. He cites LASIK surgery as an example. Insurance usually doesn’t cover LASIK bills. As a result, prices have fallen as doctors compete against one another for business. We’d probably also have the resources as a society to help people like Francisco Felix.
Goldhill is a Democrat, so he has ways to involve the government but at levels far less expensive than anything proposed today. You should read the whole article to understand the nuances of his thinking.
As long as the GOP is hellbent on taking another run at health care, it should take a look at Goldhill’s ideas. Republicans should like their market-based underpinnings. We all should like the idea that we could begin to tame a system that has run out of control and isn’t getting any better.