I’m confused. Help me understand.
Supporters of our current healthcare system tout its free-market basis. That, that claim, in itself makes our system better than the others. Better means more efficient, more effective. We deliver better care at lower costs. Thats what a superior business model accomplishes in a free-market system, right?
Yet, the threat of competition from a 2nd option offered by our very inefficient, very bureaucratic, federal government terrifies the major brands and industries who comprise our healthcare system. I’m from the federal government and I’m here to help is a terrifying competitive threat to their current business model.
Small businesses are the engine of job growth in our economy. The major source of layoffs have come from major brands whose products and services are no longer desired. Small companies arise from innovative solutions being brought to market that meet the current needs of consumers. Thus, jobs are created in these small businesses.
Small businesses are the least able to afford health insurance as a company benefit for their employees. The health insurance industry has a pricing model that eliminates small business as a customer for the group plans offered by health insurance companies.
Small businesses as a result find it more difficult to attract the talent needed to grow their business. Small businesses then can’t grow and create more jobs to replace those eliminated at the large unresponsive national, global, brands.
Healthcare costs then choke the very system, the free-market, capitalist, system whose principles the healthcare providers claim to embody. At least according to it supporters and their ideological zealotry.
So, when CNN reports that healthcare costs choke small business then what it really says is healthcare costs choke our economy.
Is that right? Is that what I understand?
Supporters of our current healthcare system tout its free-market basis. That, that claim, in itself makes our system better than the others. Better means more efficient, more effective. We deliver better care at lower costs. Thats what a superior business model accomplishes in a free-market system, right?
Yet, the threat of competition from a 2nd option offered by our very inefficient, very bureaucratic, federal government terrifies the major brands and industries who comprise our healthcare system. I’m from the federal government and I’m here to help is a terrifying competitive threat to their current business model.
Small businesses are the engine of job growth in our economy. The major source of layoffs have come from major brands whose products and services are no longer desired. Small companies arise from innovative solutions being brought to market that meet the current needs of consumers. Thus, jobs are created in these small businesses.
Small businesses are the least able to afford health insurance as a company benefit for their employees. The health insurance industry has a pricing model that eliminates small business as a customer for the group plans offered by health insurance companies.
Small businesses as a result find it more difficult to attract the talent needed to grow their business. Small businesses then can’t grow and create more jobs to replace those eliminated at the large unresponsive national, global, brands.
Healthcare costs then choke the very system, the free-market, capitalist, system whose principles the healthcare providers claim to embody. At least according to it supporters and their ideological zealotry.
So, when CNN reports that healthcare costs choke small business then what it really says is healthcare costs choke our economy.
Is that right? Is that what I understand?
Hi Zane,
I think the issue is much (much) more complex. And very unfortunatley so. Healthcare does not operate in a free market. Prices are effectively established by Medicare and all insurance companies/payers use the Medicare fee schedule as a guidepost. For example, insurance payments to physicians/hopitals are contracted as a % of Medicare - "125%" of Medicare. And when Medicare changes its fees or adjusts how these are calculated, the insurance companies follow lock in step.
Physicians, moreover, are not allowed to discount below their contracted rates. In order for a patient to receive a substantial discount (say 10-15%), the patient will have to prove hardship.
There are many more regulations and state specific laws that effectively eliminate the notion of a free market in healthcare.
I think the key issue is that current regulatory and business environment prevents the healthcare players from aligning with "consumer demand" - better quality care at lower costs.
We'll need a wholesale rethinking of how healthcare payments work and will have to decide that it will be truly free market or socialized. Another version of the in between system (which we have today) won't work.
Posted by: Ravi Sohal | June 18, 2009 at 10:25 PM