More Government Planning in Health Care Can be Bad for Your Health (… and freedom)
In the abstract, government planning of health care sounds like it could be made efficient and fair. Handcuff or eliminate the private insurance companies, and eliminate their middleman overhead charges, and costs can be reduced. Just like socialism can be made to sound good on paper, government planned health can be made to sound good. If this was not true then the socialist revolutions in the Soviet Union, China, and elsewhere in world never would have occurred. People have a natural impulse to think that collectivist planning can be bring better results than letting capitalism run loose.
The socialist impulse can be seen in the health care reforms being proposed where supporters are promising that more government planning is the solution to controlling health care costs and making the health care system fairer. If you avoid the details of where this all eventually leads, it all sounds nice. Thus today a New York Times editorial tells us how we should look at the latest Massachusetts efforts toward controlling health care costs:
A special commission has just recommended that the state try, within five years, to move its entire health care system away from reliance on fee-for-service medicine, in which doctors are paid more for each additional test or procedure they provide.
In its place, the commission wants a system in which groups of doctors and hospitals would receive fixed sums to deliver whatever care a patient needed over the course of a year. The hope is that doctors would be motivated to deliver only the most appropriate care, not needless and excessively costly care, with safeguards to ensure that they do not skimp on quality.
Okay, a lot of countries have been doing things like this for some time. It often doesn’t work out well. Here we have a description of life today in the UK and thus one result we might expect:
[Dentists] are now paid a flat rate covering the amount of work they are contracted to do each year, which is measured in UDAs (units of dental activity)…. While these reforms were supposed to increase access to NHS dentists, in practice, they’ve had the opposite effect. NHS estimates suggest that nearly 1 million fewer people have access to an NHS dentist than they did three years ago. According to a citizen’s advice survey carried out in early 2008, approximately 7.4 million people hadn’t been to an NHS dentist since April 2006 because of difficulties in finding one…. The incentives set up by the new system also mean that dentists are more likely to “under-treat,” i.e., to fail to provide complex (and costly) treatment, even if it’s clinically necessary. After all, they are now paid the same to perform a root canal as they are to pull a tooth. Not surprisingly, the number of complex procedures has dropped precipitously in the last few years.
