Monday, June 22, 2009

One NJ Doctor's Rebellion

From the Star Ledger Reader Forum.

Cash-only health care

As a psychotherapist, I do not accept Medicare or Medicaid. Why? Because they pay a pittance compared to private health insurance. Yet private insurance has been reducing reimbursement rates with no warning or notification to providers. In fact, there has been no increase in reimbursement since 1994. Can you imagine not getting a raise in pay for that long and having your income reduced as well?

If President Obama's health care reform passes, any provider worth his weight will not take insurance at all and take only cash, freeing themselves from the organized crime of insurance all together. This will leave only the worst providers as "In network." Quality care will be left only to the rich, while those trying to save a buck will save little. People need to speak up and demand answers from "for-profit" insurance companies.

Leo Battenhausen, Roselle

My Commentary:

Posted by Zemack on 06/22/09 at 7:26PM

Leo Battenhausen describes how American medicine is slowly being destroyed, but misses a crucial fact and thus blames the wrong culprit... the "for-profit" insurance industry.

Our system of health insurance is an absurd, government-created Rube Goldberg concoction, administered by quasi-private companies forbidden to tailor policies to market demand; i.e., the choices and budgets of the actual, individual consumers of healthcare. Our current system is not indicative of a free market, but of a mixed economy. Perversely, the insurance company works not for the consumer...i.e., the patient...but for the employer, union, or other third party, to which it is beholden. It has created huge administrative costs throughout the system, undermined the doctor-patient relationship, placed undue power in the hands of insurance company bureaucrats, and tied people to their jobs.

I have encountered, as a patient, the squeeze between what my doctor wants to prescribe and what the insurer demands. Since I am not the insurer's customer, I have no leverage and no choice. Because of the third-party-payer system, which was created and maintained by tax-code distortions, the doctor-patient relationship is disrupted, leading to the kinds of problems described by Mr. Battenhausen.

What is needed, for the private sector, is an end to the third-party-payer system, all insurance mandates, and all state-imposed restraint-of-trade laws. Government, through its controls and interference, is the source of the seeming power of the "private" insurance company. The proper role for government is an important one; to protect against fraud and breach of contract, and to mediate contractual disputes. Beyond that, the politicians should get out of the insurance business altogether. Health insurance is properly a contractual matter to be decided between the individual and his insurance company, as a matter of unalienable right. Likewise, healthcare services are a matter between the provider and the patient. If the insurer works directly for the patient, then he...the doctor's responsible for payment, whatever the contractual arrangements he has with his insurer happen to be. A doctor and patient are free to make payment and price arrangements directly, by mutual agreement, as it should be.

The problem is not "for-profit" insurance as such, but government interference, which inverts the normal market incentives. In a free market - which is a system based on individual rights - insurers, providers, customers and patients are free to contract with each other, voluntarily to mutual advantage. Profits are a natural consequence of the free market. They are the result of providing goods and services at prices that are both affordable yet above the cost of production, and accrue to companies best at doing that. The profit motive drives prices lower and quality higher, but only in a free market where companies compete directly for the consumer's business. The whole history of capitalism, when it is allowed to function, is one of growing profits by cutting prices by cutting production costs, thus expanding the market by increasing affordability. More importantly, the right to any profits earned by one's own productive work in any field is a moral, unalienable human right. Profits, properly understood, are noble.

As to government-run "insurance" programs, they should be phased out and abolished. They are corrupting and destroying medicine in this country. By refusing to deal with Medicare and Medicaid Mr. Battenhausen is taking more than a practical step. He is taking a moral stand against his own enslavement. Perhaps if more doctors rebelled in this manor, we would get the only moral solution to the problems plaguing American healthcare - a free market - rather than the ultimate disaster we appear headed for.

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