The problem of health care for the uninsured has been solved. The solution, as usual, lies in free markets. We have not had a free market in health care for many decades.
I am actually a part of a small, but growing, movement of doctors who have “opted out” of the third-party payment system and simply charge patients directly. No insurance contracts, no medicare, no medicaid, just direct payment at the time of service, from the person who receives the service.
The results? Throughout June and July of this year, my average charge was $37 per patient. Sounds affordable? Well, get this – that fee includes housecalls, some antibiotics and other medications dispensed, and lab fees.
Wait a minute, did that guy just say housecalls? Nobody does housecalls any more! Well, a doctor who employs free market principles can provide the kind of care that a patient wants, including housecalls. The patient is the customer, not the insurance company or the taxpayer.
By not contracting with third parties for payment, I do not have the kind of overhead that is needed to contend with those bureaucrats. Medical Economics magazine pegged the annual overhead for a family physician without obstetrics at roughly $272,000 per year in 2003. Mine is less than one tenth of that. A typical FP collects about 60% of his charges. I have collected 101%, due to tips. Yes, patients frequently tip me.
I calculated that if I charge $30 for something now, in order to come out the same, I would need to charge $107 if I had the same financial constraints as most doctors. I would have an extra $34 in overhead per patient, raising the fee to $64. Then to collect that $64, I would have to charge $107.
I can also offer generally same-day service, flexible hours, and adequate time with patients. I charge by time, so I am not financially pressured to gloss over issues or reschedule for later. I have even combined my office with my home. I call this Modern Medical Care with Old Time Service.
I am not really the first to be doing this; it was the typical practice model decades ago. There is a group of physicians, the Association of American Physicians and Surgeons, comprised of many like-minded doctors, that advocates just this sort of practice.
As far as morality is concerned, the free market approach is supremely ethical. Nobody has money confiscated from them, under threat of deadly force, to pay my fees for somebody else’s health care. That is the way Medicaid and Medicare work. My patients willingly pay me, and for the most part, they seem very grateful for the service they get.
One might think that America has free market health care, and that is our problem. After all, we are the only developed nation that yet lacks socialized medicine. How blessed we actually are, that we have not become completely socialized. After all, Canada’s own supreme court ruled in 2005 that their prohibition on private care “interferes with life and security of the person as protected by s. 7 of the [Canadian] Charter.” That was because people were dying on waiting lists.
So where do we lack for free markets? First, health insurance premiums are tax deductible if paid by employers, and now the tax deductibility has expanded with health savings accounts. This makes health benefits much more valuable than salary, skewing the perceived cost of health care.
Next, welfare programs such as Medicare, Medicaid, and the State Children’s Health Initiative Program now are the payors of over 50% of health care dollars. The massive sets of regulations that they have spawned have been adopted by private insurers.
The Food and Drug Administration blocks entry of effective new drugs into the market for many years, and drives the cost of developing a new drug to about $800 million. While the sale of drugs is being blocked, people are suffering and dying.
The Drug Enforcement Administration, Clinical Laboratories Improvement Amendments, Emergency Medical Treatment and Active Labor Act, Health Insurance Portability and Accountability Act, Stark laws, state-mandated insurance coverage for specific services, abuse of court power through malpractice, and even licensure itself, all combine to tie the health care industry into knots of red tape. There is very little free market at all left.
The ray of hope shining through our fog of government interference is found in the doctors who choose to stay as far out of it as they can. We are not a large percentage of doctors, but we are becoming more known. We can try to influence other doctors to do the same. We can try to educate the citizenry. We can try to slow down the advancement of socialism in the halls of government.
The free market is the most moral and effective approach to health care, as it is to our other economic activities. It has brought better goods and services to people than any other system. It is time we restored free markets in medicine. Health care is much too important to let government continue to mess it up.
August 4, 2006
