In the debates about health care reform, I always appreciate it when someone actually throws a potential solution into the mix, rather than just complaining about the way things are/were/will be. The Happy Hospitalist has outlined his ideas for health care reform in a comment on his blog. I like the simplicity, and I like the fact that he’s thinking outside of the typical health care box on this one. But there are some issues that immediately come to mind, and I’m wondering if or how they could be ironed out.
The Happy Hospitalist would like to see a $5000 tax credit for each person, and then people can use that money to set up an annual contract for care at a local hospital. The idea here is that doctors and hospitals would shy away from wasteful treatment, since it would be coming out of their profits, and patients would be able to shop around for the best contract on the open market.
But what do we do about the people who would inevitably decide to use the $5000 on something else and not enroll in a contract with any hospital or doctor? Happy’s proposal seems to revolve completely around the free market, with no government involvement at all. So obviously no mandates or rules. I can imagine that there are quite a few people, especially the young and healthy, who might decide that they don’t need health care this year, and would rather not pay for it. But what happens when one of them has a sudden heart attack or falls and fractures his skull? Would he then pay market rates for his care? I assume bankruptcy would still be an option, and situations like this would still leave hospitals to deal with collections issues when they treat people in emergency situations who are not enrolled in their programs.
And then there’s the issue of competition. Happy makes a really good point in terms of the benefits of creating a system where hospitals and doctors have to genuinely compete with one another in order to attract and retain patients. This doesn’t really come into play in our current system – people just go to whatever doctors and hospitals are on their health insurance networks, and there isn’t a consistent way to compare outcomes, prices, and patient satisfaction.
But what would happen in small communities? In a large metropolitan area like Denver, we would presumably still have quite a few hospitals and hundreds of doctors in the system Happy has proposed. The competition for patients would likely mean that the overall standard of care would be quite good, since an under-performing provider would soon lose out to better facilities. But in rural areas and small towns, it might be quite a different story. In an area that could only support one hospital, there would be no competition to keep the level of care high. A set annual fee from each patient will tend to encourage providers to skimp on treatment, and competition for patients would be the mitigating factor here that would maintain quality of care. But if you remove the competition factor, what would prevent the single hospital in a community from shortchanging its patients in order to earn a higher profit?
Issues like this make me question the wisdom of trying to create a healthcare delivery system as a purely capitalistic, free market entity.