How Health Care is Poisoned by Government

by Robert Arvay, Contributing Writer

Conservatives frequently advocate for the privatization of government services and, while that’s a good idea, it’s not enough. Even the smallest involvement by the government can poison the best privatized system. My own experience may shed some light on this.

About a year ago, I went to a hospital emergency room, doubled over with abdominal pain. I was admitted to a ward upstairs, and kept for three days while tests were run. I was diagnosed with an infection, and a couple of other medical problems that were discovered incidentally. After treatment, I was eager to get back home, and finally was released from the hospital.

After a small co-pay, I was happy to see that I would not have to pay any part of the multi-thousand-dollar hospital bill. My insurer is Tri-Care, a government funded program for military personnel, including retired veterans such as myself.

A year later, I received a notice from Tri-Care, which stated that the hospital cannot bill me personally for the care I received, but that Tri-Care will not fully pay the hospital either. Technical reasons were given, but from what I understood, someone at Tri-Care had ruled that not all of the treatments provided by the hospital were medically necessary – at least not in an in-patient facility. I’m not sure what percentage of the bill the hospital was paid, since the insurers explanation was long and complicated.

Since I am neither a medic nor a lawyer, I cannot take sides in the dispute between the government and the hospital. On the one hand, I am reminded of the criticism that the government cannot reduce the costs of medical care, but it can refuse to pay those costs. On the other hand, I am reminded that when hospitals expect the government to pay the bill, they have an incentive to provide unneeded services, so as to maximize their profit.

I do not think the hospital did that, but in borderline cases, the temptation can certainly be there. With legal litigation always a possibility, the incentive is to order more tests, not fewer.

I have mixed feelings about this. On the one hand, the hospital gave me excellent treatment. On the other hand, I’m glad that someone in the government is guarding taxpayer dollars. On the third hand, if you have one, the hospital will probably be forced to give future patients less thorough care than they gave me, or go out of business.

The recent scandal at the Veterans Administration (VA) clearly shows that a one hundred percent government run healthcare system is guaranteed to reduce care, increase costs, create the environment for criminal fraud, and get innocent people killed in the process. And no, I do not need yet another inspector general report to draw that conclusion.

What about the other extreme? What if the government paid none of the costs of medical care? Well, we all know how horrible that would be. The steps leading up to the hospital door would be littered with the corpses of people who had sought care, but could not pay for it. Cold-blooded administrators would form “death panels,” and only the wealthy would survive such a system. We all know that, don’t we?

Of course not, but first let’s look at our middle-of-the-road solution, one in which the government and the private sector have formed a so-called partnership.

This partnership began in World War II, when the factories of war employed millions of Americans. In order to keep down the material cost of war equipment, it was against the law to give pay raises to workers. Corporations wanted to do something to make their employees more happy, and so they “gamed the system,” although much more mercifully than the VA administrators gamed their system. The corporations got around the “no-pay-raise” law by offering free health insurance to their workers. While this seems to have been a good thing, it was actually the poison pill that helped get us into the health-care mess we are in today.

Prior to the war, when Rosie the secretary got sick, she went to the doctor with her meager paycheck in hand. The doctor tailored his health-care strategy for Rosie to fit her budget.Rosie had every incentive to scrutinize her medical bill, and keep the cost low. The doctor also was motivated to provide the best care within Rosie’s means. It was far from a perfect system, but in general, it worked well enough for most people.

Once Rosie became the Riveter, and had health insurance, things changed. If the doctor ordered an extra test or two, “just in case,” Rosie did not have to pay for those tests herself. The insurance company paid. Costs, predictably, began to rise.

While this system seemed at first to be a free market at work, it was not. The health insurance benefit at work was provided to circumvent a law, a government regulation. Rosie could not, because the government forbade it, tell her employer, “Just pay me more, and I will find a cheaper, better health plan for myself.” No, Rosie had to accept the group plan, or get nothing. The government involvement was small at first, but the snowball had begun rolling.

The key to it all was that, even with minimal government interference, incentives had become skewed toward higher costs. Other medical decisions had already been taken out of the hands of the patient and the doctor, and placed under control of insurance companies and government bureaucrats.

Today, there is no more free market in the health care system. Every nook and cranny of it is either directly or indirectly affected by government regulations, regulations not designed to benefit the patient or the doctor, but to benefit the regulators and the politicians.

Even the VA scandal is not being addressed to benefit the patients. If it were, then the problem would be solved today, not waiting for yet another—another—inspector general report. The scandal has been well known for decades, and nothing was done about it, not until it became politically expedient. What is being done, however, is not going to fix the system, but will only provide cover to the politicians.

The VA scandal is a harbinger of catastrophe yet to come. Once a complex system has become poisoned, the poison will continue to work its ravages until either death or a cure results.

The cure is not to issue “vouchers” to patients. To be sure, that has now become the deal with the devil that cannot be avoided, but the cure is to get the government completely out of the health-care industry. Completely. Issuing vouchers will simply require the taxpayer to fund health care for deserving veterans. It will require government oversight. It will put private hospitals in the no-man’s-land between ordering too many tests, and therefore having payment refused by the government, or on the other hand, ordering too few tests and getting sued for malpractice.

In the short run, there is no way out of this. In the longer term, there is a solution.

Many will object to the only solution, sometimes on specious grounds, but sometimes quite sensibly. Even so, it’s the only way out.

People will object, for example, out of concern for the grievously wounded war veteran who faces a lifetime of very high medical bills. The government medical system has already been shown to fail these men and women in too many cases. Fortunately, American citizens have stepped forward, volunteering their time and money to pay for the gaps in care that the government refuses to pay. There is the Wounded Warrior Project, for example.

Fox News host, Bill OReilly, for another example, organized Americans to raise money for a motorized wheelchair called the track chair, designed to enable patients missing some or all of their limbs to get about, even in outdoor terrain. Why doesn’t the government pay for these chairs? They seem to have money for health care for illegal aliens and terrorists – why not for our wounded warriors? It’s just another example in which the government provides funds, but only to what helps politicians.

On the other hand, if the government does get involved, matters will be made worse, not better.

The health-care system has become so complex that instead of seeking a perfect solution, we must seek the least bad one. The government is so thoroughly corrupt that it will never promote a real solution.

The goal, whatever happens before we reach that goal, must be to get government completely and totally out of health care, and while we are at it, out of the schools, out of mail delivery, and out of every conceivable area where the Constitution does not explicitly require it.

That will be a bitter pill to swallow, but not a poison one.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s