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Let consumers make health care choices

Originally published in the Baltimore Examiner

By Marc Kilmer
Published on Thursday, April 03, 2008
OP-EDS

BALTIMORE - The other day my 6-year-old niece told her mother that she thought the family should buy a boat. Her mother tried to explain to her how much boats cost, that the family needed to spend money on other things, and an elemental conception of having finite resources. To a 6-year-old, however, none of that mattered. She wanted a boat, and she saw her parents as having limitless resources to provide any desire she wanted. If they didn't buy a boat, it was because they selfishly wanted to keep her from enjoying it.

Most people grow out of this type of thinking about money and resources when they are adults. Unfortunately, when it comes to promoting a health care system funded solely by the government (as they have in Canada), many in our state are little better than a child who thinks her parents won't buy a boat just to spite her.

Politicians and activists who want government-financed health care claim Marylanders need to be protected from the "evil" of health insurance companies. Whether through denied claims, denied coverage or high premiums, insurance companies are blamed for the ills of the present system.

The only solution, according to these folks, is to eliminate them and give the state the power to run the health care system. Then we will all have as much health care as we need.

These proponents forget that no matter what health care system a nation has, only a finite amount of health care can be provided, and that care costs money. As a result, there must be some way to ration that care.

If you do not allow a pricing mechanism through a free market to allocate care, then you have to empower someone to do so. Under a single-payer system, government bureaucrats will get to decide who gets what kind of care.

Single-payer advocates reply that the current system puts private-sector bureaucrats - in the form of insurance companies - in charge of rationing care. That is generally true. And they are right in saying this distorts the necessary interaction between patient and doctor. But if they think this distortion is different in government-financed systems, they are wrong.

In Canada, for instance, one study estimates that actual waiting time for medical care exceeds reasonable standards more than three-fourths of the time. Other studies attest to long waiting times for care that is given relatively quickly in the United States.

But the issue really is not whether one system is superior to others. It's the notion that somehow government-financed systems avoid the problems that plague U.S. health care. They do not. They merely shift the decision-making about paying for care from private insurance bureaucrats to government bureaucrats. Either way, a third party is making health care choices that should be properly made by a patient in consultation with his or her doctor.

We need to move away from the notion that health care is someone else's responsibility. Government subsidies for employer-sponsored health insurance have produced a system that gives too much power to insurance companies, as single-payer advocates contend. But the answer is not to empower government bureaucrats to make those same decisions. Consumers should be in charge of their health care.

Instead of health insurance paying for routine health matters, it should truly act as insurance - covering high-cost, low-probability health problems. Coupled with an expansion of tax-free savings accounts to pay for routine, low-cost health care (along with safety-net health care programs like Medicaid for the poor), a movement toward true health insurance would be a much better way to reform our health care system.

Just as a family cannot buy a boat for its 6-year-old just because she wants one, there will always be the need to allocate a finite amount of health care. It's time that patients, not bureaucrats (whether private sector or government), are the ones to make the choice about what kind of health care they receive.

Marc Kilmer is a senior fellow at the Maryland Public Policy Institute.

Examiner