Healthcare Efficiency

The year.  Day one, full of hope and expectations of something new for healthcare.  The looming ‘08 elections will probably stifle anything dramatic or creative from Congress, but maybe there will be something.  Lots of pressure to provide coverage for the uninsured, but little agreement on just how to do that.  Hard to argue against motherhood and helping the uninsured.  (As James Whitcomb Riley wrote, “help the poor an’ needy ones ‘at clusters all about, er the Goblins’l getcha, if you don’t watch out.”  However, both motherhood and insurance for the uninsured will increase healthcare spending and raise costs for individual services.  (See writings here previously suggesting that insurance is partly to blame for high healthcare costs.)

Employers want more flexibility to design health insurance plans that are less expensive.  That doesn’t set well with advocates who want the same benefits for everyone--well, everyone except Congress.  (They have their own plan that mere mortals could never afford.)  Any expanded coverage will cost money, and Congress will work hard to see that the money doesn’t come out of the federal budget--that is, if they ever get around to passing one.  (That’s right.  No budget yet, and not likely to be one.  Ever.)

In the end, there will probably be some expansion of benefits under Medicaid and more pressure on more employers to provide more health insurance to more workers.  All that means more money coming into the healthcare system but no incentives to lower prices.  Efficiency will not improve--no reason to expect that.  

What would it take?  A goal and a strategy.  (No, not Iraq.  We’re talking about healthcare!)  Everyone complains about the high cost of healthcare, so let’s set a goal of reducing costs.  That means total expenditures for the country and the cost of individual healthcare services.  OK, we’ll throw in drugs too.  Strategy?  Quote in the Washington Post today, “If it (strategy) is wrong, it does not matter how well you execute, you will fail.”  So, make a plan that has some chance of reducing costs in individual healthcare products and services.  How about competition?  It did wonders for the computer industry.  Right now, it’s hard/impossible for the patient to know what healthcare costs, much less make purchase decisions based on price.  And Congress seems unlikely to fix that.