I studied Economics for four years in college, including a crash course on the health care systems of the world in a Public Policy class. The previous statement pretty much establishes many of the other things I want to point out: I'm smarter than average, I have a general sense of how taxes and policies work, I've paid attention to the happenings of this reform, and I feel I have a correct solution. Some of the facts I put on here may not be directly cited, but they are facts. If you feel you need a citation, I will be able to provide one.
However, some disclaimers. If you find something wrong in my case or disagree with me, just refer back here.
I'm not a genius [close though ;)]. There is a lot I (and most others) don't know about this whole reform, and I may be wrong on some things I say here. I'm not a politician or a lobbyist. I'm not a professional economist. I'm not any sort of advisor. Although I am officially in the Democratic party, I don't find myself always agreeing with the left side. My argument is very basic and simple. I don't know what hidden effects could happen if they did what I suggested. This blog is probably the closest I'll ever come to being any sort of a media outlet. And most importantly, this is all just my opinion, maybe shared by others, maybe not.
My opinion on health care reform is that I don't care. That is, I don't care whether health care in this country stays completely privatized or goes completely public or provides a public alternative to private companies. But I do know it needs to change. This is the opinion I have as an economist (not professional). I want change for efficiency's sake, and really that's what's wrong with health care in the US. It's not efficient. The US spends nearly twice as much on health care than the average industrialized country, yet it consistently underperforms. One of every six dollars that we the people spend goes to health care, and yet we have one of the lowest life expectancies of industrialized countries. BUT it is not because we have at this point completely privatized health care. It's not the private sector, but really the fact that the insurance market is not acting like a free market is what is hampering us, being tied mostly to the job you have, it's a very restrictive market.
Now for some basic but idealized economics. A free private market (which we don't have) creates competition. Competition in a market drives companies to better their products (provided no collusion) to get more customers. This means simply better health care. It does also mean higher prices, though through labor economics (something I know a lot about) if companies don't pay for health insurance they are more inclined to raise wages which means employees can more easily afford it. They get higher wages and pay lower taxes since the government doesn't cover their insurance, they pay for it out of pocket. The competition also means that customers of able to pick and choose the type of coverage that fits them best (an *efficient* outcome).
[An Aside: One reason for high health care costs may come from one of our basic rights in the Constitution, our right to sue. Since we can sue our doctors, they more often than not settle out of court for large sums. They must also pay for their own malpractice insurance. By increasing their costs and hospital costs, they in turn are forced to raise costs for all the services they provide, which gives incentive to patients to sue doctors because they can't pay their medical bills and they realize they can get some money if they sue. One vicious cycle.]
In a completely public health care system, it's about the complete opposite. The prices are much lower and everyone is covered. Good thing? Yes, but having a universal health care system is a monopsony (one provider of a good or service) and restricts the amount of coverage an individual can get. And if run by the government which they all are, the government gets to pay for it. To pay for health care, government needs taxes, and it needs to raise them. Look at the countries with completely government run health care and then look at how much their citizens pay in taxes. We would all love to be covered, but it definitely would take money from your paycheck, and for some stupid reason people don't seem to comprehend this. However, the higher taxes and greater government spending mean this is also an *efficient* outcome.
We have in this country right now is a mixed market system, with a very restrictive private health insurance market and no free public option, despite the government accounting for 45% of health expenditures. That's why 50 million Americans are uninsured. Obama wants to include the free public option for insurance. Two teensy weency problems: he doesn't want to raise taxes (most politicians don't because it looks bad) and we are over 11 trillion dollars in debt and counting. How he intends to pay for a public option is beyond me. In fact, a hillbilly-sounding mustache-sporting NRA-member from Montana asked him that very question over the weekend. Bravo to him. I only wish I had actually heard his answer but an actual accredited news source The Daily Show is not. I love it, but it's not news, it's comedy, damn good comedy.
What Obama appears to intend to do is provide a public option alongside the private insurance companies, and move us closer to the two-tiered system that the UK has. That's fine, but in order to do so Obama needs to raise taxes. That's the price we as citizens pay. I'm OK with it. I don't care if we drive insurance companies out of business and everything is provided by the government, as long as the government taxes the shit out of us to pay for it. I don't care if we stay privatized to leave taxes alone, but a free market needs to be created and we don't have that. I don't care as long as we are being efficient because that is our biggest problem.
I've always been a person to want to get things done efficiently, so it almost seems like economics was made for me. Much of it is ideologies, and it does dishearten me at times that some theories can't be put into practice. I know it's not easy to change health care. Historical evidence suggests that health care reform is mostly evolutionary, not revolutionary, meaning it may be very hard to change the system we run through force, which seems to be what we are trying to do. However, I hope whatever the government tries to push through gets passed, preferably if it conforms to some standards of efficiency, because whatever we have now isn't working.
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