Artificially Lowering Healthcare Costs Will Impede Crucial Innovation

Health care expert Greg Scandlen sent out information about Pennsylvania congressional candidate Art Halvorson’s approach to Health Care Reform — it’s worth excerpting as just one more example of the fact that there are conservatives thinking and proposing. After that is an excerpt from health care expert Grace-Marie Turner from the Galen Institute. Here is candidate Art Halvorson:

REFORMING HEALTH CARE

Obamacare has been a disaster for America. It has raised costs, demoralized doctors, and deprived people of the treatments they need. It needs to be repealed.

But the alternatives promoted by Establishment Republicans aren’t much better. In fact, Republican leadership in Congress was in a near panic last year when it looked like the Supreme Court might overturn Obama’s “Affordable Care Act.” They had no idea what to replace it with. This, despite having six years to develop a better approach.

My opponent, Congressman Bill Shuster, has been part of this Establishment. He brags that he has voted 60 times to repeal Obamacare, but these are nothing but show votes. They have had absolutely no effect. Meanwhile, he has voted time and time again to continue Obamacare funding, thereby relinquishing Congress’ most important power – the power of the purse.

Both parties suffer from the same delusion – that a committee in Washington can dictate a “system” of health care that will work for all the American people.

Such a task is impossible for a host of reasons. The most obvious is that such a committee will always be dominated by a health care cartel of special interests. The drug companies, insurance companies, hospital companies, and all the others that make their living in health care will do everything in their power to influence such a committee – their very existence depends on it. The result will be a “system” that enriches each of them at the expense of ordinary Americans – taxpayers and patients.

There are a few fundamental truths about health care that politicians never acknowledge:

Every penny spent on health care comes from us — the citizens and taxpayers of the nation. We may pay for it in the form of taxes, insurance premiums, or lost wages on the job, but it is all our money – there is no other source.

It is all supposed to go to benefit us as patients. The purpose is not to enrich hospitals and insurance companies, the purpose is to provide for our medical needs. We pay the money out when we are well, in the expectation that it will be there when we are sick.

We have trusted other people – government agencies and insurance companies – to manage this money in the belief that they could do a better job than we could. But they have not done a better job of it. They have done a terrible job. They have created a health care system that is unaccountable, inefficient, inconvenient, bureaucratic, of questionable quality, and far too expensive. We could not have done a worse job if we tried.

Not everyone needs, wants, or can manage insurance for all their health care needs. Insurance of any kind is very complicated. Contracts are incomprehensible. The policies and procedures are needlessly complex. Knowing what services are covered under what circumstances by which providers and at what cost is nearly impossible. Plus, in recent years it has become the insurance bureaucrat who has more to say about your treatment than your own doctor. These bureaucrats know nothing about you, they have never met you, they don’t have a clue about your hopes or fears or your physical and emotional resources.

Here is Grace-Marie Turner:

Artificially Lowering Costs Will Impede Crucial Innovation

Of course people want low out-of-pocket costs, low premiums, and access to unlimited health care. But after being burned by politicians’ promises, Americans have learned the hard way they can’t have it all. Low out-of-pocket costs are an illusion, an idea that distracts consumers from the real problems of our health-care system.

Lowering consumers’ perception of their share of health costs isn’t the answer. Giving them more control over their health spending is.

Fifty years ago, Americans paid nearly half of their health spending out of pocket. Today, they pay just 11%, and only 3% for hospital bills. And because they rely on insurance and government health plans to pay most of their bills, they have no idea what a medical product or procedure actually costs. This lack of price transparency leads to hospitals charging $19 for an aspirin or $300 for an ankle brace that costs $21 at the drugstore.

If patients were able to see and compare the real cost of the products and services, the health-care sector would innovate around things the consumers value: lower costs, more options, and providers who are more responsive to patients’ needs than they are to those of bureaucrats…

Here is more from Turner:

Doctors who stare at computer screens rather than look at their patients. Mountains of incomprehensible medical bills and statements. Soaring premiums and deductibles. What do these have in common?

They are the result of a system that does not provide meaningful incentives for innovation, cost-efficiency or higher-quality, consumer-friendly health care.

Of course people want no out-of-pocket costs, low premiums and access to unlimited health care. But after being burned by politicians’ promises, Americans have learned the hard way they can’t have it all. Low out-of-pocket costs are an illusion, an idea that distracts consumers from the real problems of our health-care system.

I blame it on the Affordable Care Act, which has created a system with the worst of both worlds: high premiums, high out-of-pocket costs, and restricted access to providers—all of which place significant barriers to access to care. Enrollees in health exchanges often pay $500 or more a month in premiums for policies with deductibles of $3,000 to $6,000. That can mean spending $12,000 a year before insurance kicks in. Most consumers facing these costs might as well be uninsured.

Lowering their perception of their share of health costs isn’t the answer. Giving them more control over their health spending is.

Fifty years ago, Americans paid nearly half of their health spending out of pocket. Today, they pay just 11%, and only 3% for hospital bills. And because they rely on insurance and government health plans to pay most of their bills, they have no idea what a medical product or procedure actually costs. This lack of price transparency leads to hospitals charging $19 for an aspirin or $300 for an ankle brace that costs $21 at the drugstore.

Read more: Wall Street Journal