One of the things that came out of the US healthcare dÃ©bÃ¢cle was the curious false dichotomy that the only two possible approaches to healthcare were the NHS or the current American system. Now, the American healthcare system has many things going for it:
America has the highest quality treatment of any country in the world, and leads the world in medical innovation
But (and this is a very big but!):
the cost is simply too high
We know that their healthcare is good, even the Canadians concede it. And the Canadians are widely held up as an example of a society that has got it right, especially compared to the Americans. But healthcare in the States is horrendously expensive. I know that people who have long-standing health conditions can’t even get divorced because moving off their spouse’s health insurance will make it impossible for them to get their own – the insurers won’t touch you if have an existing condition, or they won’t cover any existing condition. That is surely a cruel and perverse incentive.
So, why is American healthcare so expensive?
The answer to that is actually straightforward, but those on the economic left simply donât want to admit it. It is, in fact, the same problem we have with healthcare in our country: People donât pay for their own care.
Yes, you read that right; the problem at the heart of the increasing costs of healthcare is the same on both sides of the Atlantic, despite us having superficially very different systems. In Britain, it is obvious to people using the NHS that the government picks up the tab. In America the cost is borne either by the government, by the patientâs insurance company, or by their employer. In both systems, it is ultimately the patient who pays; through taxes, insurance premiums or lost job opportunities because of the costs imposed on employers. However, the cost is never made apparent to people in the same way it is when shopping for other goods.
If you’re not aware of what something costs you, why would you behave any differently than an MP with a trough-sized expense account? The market mechanism needs price information to work. If the prices are argued out between people who are not actually using the service and the transaction occurs away from the people using the service, then the people using the service don’t really have any incentive to shop around to make the best balance of price versus “performance”. This not only leads to healthcare becoming more expensive and not becoming cheaper, but it also leads to less innovation in the actual health care.
Your health is not a “right” or something that must be maintained at any cost. If your health was that important, no-one would be overweight, no-one would eat sweets or chocolate or drink anything but water, no-one would smoke, everyone would eat only raw vegetables and exercise regularly, etc. Since nobody actually lives like that, everyone is making the implicit decision to balance their health with their enjoyment of life. And if you’ve made that decision, then the cost/benefit analysis of the level of healthcare you want is just another aspect of that balance.
By all means, have health insurance to help you manage the costs and the unforeseen. But let people get the market information to help them make more informed decisions.