Preston J. Miller - Former Vice President and Monetary Adviser
Published April 1, 1992 | April 1992 issue
No wonder U.S. health care reform is a hot issue. Since the mid-'60s, we've doubled the share of national income going to health care. Yet many of our citizens cannot get adequate care, and the alternatives, but the choice was ours. We did not then have to wait until some review board of medical experts or insurance representatives deliberated and eventually (we hope) approved our decision. Instead, the vet immediately started our chosen treatment and gave us Mick's medication to continue the treatment at home.
Before we left, the vet also gave us a computer printout detailing Mick's treatmentand one last choice. We could pay the bill by check or by credit card. We had no forms to fill out and no follow-up hassle getting a third party to pay our claim.
In sum, there was no muss, no fuss and no uncaring or unqualified third party telling us what we could do. We made the choices, and we bore their costs.
Our experience with Mick provides some insights about human health care. One is that health care and health insurance are not inseparable. Mick was able to get good care without any insurance. Similarly, many people still can get good care even though they choose not to buy insurance. And for many who would have to pay high premiums, that can be a wise choice.
In contrast, there are many poor people who cannot afford either health insurance or health care. Society's responsibility is to provide them with the care, not the insurance. To do that, we should be exploring other alternatives, like providing public clinics.
Another veterinary insight is that our health insurance system imposes tremendous costs. There are the obvious costsborne by doctors, patients and insurance companiesassociated with completing and shuffling forms. These costs were completely avoided with Mick's care. But more important are the costs associated with poor decision-making. Because we were presented with the costs of alternative care for Mick, we could make reasoned choices. That's not true for the care for the rest of our family.
Human health insurance basically prepays for all health care, so people have no incentive to choose cost-effective treatments and doctors have no incentive to suggest them. Since neither has the proper incentives, third parties, such as the government or managed care units, must step in to limit choices or control prices. Much of the bureaucracy, inefficiency and limitations on choice can be attributed to the way we have decided to pay for our health care services.
Let us return health insurance to its proper role: to protect individuals against large potential losses. Let insurance cover major medical expenses, but let individuals pay out-of-pocket for ordinary expenses. Then maybe all of us can get as good health care as Mick does.