The US Healthcare System

Much has been written leading up to and since the passage of the Patient Protection and Affordable Care Act (e.g. Obamacare) health legislation in March of 2010 but I want to add my voice to the discussion.

First a couple of reference points

1. The US spent $7,960 per capita for total healthcare expenses in 2009 according to the OECD the most of any nation.
2. Medicare & Medicaid cost approximately $844B in 2011 according to the Congressional Budget Office.
3. Private health insurance covered roughly 1/3 of the $2.4 trillion spent on health care services according to the Congressional Budget Office.

Notice the years do no line up exactly in the 3 points above but using rough math the US government with just Medicare and Medicaid account for over a third of total health spending in the country and another third is covered by health insurance.

As has been discussed in several other posts on this blog government expenditures are anything but efficient (see here and here) and the same holds true with healthcare.  Government waste and inefficiency hampers every aspect of the system decreasing quality and access for all.  While some may argue that the government should provide access to certain groups of people (low income, the elderly, etc.), however, I would strenuously object.  While I certainly do not want to see people suffer I argue that this is one more area of our lives in which the government should not be involved.  Allow the free market to deliver what consumers really demand. 

A couple of indictments off the top of my head

1. The individual consumer to too often too far removed from the payment process and as a result there is virtually no price competition in the industry.  When we go to the grocery store we expect to see the price for whatever we are going to purchase before we put it in the cart and the newspaper (for the few people who still get one) and our mailboxes are filled with advertisements and pricing for innumerable products and services.  Yet healthcare is different because for many of us we only are responsible for a small portion of the cost (or at least we only directly see a small portion of the cost).
2. Why has the US government granted the American Medical Association (AMA) the sole ability to determine who is a medical doctor?  This was not always the case.  Lets give alternative medicine the opportunity to flourish.  Would this be as effective as traditional medicine?  I have no clue (though it seems silly to assume to think there are not other great ideas out there).  Ultimately the end consumer would choose which approaches are successful.
3. The drug approval process is a huge burden in terms of both time and money.  While I certainly want any drugs I take to be safe and effective I do not believe the only way to achieve that goal is through the FDA bureaucracy.  The time and money burdens simply mean that smaller firms are unable to bring new medicines to market and any new treatments must have a large addressable market.  Thus the government hampers life improving drugs from reaching shelves sooner if at all.
4. The more government involvement the more rent seeking and less innovation we will see from companies in the marketplace.
5. Our local churches and other private relief organizations are denied the ability to offer those most in need assistance. Private organizations funded by completely voluntary donations (unlike taxes which are anything but voluntary) and best equipped to know the needs of the populations they support and I can choose which, if any, of these organizations I wish to support. What would it look like if charitable organizations had anywhere near the $844B the government spent on Medicare and Medicaid in 2011? 

The intent of this post is not to come across as uncaring, if fact I see it as just the opposite.  I see the government as incapable of meeting the needs of those incapable of meeting their own needs.  I see private, voluntary organizations as the institutions we should look to to meet the needs of our communities.  I do not know how needs would be met but I do have every confidence that private enterprises would be able to do more with less, would be more inventive in their approaches and ultimately be more successful than any government ever could.