I voted for Virginia Foxx in the recent general election. Part of the reason I did was her opponent wouldn’t even call me back. If Josh Brannon refused to return my phone calls before the election, how could I expect him to be a responsive representative after the election?
Additionally, I generally like Foxx. A conversation with her — whether as a citizen or a newsman — is always cordial and enjoyable.
I’ve also always been a small government guy. I used to believe the federal government ought to exist only for the purposes of maintaining a military and printing a currency.
I believe everything works out in a free market — at least, almost everything.
Let’s take the example of a television. Mine died, so I began shopping for one recently. I have a plethora of choices, and I know all of the prices up front. If the 52-inch is too expensive, I can go with the 46-inch. Perhaps, they are cheaper at Walmart than at Best Buy.
In the end, if they are too pricey, I can simply go without one.
You have to price your product at a price at which it is likely to be purchased. That’s capitalism.
Also, I certainly don’t want the government controlling the television market. The layers of bureaucracy in government would turn the television market into a mess. We would get new technology decades after the technological breakthrough actually occurred, and my TV would always be produced by the lowest bidder — unless, of course, the second lowest bidder had a good buddy in Washington D.C.
At one of Foxx’s recent appearances, she declared the free health insurance market could provide a better deal to those utilizing the product. I’m sure a lot of her fans loved this remark. It’s like preaching the Bible to Christians or the Koran to Muslims.
If she had been talking about televisions, she’d be absolutely correct, but can we really apply the same free market rules to healthcare?
One can shop around for the television. The prices are easy enough to find. Try calling a dentist’s office and asking how much a root canal will cost. I have. The answer you will get is they can’t possibly tell you. There goes shopping, I guess. You have no idea who offers the best price. By the way, your tooth still hurts.
So let’s apply the next argument: just go without the television. Depending on how badly your tooth hurts, that might not be an option.
My point is one cannot apply the traditional arguments that support capitalism to healthcare. That is, unless we are willing to simply let people die. Prices come down when nobody buys the television. The only way to bring prices down in a free market system is for people to refuse to purchase the product. The trouble is, when you need a tumor removed, not purchasing the product isn’t an option.
In short, those providers have almost complete control in pricing because there is no option B. In order for the rules of capitalism to apply, the consumer must be the one in ultimate control, and the consumer is not in control if he or she does not have the option to forgo the purchase or even shop around.
Now on to my next point. The government can absolutely provide cheaper healthcare than the free market.
At one point in my life I did contracting for a health insurance company. I absolutely hated the job. In fact, it was a big part of remembering what 5-year-old Andy wanted to do with his life — jump out of planes and kill bad guys. That stated, I got some good insight into the industry.
The government gets the absolute best rate for health care services. We used to compare the rate we got to the Medicare rate in order to discern whether we were making a good deal.
For instance, Medicare might pay $4,000 for some procedure.
Bottom-dollar deals seemed around 120 percent of Medicare. Which meant that $4,000 procedure almost certainly would be billed to an insurance company at $5,000 or more. Worse, we might pay 400 percent of the Medicare rate to a facility we really needed to make available to those we covered.
There was different guidance depending on what services we were paying for and the difference in the market in that area, but the closer we could get the rate we were paying on behalf of our member to the Medicare rate, the better the deal.
Much of the time, an entity’s charges were 800 percent of Medicare rates or more, meaning if you had no health insurance — if you had no bargaining power — you would get billed eight times what Medicare would pay for the same service.
So here’s my second point abridged. The private market can’t provide a service for cheaper (insurance premiums) than the government when those in the private market pay more for the same medical services. Foxx’s conclusion just doesn’t follow a simple line of reasoning.
Instead, it’s just a soundbite to inspire those who want it to be true. Unless we are willing to let people die, the rules of capitalism don’t apply to health care.
Andy is a staff writer and may be reached at 415-4698.