What a Toothache Taught Me About Healthcare
I spent the week in paradise--on a "spring break" vacation with my family--and I can attest with the utmost certainty that it is better to spend a week not thinking about healthcare than thinking about it.
But truth be told, not thinking about healthcare got me thinking of it. And eventually in need of it. That's because in the midst of a whale-watching, snorkeling, waterfall-exploring, pool-supersliding, beach-bumming island vacation, I had one heck of a toothache. I grimaced with each bite of anything harder than papaya, jumped from my chaise with the babiest baby-sip of colada--but still pushed off calling a dentist until...my wife called one for me. (The one thing worse than having a toothache on vacation, it appears, is vacationing with a spouse who has a toothache.)
She found an amazing dentist and I'm grateful for it. But the long and short of this episode was that the need for healthcare found me. And therein lies a lesson or two for anyone who hopes (in earnest) to reform it.
As we saw in the past few weeks, as Republican party leaders pushed for Trumpcare and then abandoned it, there is a small and determined group of lawmakers who don't want to "fix" or replace Obamacare, but rather to repeal it outright and then institute a purely free market system in its place. That system, in theory, would let those so inclined buy healthcare (or insurance coverage for healthcare) when--and only when--they want it, and would leave those who don't want it (or can't afford it) alone. That's, after all, how the market for Froot Loops works--and the one for mobile phones and for Supergirl-inspired Halloween tutus for your dog or cat.
There is a certain appeal to such economic liberty. And for four days or so, I myself was a Freedom Caucus'er--dead set against trading an afternoon of precious vacation for one in a Maui strip mall with a jawful of drill.
I lost that intellectual battle not because of the nature of free markets, but rather because of the nature of healthcare itself. Here are two fundamental reasons why:
A medical need--whether it be a tooth infection, pancreatic surgery, chemotherapy, or gunshot wound--is called a "need" for a reason. Dare the thought that you can't afford a box of Froot Loops or a new iPhone or a tutu for your pet. It's okay: You can probably live without it. But those who require urgent care will still have the same need for urgent care whether or not they have insurance. In the end, they might storm an emergency room to get it--which is what many without coverage still do (and which we still, collectively, pay for). And if they don't address the need, they might well die.
As a society, we're pretty good about recognizing that distinction in other contexts. When your neighbor's house catches fire, chances are you'd want firefighters to race to the scene to put it out. You'll probably even be okay with the fact that the fire department won't send your neighbor a bill afterward--and I'm guessing you won't post a sign on his front lawn saying, "Entitled!" or "Freeloader!" Freedom-loving folks though we are, we treat need differently than want.
Some of that distinction is due to the perception of shared risk, of course. A fire in your neighbor's house could spread to yours. But then, the same can be said for many infectious diseases.
This market may have unlimited buyers, but sellers are strictly limited by law. There is, apparently, no federal or state law that prohibits a person from selling a tutu for your shih tzu on , or for dressing your pet in one (though one might argue there should be). But our medical systems are thoroughly enveloped in laws and regulations, as well as practices so entrenched by guild or industry convention that they have the force of law.
Start with the obvious: We, as a society, don't give everyone the keys to the operating room, any more than we let Joe from the mailroom fly a commercial jet--not without many moons of training and a license, that is. So the healthcare market has a bunch of built-in monopolies, depending on the particular service being offered.
Those guild-protected medical providers also have another uncanny market-controlling power: They can demand that you pay (or more commonly, have proof that you can pay through insurance) before they see you--and before you see the bill. So medical consumers are on the hook for payment long before they know what the total cost of the service is, or how well that service was provided. Indeed, those who require a stay in the hospital will almost certainly have to promise to pay for services from providers they may never see--and who can charge pretty much whatever they want. Not many free markets work like that.
Sure, in the euphoria of liberty-cherishing DYI-philia, I could have pulled my own tooth and gargled in peroxide. But even then, I couldn't prescribe myself an antibiotic (which, it turns out, I needed). Our prescription drug trade may look like a free market--because sellers have proven over the past several years that they can charge whatever they want. But the government has thousands of rules about which pills and nostrums can be sold to whom, by whom, for what purpose, and when. The barriers to entry for those who want to create and market a new medicine are enormous--which drives up prices on its own.
It would be great, frankly, if healthcare did operate more like a free market. And there are some good ideas out there for how to push it in that direction. For example, Freedom Partners, a group supported by Charles and David Koch, suggested in a recent strategy memo that lawmakers change the current rules to let individuals and businesses purchase insurance plans across state lines, and "foster the creation of a market" for multiyear and even lifetime insurance contracts that would enable people to protect themselves, at least somewhat, from the financial ravages of a serious illness years down the line. At the same time, we should significantly raise the contribution caps on pre-tax health savings accounts and broaden the scope of what they can be used for (including, quite obviously, paying for insurance premiums or membership fees for primary care group plans). And importantly, we should rewrite the current statutes that largely prevent the expansion of telemedicine offerings across state lines. (Here's some background reading on that.)
As leaders in Congress take up healthcare legislation anew (as they have recently teased they will), they might consider these options--along with the sobering fact that healthcare, as we know it, is a long way from a free-market system now. And any "reforms" that try to instill this ethos by simply changing who pays for insurance and how is likely to be even less embraced by freedom-loving Americans than the flawed system we have now.
This essay appears in today’s edition of the Fortune Brainstorm Health Daily. Get it delivered straight to your inbox.
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