This week, another exception to my usual blog topics of management and workplace-related issues.

(However, considering access to affordable healthcare concerns virtually all U.S. workers and their families, I feel such an exception is warranted.)

So for today’s post, an open letter to Senate Majority Leader Mitch McConnell and his Republican colleagues on Capitol Hill.

In it, I expose a flaw in the GOP’s proposed healthcare bill…a flaw it shares, ironically, with Obamacare.


 

Dear Senate Majority Leader McConnell:

You and your Republican colleagues in the Senate are on the verge of making a mistake.

If enacted, “Trumpcare” will fail for the very same reason the Affordable Care Act (aka “Obamacare”) is currently failing.

Allow me to explain.

The Senate/GOP plan—like Obamacare—represents a “market-based solution” to the challenge of providing all U.S. citizens with access to affordable healthcare. But for any market-based solution to work, the market itself must meet certain, very specific criteria. Unfortunately, healthcare markets do not meet those criteria, and never will.

Specifically:

  1. Consumers must be able to enter and exit the market of their own free will.

As any economist can tell you, markets simply don’t work if you are forced to participate.

Think of it this way: If you need new jeans, but feel they’re over-priced, you could wear the old ones (or something else) until prices drop, or they go on sale. There’s nothing forcing you or anyone else to buy anything, so jean prices more accurately reflect actual demand. In the case of healthcare, however, this is rarely (if ever) true. If you suffer an attack of appendicitis or break your arm, for example, you’re forced to participate in the market whether you like it or not. You can’t wait until doctors lower their prices (or for the next open enrollment period). As a result, prices in healthcare market will always be inflated. Consumers will always pay more than they should, and suppliers will always be able to overcharge – and the market will never be truly efficient.

And yet the current Senate plan—like Obamacare—fails to account for this.

 

  1. Price information must be made available to consumers for the products/services they’re planning to buy BEFORE they buy them.

For a market to function at all, consumers must know how much things cost. This is obvious enough. For example, imagine trying to comparison shop for those jeans if no one’s willing to tell how much they charge?

Now under the proposed Senate plan (just like Obamacare), consumers would of course have access to pricing information prior to purchasing a healthcare plan. But this is only the half of it. Given that most of these plans have a deductible (often quite high), consumers must be made aware of how much specific health services cost as well, and prior to purchasing those services.

So, for instance, before selecting a particular treatment (like a mastectomy), a consumer needs to first know how much the surgeons and hospitals offering this procedure charge in order to get the quality care that they can afford. But under the current Senate plan (just like ObamaCare) this information will be difficult, if not possible to obtain – either because physicians/hospitals aren’t required to disclose it, or because they honestly can’t say, since each patient case is unique. Nevertheless, a market cannot function efficiently under such circumstances.

And yet the Senate plan—like Obamacare—fails to account for this.

 

  1. Consumers must be able to understand what they are purchasing.

Few of us are trained physicians. Yet this is what we would need to be in order to make truly informed healthcare choices. In the patient care market, however, consumers have always had to trust someone else completely (either their doctor, or their insurer) to tell them what specific care they do, or do not need. But a market cannot function efficiently when this is the case.

And yet the current Senate plan—like Obamacare—fails to account for this.

 

  1. Consumers must not be impaired, or otherwise prevented from behaving rationally.

For a market to function efficiently, consumers must have the mental and emotional capacity to act in their own best self-interest. They must be “of sound mind and body,” in other words. But healthcare consumers are often anything but. Try making a careful, reasoned decision with a dislocated shoulder, for instance. Or try shopping for a healthcare plan while you think you’re having a heart attack. Again, a market cannot—nor will it ever—function efficiently if consumers are under duress while making healthcare decisions.

And yet the current Senate plan—like Obamacare—fails to account for this.

 

To summarize, healthcare markets do not meet several of the most basic criteria necessary for markets to function efficiently. A market-based solution to the challenge of providing affordable healthcare to all will therefore never work.

In light of this, I would urge you and your colleagues to pursue a more tried-and-true approach. For example, you might consider some version of a “single payer” system that works so well in many other countries. The Medicare model that is very popular with millions of voters in this country (including Republicans, independents, and Democrats alike) is another possibility.

Thank you for your time, and please let me know if I can be of further assistance to you in this matter.

Kind regards, etc., etc.

 


 

Your thoughts?

Otherwise, see you next Friday…