Healthcare Reform Myth # 5 - Healthcare reform and insurance reform are the same thing

There are actually two distinct interrelated problems with the US healthcare system. The first is that it is the most inefficient (expensive) healthcare delivery system in the world. The second is that nearly 50 million of us can’t afford health insurance. The second problem is to a very large extent a symptom of the first.

Right about now you should be asking yourself why those titanic intellects inside the beltway are working on "insurance reform" not actual healthcare reform. I can come up with two possible answers. Either they are too stupid to understand the real issues (probable) or they found out that actually reforming the healthcare delivery system itself just can't be done from a political perspective. More specifically the entrenched interests are just too powerful to be dislodged.

This focus on insurance reform (instead of healthcare reform) means that we won't be dealing with the main issue of costs this time around. Not to worry, we don't actually need the government to do anything proactive to solve the cost problem.

Here is the dirty little secret about the US Healthcare system - it's already socialized. Yep, that's right, over the past four of five decades the toxic combination of red tape and the "all you can eat" entitlement mentality associated with the third party payer model essentially removed a sixth of our economy from the very market forces that drive efficiency in all of the other industries. Think about it. Other than plastic surgeons healthcare providers don't actually compete on price or on quality. You can find out more information about your washing machine or your dishwasher than your cardiologist and we all know that a functioning free market CANNOT exist absent good information on price and quality.

Think I’m wrong? Take a look at the EMTALA legislation. This is the (unfunded) law that mandates all patients receive care in the emergency department regardless of their ability to pay. No different than requiring a restaurant serve all patrons anything on the menu regardless of whether or not they skipped the check last night. I’m not saying we let people die on the streets. Just that you can’t place an unfunded mandate like that on a private industry and not break it. The US healthcare system no longer operates as a functioning free market and until it does we have zero chance of controlling costs.

The good news is that it is a much easier fix than our leaders seem to think. All we have to do is decouple (untangle) the social services aspects (care for all) from the actual healthcare delivery system and then let the free market back in. We don't need more legislation we need a whole lot less of it. Limit government involvement to things like mandating transparency of pricing and quality as well as establishing EMR interoperability standards. Expand Medicare to cover everybody that otherwise can't afford insurance, and then remove the restrictions on healthcare providers that prevent them from competing and innovating.