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Thursday, October 15, 2009

If Health Care Were Cars

If health care were cars and cars were indispensable in our lives and we as a society “felt” that it was a right that everyone had a car but each person was responsible to buy their own car, each person would buy a car according to their means with most people buying a modestly priced car that served their needs. There would of course be those on either side of the affluent bell-curve buying either a more or less expensive car, but cars, none-the-less, that served their basic needs. There would of course be those that could not afford a car at all, but I’m sure society (or the government) could come up with a ‘safety net’ for them called “Medicar”. There would be car dealers competing with each other in a free market for those consumers who would of course negotiate with the dealers for a fair market value.

However, introduce a third party payor who comes to the consumer and says; “cars are expensive--pay me a monthly premium each month with a matching amount from your employer and you can have whichever car you want and in fact, you can trade in your car each year and for a little more money, we will even repair it for you at no cost to you should it break down. In such a system, which cars would we as the consumer request and the dealer as a provider recommend? I bet we would be seeing a heck of a lot more late-model Mercedes than Ford Focuses on the road.

Now, let’s say that after a while, the third party payers decided that they were not making enough profits or even—God forbid—losing money in such a system and they decided to limit the type of car you could get and how many times you could take it in for repairs. I would imagine then that there would be less Mercedes, but since there was still competition with other payors, there would be maybe more Cadillacs on the road.

To take the analogy a bit further, let’s say the payors decide that they are still not making enough profits and they come up with the brilliant idea of buying all the dealers and making the salesmen employees who together, are also the producers of the cars. Up to now, the dealers had a fiduciary, legal, and a moral responsibility to the consumer; that is to provide him or her with a safe and dependable car at a fair market price—especially if he or she wanted that consumer to come back. Now as an employee of the dealership and the payor, the salesperson has competing and conflicting responsibilities. He or she still has a moral and legal responsibility to the consumer, but a fiduciary responsibility to the person that signs his or her check. The consumer still expects a high quality car, especially because premiums keep going up, and the salesperson is stuck between recommending a high quality but expensive model and feeling the pressure of his or her employer to keep costs down. I would then imagine the salesperson offering a car of a little less quality or expense or both, but still with plenty of extras to satisfy the consumer like perhaps a Honda or Nissan—especially if he or she was afraid of being sued for recommending a less expensive model.

That is where we are today—with a costly and broken system with everyone expecting at least a late-model Honda and a costlier more high-tech model each year, even though a Ford Focus would be just as functional and a lot less expensive. The payors are trying to maximize profits for their executive bonuses and their shareholders and are doing everything they can to limit the type of car you get and even ration the number of times you can have it repaired or trade it in. The salesmen are perfectly content with their relatively nice salaries and benefits packages their employers—the payors—are providing them, including the fat bonuses they get every time they get you to take a Focus. The people that don’t have a car or one that is not dependable are crying the loudest—even though they represent a minority (about 14% of the total population at best) because they see everyone around them driving new Hondas and Nissans and they want one too. Of course, the individual states along with the government are providing some Yugos which are perfectly functional to some of the poorest of these individuals in a program called “Car-aid”.

Now what if we as a society decided that having a car was now a basic right for everyone—especially because our president said it is so? Would we make everyone buy a car and penalize those (and their employer) that couldn’t or those that just wanted to take a bus or a taxi or even walk? And if we did decide that everyone had to have a car, would we establish a public option system to compete with the private payers but still offer the same expensive and less efficient models as their competitors or would it be better and much less costly to enact legislation that would level the playing field and promote competition between the existing payors who control access, delivery, product, and cost with smaller and more efficient independent dealerships that can negotiate much better rates directly with their consumers and still provide them with a dependable and high quality car that would serve over 90% of their consumers? We could then let the big giants fight for the 10% of those that just have to have the higher end cars.

Lastly, if we decided that we had to go to a single payor car-provider system— would we require everyone to have a Focus or a Mercedes? I don’t know about you, but as a taxpayer, if I had to—I guess I wouldn’t mind paying for all of us to have a Focus if it was functional and served all of our needs, but I sure wouldn’t want to pay for everyone to drive a Mercedes if they don’t need it! I might even begrudgingly pay a little more taxes so our elected officials at the highest levels of government could all drive Mercedes—after all, we are the richest and most powerful nation in the world and we can’t have our politicians driving around in Ford Focuses or Hondas.

Now we haven’t even begun to discuss “Medicar” in our analogy with its huge budget and associated waste, fraud, and inefficiency trying to provide 30 some million elderly people with fully loaded Cadillacs. Nor have we discussed the ridiculous situation that an independent salesman and car producer who wants to sell his cars less expensively could not sell his cars to customers for a price that was fair and profitable—but below that that “Medicar” would pay a ‘participating dealer’ providing the same car— without the risk of being fined and going to jail.

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