Without a doubt there is a huge moral dilemma when we talk about health. Does everybody have a right to health? This is a complex question that often causes me internal strife. The angel on my right shoulder tells me yes, everyone, when sick, should have the right to return to a state of well-being. The devil on my left shoulder tells me no, people make poor decisions purposefully, and those decisions should not be rewarded. Of course there are other reasons why people should have access to health care. For one, it does not benefit me, as a member of society, if I'm sick or if my neighbor is sick. From an economic perspective, he is less efficient, and if he gets me sick, he passes that effectiveness, or lack thereof, to me. What if, my neighbor cannot afford health care and I can? Am I still to suffer the potential consequences of my neighbors sickness because he or she cannot afford it? According to Shi & Singh (2008) the sick individual is not held responsible for his or her sickness. In other words, being sick is recognized as the legitimate basis for society to exempt the individual from his or her social role obligations (pg. 56). Thus, the answer to the question above is an obvious no, therefore the government steps in and [sometimes] offers to pay for his or her cost of care, to my benefit. Or is it? At what cost does this affect MY health care?
From an economic standpoint, health is a private ownership. Similarly, outputs related to optimizing health status can come provided at a price. As American citizens, we are all too familiar with the fact that nothing is free, but this does not mean that things should not be offered at a just price. In a capitalistic market, 'just prices' are determined by the relationship between the supplier and consumer. When the consumer demands less, the cost goes down. The opposite is also true. However, there should be a caveat to this when it comes to our health. There are times when no matter the cost of care we will pay whatever to just feel better. This creates a kind of monopolistic advantage for the health care market. You may be wondering if the prices you pay for your care are justified or not? While the answer to that question is subjective, I can tell you that most hospitals (currently) are not profiting. In other words, the revenue they receive does not cover their expenses. So when you look at your explanation of benefits and you see that a large astronomical dollar amount and say JEEZ, this price is ridiculous, just remember, your hospital or provider has expenses too. Which brings me to my next point, does your neighbors inability to pay for care affect the prices YOU pay? Like you and I have bills to pay, so do providers. These bills can be fixed costs, variable costs (employees), technology costs (MRIs, CTs, X-rays, etc..), supplies, and many more. When your neighbor doesn't front the bill, the government can, and sometimes will pay for a portion of the bill. The portion of the bill that the government pays is MUCH less than what the hospital needs to cover its expenses. Therefore, the difference between the cost is shifted to people like you and me who have insurance. This means, instead of having a $100 copay for an appendectomy, we might have a $300 copay because of our neighbor.
Additionally, I would like to mention that these government programs determine the prices they pay based on complex formulas. Let's say you are an owner of a grocery store, and I am your customer (the government) I fill my grocery cart up to the top and tell you that I am not paying more than $100 dollars for this cart even though the actual cost of all goods is $250. As an owner you would probably be upset, but I would just laugh in your face and tell you to deal with it. This is pretty much how the government intervenes into our healthcare and affects the prices of those that are insured. This is confirmed when Dewar (2010) states that indigent care has been found to be directly financed by taxpayers and private charities and indirectly by shifting costs to those with insurance coverage. Interestingly enough, "over one-half of the uninsured state that they have no trouble getting the health care they need for free" (pg. 4). When you have this type of intervention by the government to help 'allocate' health care resources you create a market where capitalistic principles cannot be followed. The people that suffer the most are those that use their hard earned money to pay for these services. Prices are unfair for insured individuals partially because this public allocation offsets concepts of the Adam Smith's "Invisible Hand". Thus, even when you don't demand these services with your dollars, SOMEONE is, and in the end you are the one that suffers, speaking strictly in dollars.
Lastly, when you have a market with government intervention the market trends towards more Marxist views. The way our current system is setup right now promotes market failure. The government should take full responsibility for our health care or stay out of it completely. We cannot have both occur because the market will never correct itself then. If you think your costs are out of control now, just wait when in 2020, healthcare expenditure is expected to reach $5 Trillion opposed to our current $2.6 trillion.
References
Dewar, D. (2010). Essentials of Health Economics. Boston: Jones and Bartlett Publishers.
Singh, D. (2008). Delivering health care in america: A systems approach. (4th ed.). Sudbury, MA: Jones and Bartlett Publishers.
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