Healthcare reform in the US: The dumpster fire of dumpster fires.

So once again we have the Republicans, after having 8 years to come up with an alternative healthcare policy, have delivered a mess called ‘The Better Care Reconciliation Act’ which not only fails but what makes the situation worse which is compounded further via the dishonesty by Republicans regarding the ‘Affordable Care Act’ aka ObamaCare – side note, I personally prefer a single payer healthcare system like we have in New Zealand but take from that you will:

1) It fails to explain to the American public why there is an individual mandate in the first place. It has nothing to do with ‘big bad Obama’ taking away your rights’ and everything to do with ensuring that a system that doesn’t discriminate against those with pre-existing conditions are able to get coverage without risking a death spiral in the health insurance market. You need enough young and healthy people paying into the system so that cost of those with pre-existing conditions can be offset.

2) The death spiral isn’t the result of ObamaCare but the result of Republicans getting rid of the ObamaCare Risk corridor stabilisation fund which would help during the transition as all Americans get into the insurance system. The first wave of people signing up being the sickest thus their costs would be immediate and need to be offset by the stabilisation fund whilst the healthier customers come in and buy up policies which will eventually balance out the initial amount of money that went out to cover the first wave of people who signed up.

3) The stabilisation fund was to bridge the gap (the period between sick people entering and then healthier people entering in later on) as to ensure that it didn’t go into the death spiral but thanks to Republicans cutting it (the stabilisation fund) the net result was a sharp rise in premiums and insurance companies leaving states but then again this has always been part of their (Republican) play book: “[policy] doesn’t work and we’ll make sure that [policy] won’t work by taking away the central plank that holds up the said policy”.

Are there issues that need resolving? Sure but what have the Republicans proposed other than the same reheated ideas that simply don’t work because healthcare is one sector of the market which the ideas of market forces cannot be applied – increasing costs don’t reduce demand (simply put, health is a need not a want so people generally cannot hold off until a ‘better deal’ comes along) and due to the highly regulated nature of the market (for good reason) the sorts of innovation that drive down costs take years to make it market not to mention the requirement to make back not only the initial investment but the costs of getting it to market in the first place (reduction in delivery is undermined by the cost of the final product due those inputs I talked about).

How does one deal with it? government intervention which ensures that a social good like healthcare is available in sufficient enough volume at an accessible price point hence government intervention; either directly such as directly providing healthcare by owning hospitals, clinics etc or indirectly through a single payer with strong regulations to keep costs under control. There is also invention in the education sector to also ensure that sufficient enough nurses, doctors and trained specialists are entering into the profession through subsidising education through lower fees and interest free student loans. Then there is bulk negotiation of pharmaceuticals from companies – horse trade over the prices and drive down the cost per unit, the company gets a secure customer who pays on time and the customer (aka ‘the tax payer’) receives value for money. At different points in the health sector the government can and does intervene to bring down the cost of delivery and you’d think with over 70+ years of national healthcare systems from around the world that America could learn from, they (America) still insist on re-inventing the wheel.

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