Reason.tv: How to Fix Health Care—Lasik surgery for the medical debate

Make no mistake about it. Health care reform is coming. But what's the best way to fix our health care system, which is an inefficient, complicated mess of private actors, third-party payers, public subsidies, and innumerable state and federal regulations? Should we place our faith in the government or in the free market?

ObamaCare supporters argue that the answer lies in more government—more subsidies, more regulations, a law mandating individuals buy health-insurance coverage and, of course, more taxes to pay for it all.

The alternative is to base reforms on what works in the other five-sixths of the U.S. economy, where choice and competition increase quality and drive down prices over time.

Can a market-based health care system work? We can begin to answer this question by looking at Lasik, a medical procedure that's not covered by health insurance. And has gotten better—and cheaper—over time.

"How to Fix Health Care" proposes three simple reforms that will put us on a path to a health-care system that's better, more affordable, and more accessible. And get this—these market-based reforms can be implemented without creating new government programs or raising taxes.

Approximately 8.30 minutes. Produced by Paul Feine and Meredith Bragg. Hosted by Nick Gillespie.

For downloadable versions of this and other videos, go to Reason.tv.

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Comments

[robc]

ReasonTV is stealing my reform proposals. 🙂

[Warty]

I got lasik a few months ago. I learned that the most horrifying words in the English language are, "Eye suction...on."

[R C Dean]

When I had Lasik a few years ago, I asked the doctor what my name was. He chuckled, thinking it was the heavy, heavy meds. I was serious, and told him I wanted to be damn sure he was cued up to fix my eyes, and not someone elses.

Best money I ever spent, BTW.

[Warty]

RC, did you smell the tissue of your eyes burning when you got it done? That was aLovecraftian horror.

[Russ R]

My experience was much more Kubrick-ian. Equal parts A Clockwork Orange and HAL 9000.

[sixstring]

That right there is enough to know I'll go with stylish glasses if the vision ever fades.

[Sudden]

These basic principles and ideas for truly effective reform seem so self-evident to me that I often wonder how both the electorate and the political class fail to see them.

[Jersey Patriot]

Lasik also isn't like most of the healthcare market, in that it is elective and cosmetic. Chemotherapy less so.

[David Jordan]

Exactly.

[mark]

Less elective, but there could still be a multitude of choices. Not everyone wants to get the same kind of chemo; hell, some people refuse chemo at all because it's so hard on the body. A more competitive market for oncology would be a good thing.

[akwilco]

Your assumption that the health care system is/can be market based is inherently flawed. While Lasik surgery advertises prices (e.g., is market-based), when was the last time you heard someone price-shopping for a hospital emergency room or getting three quotes for open-heart surgery? The current health care system is driven by availability (is the health care provider listed by my insurance as a "preferred provider" - a form of health care rationing) and convenience (when your child breaks his leg you go to the nearest doctor, not the cheapest).
A better solution might be to regulate health care as the monopoly that it is, similar to the way public utilities (water, electricity, telephone, cable tv) are regulated. Public utilities are a useful analog for looking at how to control health care costs.

[Big Chief]

The majority of health care dollars aren't spent in the emergency room. The vast majority of health care dollars are spent on non-emergency procedures. No one rushes into chemo-therapy.

My doctor recently suggested a new medication as an alternative for my existing allergy medication. But she couldn't give me a price. Nor could the pharmacist without a prescription. My insurance website had the information, but it was off by over 20%. THIS is the problems with the healthcare system. When you can't get prices, or see the way hospital pricing is done, it's obvious that the system is flawed and long way from being "free market".

[HeadTater]

... because our utilities and other infrastructure work so well in comparison to other industries.

[Tim]

Great strawmen, no one is suggesting getting rid of insurance for things like heart attacks. Mainly, it shouldn't cover routine non-ruinous events. The kinds of things people can easily shop around for. Your assumption that the majority of health care is like a treating a heart attack is inherently flawed, and as others pointed out it's not ER costs that are driving up costs in general; while most of the current reform ideas have little to do with keeping the evil E.R. doctors from abusing their position to extract wealth from desperate customers and everything to do with getting one portion of the population to subsidize another.

[ReAnimator]

when was the last time you heard someone price-shopping for a hospital emergency room or getting three quotes for open-heart surgery?

This is what insurance would be for. The whole point of insurance is catastrophic, unforseen circumstances. You don't have home owner's insurance for when the house needs a paint job, but you want it in case it burns to the ground. When it comes to routine check-ups and basic procedures, many people can pay out of pocket and take the time to shop around for the best price and service just like they would for anything else they consume.

[Fiscal Meth]

akwilco, which medical services are among this monopoly? Just emergencies or chest colds and splinters too? Would pay-per-view be like open heart surgery in your cable analogy or would that be more like the full sports NFL Sunday Ticket.

There is actually no use for your analogy. You cannot have one size fits all health care pumped to your house through pipes or wires. A useful analog for looking at health-care is car-care. Get insurance for the unpredictable, save up for the rest.

[Warty]

I can't wait to get the same kind of service I expect from Comcast from my doctors. Capital idea, good chap!

[LarryA]

And get this?these market-based reforms can be implemented without creating new government programs or raising taxes.

So it's DOA in DC.

[LarryA]

The current health care system is driven by availability (is the health care provider listed by my insurance as a "preferred provider" - a form of health care rationing)

If you selected your own health insurance plan based on your needs, as opposed to your employer selecting what's best for the business, you could change that.

and convenience (when your child breaks his leg you go to the nearest doctor, not the cheapest).

Really? One of my neighbor's kids sprained an ankle recently, but it could have been broken. His mother drove right past the big hospital emergency room to go to a Doc-in-a-box. Much faster treatment at a fraction of the cost.

[R C Dean]

RC, did you smell the tissue of your eyes burning when you got it done? That was a Lovecraftian horror.

No. The technique they were doing on me required (as best as I can recall; did I mention the heavy, heavy drugs?) running ice-cold alcohol on my eyeball while it was being blasted by the laser. So, no roasty smell.

[Joe]

I have what this video talks about, and I love it. My fear is that the government is going to screw it up.

I buy my own insurance for $150/mo. It has a $4000 deductible and 100% coverage above that amount. I pay for everything under that with the HSA that comes with the plan. It's cheap, the coverage is great - nice prescription discounts, free physical every year - and it's EASY. All done over the web.

I feel like I'm living the future of medicine, but that the government doesn't want to hear it.

[OMG]

Same, through my employer, who recently switched over to high deductible HSA supplemented plan. 100X better than prior HMO provided by them. I now get to choose my own doctor and find myself really giving a shit about how much it all costs

[SLUDGE]

My only worry is that, even with the change in the tax treatment and the ability to buy insurance across states, prices will still be obscured. Most people will be able to buy affordable insurance, but how does that force providers to reveal prices (if most people are buying policies that cover everything)?

[mark]

The idea is to take all those people on Medicaid, and give them a debit card with $2500 for health care. They can use it on a high-deductible plan, routine medical expenses, or just roll it over to the next year. Eventually there would be so many price-conscious patients, the market would respond by posting prices.

[JFuller]

It seems odd to use Lasik, a procedure not covered by insurance, to argue for a better insurance system. Wouldn't the conclusion following from the Lasik model be to do away with insurance altogether?

[OMG]

No. The argument is being made that elective, non-emergency procedures should be offered in a way in which the consumer makes the decisions and bears the cost burden. Insurance should be limited to what it is for your car - catastrophic emergencies

[JFuller]

Two questions:
1) Why do opponents of gov't involvement in health care only ever mention two countries, Canada and Britain? You would think the world consists only of three countries (the US, Canada and Britain) to listen to these people. What about other countries such as these?
http://www.csmonitor.com/2009/.....-usgn.html

2) Are there any countries out there that have successful healthcare systems (affordable, high quality care) based only on the free market with no gov't involvement? If so, which countries?

[Fiscal Meth]

1) They mentioned the other one in the video... Massachusetts silly

2) No, because the world is full of JFullers, trying to gain ownership of some people by promising to take care of them using other people's resources while expecting everyone to thank them.

2a)Nor are there any without free markets and with govt. involvement.

[minimalist]

I'm all for free market reforms when it comes to health care. And I'd like to see the monopoly the medical establishment has be dismantled. If I'm perfectly capable of researching what sort of computer I need and making a purchase decision without a government-enforced permission system, why shouldn't I be able to determine I have strep, walk into a pharmacy and buy amoxicillin to self treat without having to first get a permission slip (prescription) from a doctor? For many chronic health afflictions I don't need to see an MD, or any sort of gatekeeper before I make a choice. For some acute illness, like if I break my nose, I'm going to head to a doctor. But that should be my choice. In a free market, I should be able to buy a solution directly from a source without having to go through a government-sanctioned gatekeeper.

[Laura]

I just wanted to add to the discussion and offer up a few links from icyou.com for those interested in learning more generally about Obama's plans, the public's reaction and where the reform initiatives currently stand. Check out these links...

http://www.icyou.com/topics/po.....are-reform

http://www.icyou.com/topics/po.....e-politics

check back because we update daily!

Thanks,
Laura

[Dr. James Brook]

This video is quite correct in its analysis of the causes of our healthcare problems, but it does not bring us to a solution that would truly work. If lasik surgery is a great value because it is not covered by insurance (which is true), then why extend tax incentives toward insurance onto individuals? That would eliminate the tax advantage of emloyer-based insurance over individually purchased insurance, which would do some good, but it would lead to a larger cause of harm. That is, it would extend our problem of over-insurance. More people would be insuring against what could otherwise be low cost procedures. A better solution would be to eliminate the tax preference of all health insurance, whether purchased by an individual or an employer. That way, health insurance would assume its true value relative to other goods. More medical costs would be paid out of pocket, and those costs would decrease as lasik has. People could buy true insurance, that is, they would insure against very expensive medical events, and the premiums would decline dramatically. Routine office visits would be paid out of pocket. I am a family practice physician, and I have turned away from insurance, Medicare, and Medicaid. My average fee in 2008 was $49, including labs, medications supplied, and housecalls. I am able to keep fees low and offer a high level of service because the patient pays me directly and is therefore my customer. In most practices the insurance company is the customer. The video was correct in saying that we should eliminate state regulations on insurance policies, and they should be able to be purchased across state lines.

[Ernie]

YES! The auto insurance analog is right on. Hig deductable INSURANCE and consumers paying for what they use for routine care. That would encourage price shopping and drive down prices for non-emergency care. That kind of coverage, with HSAs is already out there and working well but I don't see anything about it in discussions of ObamaCare. How can all of our our Representatives be so out-of-touch?

[Devin]

How can a site called "Reason" and it's readers (with few exceptions on this forum) fail to see the lack of "Reason" in this LASIK analogy. The assumption that free market principles will benefit primary (necessary) health care is fundamentally flawed. When the price of chemotherapy drops, does anyone buy two doses? When the price goes up, does anyone stop buying? NO! When it comes to staying alive or relieving pain, there is no supply and demand curve, no cost benefit analysis, no balance at all to upward pricing pressure. You pay whatever they charge you to stay alive. Most of us would prefer to be bankrupt than dead, and we do what our doctor tells us is going to solve our problems. It doesn't matter how may private companies are involved in distribution, primary health care cannot be commoditized. Market principles simply do not apply here.

LASIK is an elective, cosmetic procedure, not health care. It benefits from competition because it's a commodity in a way that heart surgery will never be. Get over it. The blind devotion to the free market has become a disease in itself here.

It's somewhat irrelevant whether we have private insurers collecting the premiums and paying the bills, or whether we have the government doing the same. Nothing will change until we recognize that no single entity (not patients, doctors, hospitals, or insurance companies) have true knowledge of the value of any given medical service to any given patient. Assuming this mixture of orthogonal interests will somehow create some pricing equilibrium is absurd. The entire reimbursement process needs to be demolished.

And the insurance companies have utterly failed in their task of distributing risk. They tried to maximize profits, not by enrolling a wider variety of clients to buffer against the costliest ones. Instead they just tried to cherry pick the healthy clients and kick the sick ones to the curb. If this is how free market medicine works, we should all be ashamed to even utter the words. The entire medical insurance industry should likewise be demolished or at least regulated out of existence (or least it's current incarnation).

We, as a society, need some distributed risk and cost framework. We can't, individually, save enough to money to pay for the brain tumor that will hit only a small percentage of us. Insurance is supposed to do this for us. But it cannot be tied to employment. Full-time CEOs are just as vulnerable to that brain tumor as the part-time teacher's aide or the stay-at-home parent.

For my money, reform will be defined on two fronts: the doctor/hospital cabal and its blind reimbursement scheme, and the move to a population-based (rather than employment-based) insurance system (private, public, or both). Let the free market focus on those areas of the economy that it does wonders with.

[Aquagrrl]

The premise of this article is flawed. Lasik cost have gotten slightly more expensive, not less:
http://www.allaboutvision.com/.....y/cost.htm
This is due to improvements of the technology, but the argument could be made that the same thing will happen for all medical procedures.

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[Jason]

To Aquagrrl - You're forgetting about a little thing called inflation. The article you are pointing to reflects costs in today's dollars.

I agree with the principles of the article, but I realize selling the idea would be difficult. As a step forward, what does everybody think about the idea of encouraging "market value" insurance? If the service costs more than the average market value for your area, you owe the difference. If it costs less, the insurance company pays you cash back. The doctor, clinic, etc must inform you if they are charging you above market value.

[Don McMillan]

I am surprised how people make comments about LASIK eye surgery as a cosmetic elective procedure when is not.
I mean is true that is elective but is not a cosmetic procedure. Please check http://lasik-secrets.com/lasik.html

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[Behram]

Cost of LASIK surgery is slightly increased in years, but main reason of that increase is new technologies. In 10 years, LASIK surgery will be a must do, I believe.

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