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Save healthcare with big dose of free enterprise

What can buying Christmas gifts and hog hunting possibly have in common? If you’ll labor through this treatise on the state of healthcare in the U.S. I’ll solve the riddle for you.

Most Americans believe that we have the best healthcare delivery system in the world. Our state-of-the-art technology and the compassionate care rendered by healthcare professionals are comforting in time of illness or injury. Though I am blessed with excellent health and haven’t had occasion to sample the delivery of healthcare first hand very often, my limited experience has been very positive. I like my doctor and my hospital. If, and when, I need them I know they are going to take good care of me.

The only shortcoming with the American healthcare system is that we can’t pay for it. It’s almost a cliché, but, for decades now, the costs of healthcare and higher education have both risen much faster than overall prices. With wages having pretty much stagnated during that period, the rising cost of healthcare means that more and more of the family budget goes to pay for it. Not a pretty sight.

Avoiding the boondoggle

What can be done? The classic knee-jerk response is to turn it over to the government and socialize medicine. An awful idea if I ever heard one. When anything is turned over to any government a bureaucracy is born, which must be fed constantly and is never satisfied. I can foresee the U.S. Department of Socialized Medicine with a budget larger than the economies of Japan and Germany combined. If we can’t afford private healthcare, we certainly can’t afford to fund another government boondoggle.

Well, if we can’t pay for it and we can’t socialize it, what can we do? When the Puritans first landed at Plymouth in 1620, they decided to raise their food crops communally and nearly starved to death. After a year or two of that nonsense, they assigned each family a small personal garden plot where the family kept everything raised on that plot, and immediately surplus food appeared. The magic of free enterprise had arrived in America.

Taking our lead from the Puritans we have got to inject healthcare with a large dose of free enterprise economics. Let’s dispel one rumor at the outset. In the world of business there is no such thing as “non-profit” as we think of the term. Don’t be fooled by hospitals and insurance companies waving their non-profit flags to entice you into thinking they’re operating on the cheap. Every organization is striving to get and retain as many dollars as they possibly can. The only difference is that some pay taxes on their “profits” and some don’t. Whether that is good or bad is beyond the scope of this column. It’s just a fact of life.
Our government, which is the best government ever conceived by mortal man, is not without guilt in this healthcare debacle. They have flipped and flopped all over the landscape from reimbursing costs, which encouraged healthcare facilities to spend as much as possible, to reimbursements based on diagnosis statistics, which is equally inefficient. And, since the government pays well over 60% of our national healthcare costs, their policies have a dramatic impact on what the rest of us pay.

Interjection of government into private enterprise is always a mistake and healthcare is no exception.

What’s in it for you?

How can we get the miracle of free enterprise working in the healthcare industry? Like the Puritan farmers there’s got to be something in it for me or I just don’t care. As long as employers and employees pay fixed health insurance premiums with no opportunity to impact their cost through their own actions, the attitude of “since I’m paying for it I might as well use it” will continue. This scenario promotes unnecessary medical procedures and drug prescriptions and drives up the overall cost of healthcare. There must be another way.

Sadly, there is probably no solution to fix government health programs other than to starve the beast as President Reagan suggested. Here in Mississippi, approximately 25% of the population qualifies for Medicaid and that’s absurd. Our state Medicaid beast definitely needs a little starving.

I’m impressed by the push toward wellness programs and the potential for cost savings for those who commit to a healthy lifestyle. Now we’re getting some skin in the game.

Likewise, health savings accounts reward those who use health services sparingly by letting the surplus funds build up in the employee’s account, which is then available to pay future health costs or additional retirement funds. Hey, those Puritan farmers are grinning from ear to ear over health savings accounts.

Oh, about the Christmas shopping and hog hunting, here’s the scoop. While you’re reading this, wife Debra and I are vacationing in the Texas Hill Country. We’re staying in the lovely and quaint little town of Fredricksburg where she’s Christmas shopping while I’m bow hunting for deer and hogs at our Texas hunting camp near Sisterdale. Who ever said guys couldn’t enjoy going on a shopping spree?

Thought for the Moment

Do what you can, with what you have, where you are.
— President Theodore Roosevelt (1858-1919)

Joe D. Jones, CPA (retired), is publisher of the Mississippi Business Journal. Contact him at cpajones@msbusiness.com.

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