Posts Tagged ‘American Medical Association’

Analyzing the effects of a single-payer system

September 20, 2009

A single payer healthcare system is one in which all of the healthcare payments in an area come through a single entity. Many supporters of the single-payer option take for granted that a single-payer plan will cut healthcare costs more than any alternative. Especially ignorant writers claim that the single-payer system is the “only way to control healthcare costs”.  Some more intelligent ones have actually laid out why such a system would be effective.

First, some terminology. A monopsony is a market situation in which one buyer purchases something from multiple sellers. A monopoly is a market situation in which one seller sells something to multiple buyers. In both situations, the market advantage usually lies with the united, single entity. In an ordinary market situation, creating a monopsony would benefit those united under it, the consumers, at the expense of those running the hospital. Most inquiry usually stops here.  However, the situation is more complicated than that. Due to strict occupational licensure, the American Medical Association has obtained a monopoly in the healthcare labor industry.  This monopoly benefits the doctors at the cost of those running the hospital . The hospital has been passing this cost onto the consumer through high medical costs. A single-payer system, therefore, would not be able to truly negotiate costs lower because it isn’t getting at the problem.

The Physicians for a National Health Program claim further benefits of a single-payer plan. They claim that the government would decide a sum to pay the hospital for its entire funding. This would lead to rationing and inflexibility in the hospital.  The individual would have to pay out of pocket for preventive care.  People would be required to pay out of pocket for treatment and medication under any unexpected overload of the budget, such as an epidemic.

Even further, because the source of the problem is not being treated, healthcare costs will not decrease, but increase. The budget given to these hospitals will become less and less relative to the costs of healthcare without cutting the budget periodically; however, the budget will be further cut. The “rationing” will be dealt by the hospitals to a higher degree every year.

This bill is a wreck, and the more we look at it, the worse it appears.

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Why are medical costs in America so high?

July 30, 2009

There are several reasons for the high medical costs in our country. First and most important, physicians are joined in one of the most powerful trade unions, the American Medical Association. This union campaigns for quality healthcare and regulations in the health industry. Why is this bad? Of course, because of the nature of big, powerful, and influential unions, labour costs increase. This effect is magnified when one’s ability to practice medicine is strongly limited by a lengthy educational requirement. So, in America, medical labor costs are especially costly. These costs are passed onto the consumer. Hence, we have high medical costs. There is also a lengthy argument about the AMA’s power in Capitalism and Freedom, Chapter 9, if one has the interest in further exploring this topic.

Second, the insurance system encourages irresponsibility. The collective nature of insurance is comparable to Hawaii’s old Universal Healthcare system, in which people bought all they want medically because it was “free”. Of course, the result is an increase in insurance costs and a faction within the insurance company that rations medical expenditures. So, the collective insurance system is responsible for some of the aggregate healthcare costs in America.

Finally, America is one of the few remaining developed countries with no public healthcare system. The result is that almost all healthcare innovation must come through American companies. This investment in new cures, vaccines, and medicines comes out of the pocket of the consumer indirectly, and the result is more expensive medicine.

There are plenty of other reasons that don’t need explanation. Americans pay for top notch healthcare treatment not available in other countries. More people are vaccinated in America than anywhere else. Regulations exist that limit medical competition. All of these are also reasons why our costs are so high.

How can we battle this? What is the true answer to limiting healthcare costs? Disappointingly, conservative talk show hosts don’t even have real answers. Most propose subsidies. However, here is how we can cut these costs:

  • Cut regulations that strengthen the American Medical Association
  • End government mandates requiring the purchase of insurance
  • Encourage other countries to privatize their healthcare systems
  • End regulations that limit interstate competition between insurance companies
  • Cut licensing requirements for doctors and nurses

Yes, we can cut healthcare costs without creating an oppressive universal healthcare system. All we have to do is get our voices heard.