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Opinions split on healthcare repair

January 09, 2007

Re "Demand reform, governor," Opinion, Jan. 5

This piece did an outstanding job of identifying specific criteria to follow to help remedy the shameful health insurance environment in America. Affordable healthcare for all citizens should be an unambiguous goal of any government that claims to be civilized. Not only should this article be mandatory reading for all California legislators and the governor, but I recommend that copies be sent to President Bush and Congress.


Santa Ana


Jamie Court and Judy Dugan's prescription for curing what ails the state's healthcare system is misguided. They list five conditions that would supposedly lead to healthcare nirvana. The recommendation ignores basic economics.

History has shown repeatedly that state interference in the free market may produce benefits in the short run but leads to shortages and high prices in the long run. This principle is always true, whether the recommendation is rent control, gasoline price caps or health insurance mandates. Legislators cannot repeal the laws of economics.

This recommendation is an example of a common pattern. First, there is a perceived problem of fairness with the free market -- in this case, the lack of universal healthcare coverage. Then, government intervention is called for -- in this case, mandated coverage forced by the state. This "cure" eventually makes the problem worse. Then critics blame the worsened situation on the failure of the free market instead of state interference and call for more state interference. The problem becomes more intractable with every interference by the state.

Healthcare in our state needs less government regulation, not more.




Court and Dugan listed five conditions that must be placed on insurance companies that would go a long way toward making universal coverage possible. I would have gone one step further. Let's get insurance companies out of the healthcare business entirely.

The purpose of insurance is to prevent rare and unforeseeable events from causing catastrophic financial losses. Healthcare doesn't fit the definition -- everyone needs it. Private, for-profit insurance companies function as gatekeepers, authorizing (and sometimes denying) treatment based primarily on the desire to reduce costs, and preventing people who are likely to need substantial care (e.g. people with diabetes) from benefiting from the shared risk pool by shutting them out of the market (unless they are covered by a group plan). Their motive is not healthcare coverage, it's profit.

Let's stop using the terms "healthcare" and "health insurance" synonymously. They are two entirely different propositions. If we don't frame this debate properly, we'll never identify and implement the most effective and efficient method available to achieve the real objective: universal healthcare to meet a universal need.



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