Monday, February 01, 2010

The Health of a Nation

I want people to have quality care, but I dislike the goal of "comprehensive health care."

The goal of having one system that covers all people is too absolutist for my tastes. The obsession with having one political structure that covers the health care of all is the very heart of totalitarianism.

I believe that Adam Smith was on a better track. Smith made the observation that a free people, acting on their own accord, tend to maximize the Wealth of the Nation.

I contend that a free people with more direct control of their Health Care resources would improve the Health of the Nation.

Our system of big insurance and big HMOs has created a paradigm where a ruling elite define our care and effectively control access to care. We have reached the point where not paying onerous premiums into the system means a person effectively has no access to care.

If we had a system where people owned their own health care resources, we would see each individual working to maximize the impact of their health care dollars.

Doctors, seeking to attract these customers, would invest their resources in ways that maximized the impact of their care.

The Medical Savings and Loan is like insurance in that it assures people have health care resources in times of emergency. Instead of doing the accounting at a group level. It does the accounting at an individual level. Each person owns a savings account. They have access to interest free loans in cases where savings fall short. With the MS&L most people will be able to self-finance their care and will go about the business of optimizing their resources.

Not everyone can self finance care. The MS&L creates a structure that identifies those people needing assistance. Charitable assistance can use this information to maximize the impact of their giving.

This process of maximizing each element of the health care system ends up better quality of care for more people than the totalitarian vision of "comprehensive care" which injects inefficiencies as the ruling elite try to meter care based on their notion of social justice.

Smith's observations about the Wealth of the Nation are relevant to the Health of the Nation.


Frank Staheli said...

I agree that the MS & L is a great idea. I'm assuming that it's the same or similar to an HSA(?).

I've had co-workers act like crabs in the pot trying to pull me back into the pot though--when I suggest that I'd like to have an HSA, they say something like "But I have more health care needs, so your premium is helping to pay for me."

y-intercept said...

Somehow I missed this comment.

The Medical Savings and Loan is a fusion of insurance and a straight HSA. People would have a savings account and access to no interest guaranteed loans.

This system allows people to comfortably self-finance their care.

The money for the loans comes from a loan reserve drawn from the savings accounts. There is some redistribution of wealth from healthy to sick with this structure. A person who suffers a catastrophic injury is likely to default on the loans.

For people who cannot fund their care, there will be a system of grants.

There is still some redistribution of wealth in the form of loan defaults.

The MS&L helps those people who can self-fund their care. There is still a great deal of wealth transfer to those who are unable to fund their care. The real difference between this scheme and insurance is that people would know how much wealth was transferred to and from their accounts.

Essentially, the MS&L breaks out an insurance policy into individual accounts so that people can see how much money was transferred to or away from them.