Monday, September 21, 2009

Thoughts from Dr. Harry Bailey

Blogger Jonathan Bailey e-mailed me to let me know about the following quote from his late father, Dr. Harry Bailey:
In a private fee-for-service medical system, a dead patient is a revenue loss. In the National Health Service (UK), a dead patient was a cost savings.
Dr. Bailey practiced in England (under the NHS) as well as in the US in the pre- and post-Medicare eras.

His son Jonathan relates the following thoughts:
...The fundamental distinction Dad was making is how differently the two systems view the patient and the incentives that view creates in each. The private fee for service system has more incentives to keep its patient alive and help them get better. Under socialized systems, and Medicare/Medicaid is a socialized-lite system, the overriding incentive is to control costs because the funds are finite and the needs are not.

I don't think I need to tell you which system Dad thought was better.

Of course he thought the private system vastly superior, even though he had his issues with that too. However, most of the issues he did have with it were created by government interference in the period after Medicare was enacted. Medicare doesn’t control costs, it controls prices. The costs just get shifted to someone else. The decisions on what to pay for exams were more or less completely arbitrary. Any time Medicare was looking for "cost" savings it simply dictated them by reducing reimbursement rates or, in other words, price fixing. The costs didn't actually disappear though. They just had to be shifted to the private patients who ended up subsidizing the Medicare patients. It is in this way that healthcare has become so expensive in the private sector. We pay for our own healthcare, subsidize the Medicare/Medicaid patients and carry the full freight on the people with no insurance who show up in the ER and must, by law, be treated.

Rationing is what we will get if we go down the socialized healthcare delivery path, the dead patient as cost savings view is likely to become dominant because the government, as single payer, is going to be forced to ration. The funding available to pay for medical care will be finite yet demand for "free" services will be infinite. The government will tell us if and when we may see a doctor. It will tell us what care and what procedures we will receive. That is the only possible outcome of a complete nationalization of our medical care delivery system. True healthcare reform will only come about by reducing government involvement in delivery, not further encroachment or a complete takeover.
(Read the full post.)

We need more doctors like Harry Bailey.