I put Middle Earth Journal in hiatus in May of 2008 and moved to Newshoggers.
I temporarily reopened Middle Earth Journal when Newshoggers shut it's doors but I was invited to Participate at The Moderate Voice so Middle Earth Journal is once again in hiatus.

Thursday, July 13, 2006

Health Care Revisited - Again

Almost a year and a half ago I had a post on an article in the New Republic, MEDICINE AND THE FREE MARKET (free registration required). In that article Arnold S. Relman says that the US's free market model for health care has been a dismal failure and it is only a matter of time before we figure it out.
During the past four decades our health policies have failed to meet national needs because they have been heavily influenced by the delusion that medical care is essentially a business. This delusion stubbornly persists, and current proposals for a more "consumer-driven" health system are likely to make our predicament even worse. I wish to examine these proposals and to explain why I think they are fundamentally flawed. A different kind of approach could solve our problems, but it would mean a major reform of the entire system, not only the way it is financed and insured, but also how physicians are organized in practice and how they are paid. Since such a reform would threaten the financial interests of investors, insurers, and many vendors and providers of health services, the short-term political prospects for such reform are not very good. But I am convinced that a complete overhaul is inevitable, because in the long run nothing else is likely to work.
While reading Bilmon last night I realized we may be closer to that "complete overhaul" than we might have thought.
Unhealthy Returns
The lesson I learned this quarter is that the health care crisis is now hitting the health care industry where it hurts most -- straight in the wallet. Whether that will will be enough to prod our GOP-run Chamber of People's Deputies into actually doing something about the problem isn't clear, but I think it at least raises the odds. After all, we're not just talking about the sickness and suffering of ordinary human beings. There are large corporations out there in real pain. Something has to be done.


The tip off was when I looked at the performance of the different S&P 500 sectors. I noticed that health care -- i.e. the 56 medical-related stocks in the index -- had the second-worst return of all, posting a 5% loss in the quarter just ended. Only technology (which investors these days are treating as just another big cyclical capital goods industry) did worse, with a 9.6% loss.
In other words the Republican friendly health care industry is losing money. One of the main reasons for this is the increasing numbers of people who do not have health insurance. These people usually don't go to the doctor until they are in need of major and expensive care which they are unable to pay for. A second reason is that with co-pays and deductibles getting higher those who have health insurance are less likely to have "voluntary" procedures.

Combine this with US multinational corporations more favorable attitudes toward a new health care model it is time for the Democrats to get in the front of the line and begin a push for single payer (national) health care.

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