The war against cross-subsidization

Using the time provided by a trans-Atlantic flight (and the spring break from normal studies), I’m finishing “The Innovator’s Prescription.”  Another great excerpt:

Not surprisingly, we reap the same inefficient results that characterized Communism.  Hospitals aggresively pursue some types of procedures—like coronary bypass surgery, for example—that are highly profitable.  And they often shun money-losing services such as psychiatric and trauma care, as well as services like preventative and primary care, which could save costs in the long run.  Eventually, more and more people lose “access,” as the services that aren’t paid well or must be provided at a loss become harder to find.  But the profits and losses aren’t a reflection of value to their customers, prices, society, or the forces of supply, demand, and competition: they are the phantom result of inaccurately set prices that are grossly ot of line with costs.  Yet as in the communist system, we muddle along because the prices that are set mistakenly high roughly offset those set mistakenly low, allowing most hospitals and physicians’ practices to eke out a modest profit after all cross-subsidization is complete. 

Can anyone provide a logical, believable, and defendable reason for why heart treatment is of more value (based upon treatment cost) than depression?

The free marketeers would claim that an absolutely free market would best distribute health care resources; the single-payer contingent is not comfortable with the fairness of that thought.  Opposite, a completely controlled government system would provide equal care for all; yet the free marketeers are uncomfortable with subjective pricing.

As we continue to debate our next health care reform effort; is an efficient system with limited government intervention fathomable?  The point is moot, regardless.  We’ve got some time yet in the system currently in operation.

As an extra thought, however, why not explore what has worked in Germany.  No, not the health care system; but the country itself and the path it has followed since recovering from Communist rule following World War II.  There are still socialist policies in place; however the country has grown into the world’s third-largest (Europe’s largest) economy and the largest exporter.

The thing to remember is that it’s possible for the free market and goverment intervention to co-exist.  Although far from ideal, it’s the American health system in its current form.   The system is in need of change to asure coexistance is mutually beneficial to all involved.  Easier. Written. Than. Done.