Health Care: Markets Are Working Again
Whoa! Wait a minute. Can this be true? Health-care costs rose at a 3.3% annual rate in the first quarter, the lowest rate of increase since 1973. Even better, in March they were up a measly 0.2%, actually below the overall consumer price index. What's going on? Has half the health-care crisis--the cost part--already been solved?
Sorry, Beltway bureaucrats, but the markets appear to be working once again. Sure, the Hillary factor has helped. Fear of heavy government control is tempering price hikes. But the real agent of change is Corporate America. Determined to lower its health costs, business ignited a fire of competition among health-care suppliers. Just two years ago, medical costs were rising at double-digit rates. All gone now.
Strange how Washington advocates of price controls were just the other day arguing that competition alone could never corral rising costs. Why? Hospitals would simply "cost-shift" expenses incurred on patients not covered by insurance over to the corporate health bill. Suddenly, it's not happening.
So maybe the country doesn't really need a new, omnipotent government-run bureaucracy controlling its health care. Sure, dealing with insurance bureaucrats can be frustrating, but imagine dealing with the folks from the motor vehicle bureau? And price controls don't seem to be essential either.
This sharp slowdown in runaway health care inflation buys America time. The country doesn't have to rush into a convoluted, who-can-understand-it medical system if it is not about to bankrupt itself on sky-high health-care costs.
What remains is mostly an insurance problem. With all due dispatch, Congress should outlaw insurance exclusions for pre-existing conditions, make insurance portable, and encourage small businesses to pool their purchases of insurance so they can offer low-cost coverage to their employees. Malpractice reform is in order as well. These steps would go a long way toward increasing access to health care for those not covered. If they don't, we can revisit the problem in a few years.
One more thing. If health-care inflation is the lowest in 20 years, maybe it's time for health maintenance organizations and preferred-provider organizations to start cutting their bills to Corporate America. Companies could pass the savings along to their employees--who haven't had a decent pay hike in years--owing, in part, to rising medical costs paid by their employers. Not only would this be an added fillip to the economy, but it would make a lot of folks happier.