Understanding Health Care – Part I


Do you understand health care? Most Americans list health care as one of their leading concerns but many do not really understand the issue, including many physicians and nurses.

Most Americans would agree that providing good healthcare for everyone should be a priority. That’s why most support the idea of universal healthcare coverage. But the issue is far more complex than simply giving everyone a health insurance card to put in their wallet. After all, what good is that card if you can’t get the healthcare that you need?

A recent article written by healthcare economist, John C. Goodman, illustrates the point. Goodman is a well-known and highly respected expert who freely criticizes both Republicans and Democrats when their rhetoric doesn’t make sense. Goodman cites anecdotal evidence of failures in providing good healthcare from National Nurses United, the country’s largest nurses’ union. To prevent such failures in the future, the union favors a universal, government-run health care system. A leading editorial in the New York Times endorsed their way of thinking.

Goodman correctly points out that such failures occur every day – in every country in the world. And more than 90 percent of the time, the insurer is the government. He reports that one out of every six British cancer patients is denied access to the latest cancer drugs because the British National Health Service has decided that the drugs are too costly relative to the gain. In other words, believing that eliminating private health insurance will solve these problems is naive in the extreme!

Medicare for All, single-payer healthcare, and socialized medicine are just euphemisms for government control of all healthcare. It means the elimination of private health insurance – which means the elimination of all competition in healthcare. If you believe the current system fails to deliver the quality of care you deserve, just imagine what it will be like when there is no alternative. This is the situation now in the Veteran’s Administration and we all know the scandal just a few years ago when veterans were dying while waiting to see a doctor. That’s what you can expect from government-controlled healthcare.

Goodman lists five fundamental truths we need to understand about healthcare:

  • In a Public System, Patient Needs Compete Against Taxpayer Needs
  • Personal is Better than Bureaucratic
  • Competition is Better Than Monopoly
  • Profit is Just Another Cost
  • Markets Work


In a Public System, Patient Needs Compete Against Taxpayer Needs

Goodman tries to help us understand healthcare economics. A dollar is a dollar. It doesn’t matter whether it is spent on healthcare or something else. When it is spent for one thing, it isn’t available to spend on something else. That means healthcare spending is a matter of priorities. Just as a family must prioritize spending within a budget, government must do the same. The real issue is how should decisions on health care spending be made?

In a government-controlled healthcare system, spending on healthcare must compete with spending on other taxpayer needs, like defense, education, and welfare. Goodman says on the same day as the Timeseditorial about private healthcare failures, the Dallas Morning News reported a horrible incident in the Texas Medicaid program. A severely disabled child who was not given proper care is now in a “vegetated state.” This is only one of hundreds of examples of patient abuse the newspaper discovered in a year-long investigation of the state’s Medicaid program. In other words, government-run programs can have disastrous outcomes at least as bad or worse than private healthcare.

Personal Is Better than Bureaucratic

Every time we go to the drug store and purchase over-the-counter drugs we are making a choice. We are choosing lower prices and convenience over going to see the doctor where we pay higher prices and suffer inconvenience. We are opting for self-medication over seeking professional advice. Most of the time this works well for us but sometimes it does not. Sometimes that cough that won’t go away is pneumonia instead of the common cold.

Goodman is the “father of Health Savings Accounts”, an idea he pioneered in 2003 to give consumers a larger role in making their own healthcare decisions. By empowering consumers with HSAs, he gave patients more control over their healthcare spending. This is good for controlling the rising costs of healthcare and for making the system more efficient. But this kind of empowerment would be eliminated by a government-run system. When bureaucrats are in charge, there is only one way to do everything.


(For more on Understanding Health Care, see Part II next week.)


One comment

  1. Another great article that stimulates our interest in topics of vital importance to all, especially Senior Adults.

    Comment by David Godfrey on December 23, 2019 at 8:44 am