Healthcare: The Annual Physical

As I start writing this post I am sitting at the doctor’s office for my annual physical. we always try to bring the family in every year for the physicals. It is a good annual tradition, and since the insurance — which we are paying for (well, we and the company I work for) — covers it, we might as well get our money’s-worth.

The physical is actually a money-saver to the insurance company. By detecting things early, and treating things before they become expensive, it actually saves them costs they would otherwise incur.

Healthcare itself is taken for granted by many today, seen as a right by others, as an unfulfilled social obligation by still others. No one really makes a case that we should put a price on health, that we should put a price on healthcare.

And yet we do everyday. every supplement purchase, every gym membership purchase (whether used or not), all such purchases, says we rate and put a price on health.

Prices allocate resources, which at any moment are finite. That is different from saying the resources are static. The finite resources do have an organic nature about them — they can grow or diminish. But saying that everyone needs or deserves a particular level of healthcare doesn’t change the finite nature of the resources. Requiring that everyone be furnished a certain level leads to resources being used for healthcare that would otherwise be used elsewhere — finite resources can be reallocated — but it is the proverbial rob Peter to pay Paul scenario.

Which leads me to the role of government in healthcare. When people have a sense of entitlement to something, they tend to waste it — either through use or the lack thereof. In the healthcare field the government is legislating entitlements for people (entitlements or “positive rights” seem to be a favorite government pasttime), which leads to a certain carelessness by the populace. Which leads to growth in expenses, which ultimately leads to cuts and delays for services — which is seen in all national health service countries.

If we go back to it, government is what created our current health bubble, going all the way back to World War II. Wage caps from the war gave employers no way to reward employees through salary or recruit new employees the same way. So they fell back on benefits, which weren’t capped. Thus corporate healthcare was promoted and spawned.

Before employer healthcare, the average person watched their medical spending closely, since it came directly out of their pocket. Corporate healthcare enabled more people access to better care, but it also made people more careless with the expense, since they weren’t seeing the direct impact on their pockets. Wage caps skewed the allocation of resources.

Today, with government pushing toward what becomes a one-size-fits-all health program, in the name of fairness for all, instead of getting better healthcare we are getting a system that skews resources without giving anyone the healthcare that is best for them, with an ultimate conclusion of healthcare rationing.

The current best step I see is the large deductible type policy that I have. It is linked to an HSA account that I fund each year, and that the funds can roll over from year to year. I budget ot be able to cover the deductible, so I feel comfortable that I have enough money to spend on necessary healthcare. But since it is my money, and I can see my account, I don’t like to spend unless I need to. It also has the advantage of the group bargaining power with providers for the price I pay for services. It combines individual accountability with collective bargaining.

Government programs divorce individual accountability and eliminate collective bargaining. In collective bargaining both sides have a say, and can choose to say no. With the government there is no chance to say no — which is coercion on a grand scale. Which doesn’t mean people won’t choose to resist, to follow their own self interest. Government can dam the river, but the water has to go somewhere, and will eventually find its way to the sea. The Dutch spend a lot of effort keeping the tide from coming in.

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