Making health care less affordable won’t make people – or the state budget – any healthier

February 7, 2011 | Aaron Keating

If you went to the grocery store and noticed that the cost of apples or milk had gone up, would you blame other shoppers? How about the people working in the store? Me neither. But based on what I’m reading in Richard Davis’ latest column in the Seattle Times, he would.

Davis rightly notes that spending on health care is a major driver in Washington’s budget. But he overlooks the simple fact that the state doesn’t set the price for health care any more than you or I set the price for fruit. The state can set reimbursement rates for different services, or negotiate to some extent with private insurance providers on the costs of employee health coverage.

But at the end of the day, Washington isn’t really providing health care – it is paying for it. That means if that reimbursement rate isn’t high enough, doctors won’t provide that particular service. (Or the insurance company won’t pay the doctor enough to provide it.) Similarly, if the state isn’t willing to pay a certain premium for employee health insurance, then employees don’t get health insurance.

Davis seems to think that if states just budget less for health care, that will somehow drive down overall health care costs. His proposals? Push more people into the private health insurance market, make more government payments to private insurers, and have more people paying more money for their health insurance. In other words, the same failed ideas that got us into our current health care mess.

If he really wanted to lay out why the U.S. health care system has higher costs and lower performance than other industrialized countries, Davis would write about the well-documented inefficiencies of the private health insurance market, including high paper shuffling costs and big executive compensation packages, among many other cost drivers.

Rather than addressing those underlying problems, Davis just argues that since private sector workers are paying a lot more of their salary toward health care, public sector workers ought to do the same. The truth is, with people losing their health insurance right and left, making health care less affordable for thousands of Washingtonians isn’t going to make people – or the state budget – any healthier.

You can choose not to buy apples and get (cheaper) bananas instead. But what do you substitute for health care?

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Posted in Health Care, Tax and Budget

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