Tuesday, January 29, 2008

Competiton in healthcare? Now that's an oxymoron.

A most interesting column appeared in the Tuesday, January 29, 2008 Wall Street Journal "The GOPs Prescription for Health Care", by Grace-Marie Turner. A good read and provides valuable information. Ms. Turner is the president of the Galen Institute and editor of "Empowering Health Care Consumers through Tax Reform", University of Michigan Press, 1999.

But and this is a big but, the premise of empowering consumers is that competition in the marketplace will fix the healthcare ills of the US faces some serious questions. On the face of it potentially true. In most markets competition drives down cost, improves quality and diversity of choice.

Healthcare does not operate as a true free-market competitive environment. It is more complex than the private health insurance, workplace, choice debate. The fundamental problem with the healthcare landscape is that until the very basics of regulatory reform are made to impact and make it a true competitive environment, all the tax reforms, HSAs, etc., will not alter the current crisis.

Right now, tax exempt healthcare organizations through Federal and State regulation and Certificate of Need laws, are able to charge higher prices, form cartels to legally block competitors from expanding services or even entering the marketplace and collude. That does not describe a competitive environment. That sounds like a Justice Department probe for anti-competitive behavior, collusion in the marketplace to fix prices etc. We don't accept that behavior in other industries why do we accept that in healthcare?

I am sure that when the explosive growth of healthcare started motives where high, community good meant something and community leaders were trying to do the right thing at the right time. Today's world is fundamentally different that the 60s, 70s, 80s, or even the 90s. Strong bold regulatory action is needed first.

Unless fundamental restructuring of the tenets of the competitive healthcare market takes place, reform under the various proposals are not possible, unless it is universal and single payer. And heaven help us if we go there.

Healthcare market regulatory reform is something that neither party nor the candidates are addressing, except in some of the best political speak that I have seen in years.

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