(Judging from my email, the previous article was poorly understood even though I tried to break things down to the most fundamental level possible. I used little, easy-to-read words and I even made mention of dogs biting scrotums for crying out loud. Let me take another crack at it for the sake of those of you who need to have things explained a few times. -PB)
Universal Access, Tatooed Ladies, and the Dreaded “R” Word
Let us consider how the typical uninsured patient accesses health care. Arriving at the Emergency Department after a brief stop at the tatoo parlor for the finishing touches on a modest tiger motif around her left breast, our patient stubs out her cigarette, throws the scanty remains of her super-sized Big Mac meal into a nearby trash can, and with her three disheveled children in tow waddles to the triage desk where she presents for some common complication of her smoking and her non-insulin dependent diabetes. After a brief assessment by the triage nurse, she is directed to a row of grimy plastic chairs where she and her three children, Kristal, Alexa, and Deshawn will spend the next six hours watching The Fresh Prince of Bel Air while eating stale chips from the vending machines.
While there is no shortage of health care in our patient’s city it is still, like every other good or service, scarce meaning that there is not enough of it to completely meet the demand at the price that people are willing to pay. In our patient’s case, she is unwilling (and unable) to pay anything at all for this scarce service. From her perspective, health care is tightly rationed and although she is going to eventually receive top-notch care, she will end up spending eight good hours (at least) of otherwise productive time essentially standing in line for a few minutes of the Emergency Physician’s time. That’s how the poor pay for their rationed health care, with time and inconvenience.
The key concept to keep in the back of your mind (with the scrotum biting dog) is that every good or service is rationed in some way or another. In a free market system, it is the invisible hand of the market, the collective wisdom of millions of buyers and sellers deciding what something is worth, that sets the price and determines access. If you have, for example, the money for insurance and your copay you can generally make an appointment with your doctor and avoid the plastic chairs and stale chips. We also, however, live in a society that provides government funded charity as our finer impulses compel us to provide medical care (along with other goods and services) to the poor. But as this kind of charity work doesn’t pay very well, with the exception of a zealot or two the enthusiasm to provide it is not strong.
Which explains the plastic chairs, the chips, and the wait.
Now imagine our tatooed lady along with every other uninsured person in the United States waking up to find themselves the beneficiaries of a health insurance policy paid for by Uncle “Single Payer” Sam. A year later and they will still be sitting in the same plastic chairs in the Emergency department because the government cannot provide access to additional services that don’t exist. Unfortunately, not only does a single payer system do nothing to increase the supply of the service it purports to provide but the benevolant teeth of the government dog biting the important parts (the money, for those of you not following along) will limit the financial incentive to produce more of the service.
In a rational system, an increase in demand would be met by an increase in production (spurred by an increase in price) to meet the demand. The production of health care, however, is relatively inelastic. Doctors, midlevels, and nurses can only see so many patients. I don’t know too many doctors, for instance, who have a shortage of patients. To the contrary, the number one complaint of most health care providors is the need to run patients in and out like cattle to make a living.
There is a some elasticity in supply but not much. For the right price, most health care providers will see more patients, the key being that the incentive to stay at the clinic another three hours or work on Saturday has to outweigh the desire for leisure. Still, as it takes a minimum of seven years to train a doctor, three to train a Physician Assistant and somewhere in between for a nurse practioner, unless we want to have motivated junior college graduates as primary care providers the ability to increase the production of health care will always be limited.
Unfortunately, when the government controls the price of anything for which it must pay, the overwhelming tendency is to decrease the price even at a time when to meet increased demand the correct play is to increase the price to encourage the producers. Money itself is a scarce resource to a government and must also be rationed, usually in a way that panders to one constituency or another. (Governments cannot create money, although some have tried with disasterous economic consequences.)
In the quasi-single payer system of Medicaid and Medicare we have today, the goverment fixes the price at such a low level that those who decide to let the dog into their practice have to run a high volume business. If the last vestige of restraint was removed from the government to at least pretend to meet a reasonable market price, the bid price for health care would fall so low that any available excess production capacity would be held back from the market in the ancient tradition of all producers in the face of price fixing, to be sold for the real price to those who can afford it. In this case this would be the same people who have health insurance now, except in a Single Payer world this would be through supplemental insurance or its functional equivalent. That is until the government that promised not to get involved in any other way but providing insurance outlaws this practice.
Does our tatooed patient care about any of this? Probably not. She doesn’t pay a dime now. She won’t pay a dime in the future. The care will still be rationed and she will still sit on plastic chairs waiting…except now she’ll have a lot more company.