PUBLIC HEALTHCARE

Posted by Eric Solis on August 24, 2009 under Healthcare |

PUBLIC HEALTHCARE

I am compelled to write this with regard to the healthcare debate that our country is in.  First, let me be clear that I am a fiscal, monetary and social conservative with moderate economic views.  I consider myself an independent and am registered accordingly.  I do not agree with Obama on 99% of the issues and like many am skeptical of his capacity, intentions and even his right to serve as President of our nation. With that said, I am just as skeptical of the insurance and pharmaceutical companies that control the choking points of the health care industry.  Consider the following:

• What would it cost to get a piece of mail from LA to NY if it were left up to Federal Express?
• What would it cost to air condition your home if the Public Utilities Commission did not exist?
• What would private industry charge you to pump water into your home if not for the PUC?
• What would Elementary school cost if it were priced like private Universities? 
• What would law enforcement cost if a public option did not exist?
• What would fire services cost if a public option did not exist?

I am a strong advocate of capitalism, but when it comes to “utility” type needs of society; it is not uncommon and indeed makes sense to have the “government” provide a foundational service to support availability and fair pricing.  Remember government is supposed to be “we the people”.  And while I get the mistrust of our government, at the core, the idea of eliminating the profit motive from healthcare makes sense and this point I would assert is long over due.

The healthcare industry is a monopoly.  For example you do not have to have a computer, or Microsoft windows or the internet or a car.  But we all have to have healthcare.  We do not have to have coverage, but to live we have to have healthcare.  So price fixing and corruption are part and parcel with this monopolistic industry.  It is analogous to giving a group of for profit companies the right to price and sell us the oxygen we breathe.  How many of us would want that?  How many of us believe that business today would sell us oxygen at a fair price?  Just look at the cell phone industry as an example; what they sell us the right to use the air waves and we all know they are gouging consumers.  Remember that corporate America is every bit as corrupt as the Government.

Have you ever wondered why we get water so cheap?  It is life sustaining and we can’t live without it.  In my view healthcare falls in the same camp.  To have only companies that want to profit off delivering healthcare is a PROBLEM and a BIG one at that.  I am of the belief that the insurance industry is causing fear and confusion with regard to what a public option would look like.  Think about this for a minute. The insurance industry earns upwards of 50 billion in net profits year in and year out.  If you were to add back all of the executive pay, marketing, commissions and fees adding up to hundreds of billions of dollars that is paid out year after year, you would discover enough money to insure millions of people.  Double goes for the Pharmaceutical industry (have you asked yourself why there is a drug store on every corner these days even out in the middle of nowhere?  BIG MONEY!).  The fact is that the number is as large as the stimulus package that was paid out in 2008, but in this case it would be every year and it would go directly towards creating a solution for our nation’s dire healthcare problem.  Put another way, if this money were absorbed for the benefit of society as a dividend to keep healthcare costs down, it would equate to a huge savings for society over time and each American would be a benefactor of this freed up capital that is currently going into the coffers of the healthcare monopoly, year after year after year, equating to trillions of dollars over time.

Personally I think a public utilities sort of arrangement makes the most sense.  Pharmaceutical and health insurance companies should be treated like utility companies whereby they are give rate increase approval to reach statutory ROI.  This would create private industry solution to a public “utility” need (i.e. healthcare) with a rate of return that mirrors that of a public utility company (i.e. 10%) that is given an implied guarantee and could even be subsidized by the government.  This is a model that Americans are familiar with and use every day when we flip the light switch on in their homes or when we run the bath.