Saturday, February 11, 2012

Fee for Service versus Managed Care.


You have kept me busy recently, and I haven't adequately responded to your "Ain't Nothin' In Life Free," from a few days ago.

According to you the worst part of the healthcare market is you "get paid for doing stuff," but even worse is "getting paid for what you don't do." That is fee for service is bad, but managed care is worse.

I have no opinion on either system. Why should I? Some people lease their car, some take out a loan, some pay cash, some buy used, some choose to not buy a car at all. What do I care? All I care about is there is little interference between the consumer and the producer. If some would like managed care, God speed. If some would prefer fee for service, fine with me. If someone want to come up with a hybrid, or a completely new way, that should be encouraged.

Why do we think there is ONE way to organize the health care and health insurance markets. What other market can you point to that benefits from this approach. Plus, when we allow the state to be the arbiter of how something can be organized it is very difficult to change because of the entrenched interests. For example, food price supports that outlived their usefulness decades ago, if they were ever useful. We still pay billions for ethanol despite near unanimity they are bad for food prices, bad for the environment and bad for consumers. But its good for Ames, Iowa. And we still can't kill ethanol. We are still paying for a WWII policy, that is a 70-year old temporary decision to allow deductibility of health care premiums to avoid wage and price controls.

The rigidity that will be introduced into the health care/insurance market by ObamaCare is one its worst features.


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