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So how high of a price will you pay?

One of the hallmarks of any liberal running for office is their stance on government-subsided health care insurance. Recently, President Obama has tried to push his universal health care plan as one that will create jobs, stimulate the economy but most importantly, give every eligible American government-provided healthcare. This is a touchy issue; not one Democrat, Republican or otherwise truly want to see a single person have medical conditions untreated. Clearly, it’s a tough problem to solve, but I don’t think the answer involves the government.

First, in the interest of full disclosure, I’ve been very blessed in that throughout my life, I’ve had health care insurance through my parents or through my full-time employer. I’ve also been blessed in that I haven’t been sick or needed a doctor all that much, but when I did, I know I felt worried enough without worrying about how me or my parents were going to pay for it. In essence, I’ve never had to worry about when it was worth going to a doctor – when I felt like I need to, I could go. I’ll concede that while I do my best to understand both parts of this issue, I may never truly understand.

President Obama’s plan, which recently stalled in the House, is a lot like most of his other plans because it involves taxing the well-off to help out the not well-off. It calls for a 5% tax on all private health care insurance and an additional trillion dollars over the next ten years. This doesn’t sound terrible, but again, like most of Obama’s plans, this plan hits the hardest at corporate America: regulations on insurance providers against pre-existing condition exclusion and mandating more health care coverage.

Before talking about this, I think it’s important to touch on the debate that has come up in the last few days regarding doctors and how much they’re worth. Let’s get one thing straight: doctors have every right to earn as much money as they want. Mike Huckabee puts it best in his recent blog, and they’re probably not even paid enough. No one (in Cleveland) cares that LeBron James makes as much money as he does; no one (in New York) cares that Derek Jeter makes as much as he does. And why is that? LeBron and Jeter are both products to sell: they’re world-class athletes who are entertaining to watch. LeBron has probably never thought this, but at some point he made a decision to say, “you know what, I can make a lot of money playing basketball because people will want to see me play.” It worked. Doctors do the same thing: at some point, they say, “you know what, I can provide for my family comfortably being a doctor because people want to be healthy.”

"The product that you’re selling is good health, it shouldn’t be a tough sell." -- Edward Vogler

"The product that you’re selling is good health, it shouldn’t be a tough sell." -- Edward Vogler

"The product that you’re selling is good health, it shouldn’t be a tough sell." -- Edward Vogler

"The product that you’re selling is good health, it shouldn’t be a tough sell." -- Edward Vogler

In essence, all you an accuse doctors of are being good businessmen. You might think this is a little bit like oil companies, who are the most hated corporations in the world because of how much they control our life. However, unlike doctors, there are no good oil companies vs. bad oil companies; when it boils down to it, gas is gas. Good doctors, though, are hard to come by. Doctors are more analogous to the computer industry: sure, that $300 computer from Wal-Mart will probably do the trick, but can’t you accomplish more with a $2300 MacBook Pro (this is not the place for a platform war, but I think we can all agree Apple makes excellent laptops, even if their software isn’t everyone’s…preference)?

So the good doctors have us right where they want us. The best thing to do is to regulate salaries that the hospitals corporations can pay them, so that lesser doctors make more and better doctors make less, right? Would you work hard and go the extra mile in a system that doesn’t recognize it? I think a lot of people would be inclined to selflessly say “of course,” but most doctors have families to provide for, houses to pay for, and student loans (a lot of them) to pay for.

Sure, some of them might take the cut in pay, but perhaps they’d be more on edge at work and miss something important. You see this in Silicon Valley from companies like Google and Facebook: comfortable, luxurious work environments so that employees are able to focus on the job at hand without any distractions. That same principle can’t be directly applied to the medical industry (doctors should really wear lab coats, unless of course they have a Vicodin addiction and walk with a cane), so the perks translate out of the office, where doctors can be allowed to relax as much and as comfortably as possible so they’re ready for work.

President Obama’s plan doesn’t necessarily call for cutting salaries of doctors, at least not directly. However, by regulating that insurance companies cover higher-risk patients, his plan raises the cost of providing health care. Since the health care industry will still have to provide health care (and to more people, now that the plan is universal), the cuts will come out of doctor’s salaries. In fact, maybe hospitals will have to lay off doctors and nurses, meaning lower-quality health care. The money has to come from somewhere.

As another analogy, say the Obama administration passed a universal MP3 player program, where everyone in the country would get an iPod Nano for only $75 each. That’s $75 that Apple is losing in profits per iPod sold. That extra $75 would have to come out of R&D (if everyone’s buying iPods anyway, why bother innovating?) and Apple would be forced to raise prices in the iTunes store to keep everyone at Apple employed. Since most music buyers spend more on music than they do on music players, eventually they would lose money. Under a universal health care system, hospitals would cut funding in R&D to pay the higher costs of running the hospital, higher-income doctors would not be paid as much, meaning the quality of care could suffer (why would a high-income doctor work here for less than he could overseas?).

Universal health care doesn’t work for the same reason communism doesn’t work: there needs to be a merit-based incentive system, otherwise there is never innovation or improvement. Let’s keep the system private and let the mechanics of capitalism figure out how to best reform the health care industry. The American health care industry is the finest in the world, thanks in large part to it being private. Let’s keep it that way.

Originally posted on Cleveland, Curveballs and Common Sense on July 29, 2009 at 12:28 AM. Post text content © 2009 Jimmy Sawczuk. All rights reserved.