Free-market health care does not work

Why are health care costs skyrocketing? Because they CAN! Thank our unregulated free-market system…that exists in no other country.

Emily Ramshaw writes in The New York Times that too much use of the neonatal intensive care units (NICU) exists, but that’s just the beginning. Doctors that were once independent and controlled hospital cleanliness and quality, are now employed by the hospitals and are thus obligated to their employers. In fact, some receive “productivity bonuses” when they increase patient admissions and the ordering of expensive MRI testing and NICU admissions.

Get used to it!

Conservatives call it Free Market health care; others simply label them commissions; I call it “kickbacks” and a blatant conflict of interest that must be made illegal.

Don’t get me wrong. Doctors and nurses should be paid very well, and they would be under a Medicare-for-all system. But they should not be paid on the basis of how many patients they admit or tests they order or don’t order.

Where to start?

Hospitals succeeded in killing state Certificate of Need (CON) programs which prohibited unwise building in an area, so they can now do whatever they want. They can now buy up the doctor-clinics in the area and take their (previous) business elsewhere, leaving the established hospitals naked. (In Wisconsin this happened in Summit and Grafton, and is about to happen in Menomonee Falls.)  They can double beds by building in areas that have not doubled population, all because they now employ the doctors that fill those beds. It’s a good racket, but it eliminates the competition for physicians to bring their patients there. They are required to by their hospital employer.

And get this: in 100 percent of the cases, equipment utilization and hospital efficiencies go down and health care costs increase. It has never happened any other way.

The Fix: Reinstate the CON and prohibit hospitals from employing physicians who admit patients or order tests. They must remain independent. Some hospital-employed physicians are OK, like those radiologists or specialists who only interpret X-rays or nuclear studies, and who themselves do not order or admit.

Administration by private for-profit insurance companies is a total waste of dollars, like giving your pizza delivery guy a chauffeur. Health care is health care, and it does not change with the mode of payment. But private insurers drain costs for CEO salaries, bonuses, shareholder profits, marketing, broker commissions, legal fees to defend denials, actuarial costs, and even political costs that are passed on to the patient. These are not needed to provide care, and wouldn’t be present under a single-payer Medicare-for-all system.

The Fix: It is clearly a Medicare-for-all system like Canada’s but without the wait times. And since we spend 17 percent of GDP and they only 10 percent of GDP, it’s easy to do. (They could eliminate their wait times by simply upping their expenditure to 12 percent of GDP, but they haven’t yet done that.)

Tort Reform is a very small piece of the pie (like 2 percent), but easily we could replace the 12-man jury of idiots with a three-judge panel of experts. Allow legal appeals with the loser picking up the court and legal costs.
Fraud exists in both Medicare and private insurance, but more so with private because it is more profitable and involves less jail time. But rather than “fraud police” we should strengthen whistle-blower protections so the employees themselves become our eyes and ears.

Yes, yes, I can hear you say it: “Now THAT all makes sense; let’s just do it!” But hospitals and the insurance industry and liability attorneys all fund the political campaigns.


Jack Lohman is a retired business owner from Colgate, WI and author of "Politicians – Owned and Operated by Corporate America." He is publisher of

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