Okay, one more health care post today. Libertarian extraordinaire Michael Cannon took to the OC Register -- the paper that most people in my hometown regard with the sort of sad bemusement usually reserved for cranky relatives who still use the word "Orientals" in conversation -- to write an article called "Universal Coverage Kills." I critiqued here. Today, Cannon responds, and makes things so much worse. Cannon's original argument was very simple: Medicare only recently ceased paying providers to repair a particular class of medical errors called "never events," so named because they should never happen. The private market, cuz it's teh awesome, solved this problem around the time your parents were playing with dolls. "More than 60 years ago, markets devised health plans that discourage medical errors by forcing doctors and hospitals to bear the financial costs of all such errors." In his reply, Cannon says he's talking about "prepayment" plans which "give the provider a flat amount of money per patient," though that word didn't appear in his original article. So to recap: The solution here is "prepayment," also known as "capitation payment." It is, at best, a niche concept in American medicine. The bulk of doctors remain on fee-for-service. But hey, funny thing: It's the main method of payment in the socialized British system. Capitation has been tried in America. But the "market" beat it back. Most American doctors remain on fee-for-service, which is exactly the payment system where you have to pay doctors to "service" their own errors. This is true for insurance companies, who work with private doctors, and Medicare, which works with private doctors. Conversely, the VA, the nation's largest socialized health care system, employs its own doctors, and pays them salaries, not fee-for-service. Cannon doesn't exactly have a way to rebut this disjuncture between what the market hasn't done and what socialized systems have done. So we get a bit of handwaving about the ways physicians have harnessed the law to block the inevitable march of prepayment. It's handwaving that can't really be quantified (we had a rise in prepayment and then a drop in prepayment, and that wasn't the result of the "Prepayment is Awesome Act of 1990" nor the "Prepayment is Not Awesome At All Act of 2002"), but I'll happily admit that it may have thrown up some roadblocks. But that one's not really on government -- it's on the medical profession itself. The same medical profession that Cannon is hoping will adopt prepayment if government just stops...what? Stops letting them interfere? At the end of the day, the balance here is clear. The more market you have, the more fee-for-service you have. The less market you have, the less fee-for-service you have. Cannon gives it a good go, but that's a hard reality to twist away from.
