“States and private markets, not the federal government, hold the key to improving our health care system.”
Those are the words of Presidential candidate Mitt Romney, as he articulates his health reform vision on his campaign web site.
U.S. health care costs are around $2.5 trillion. This money buys a lot of care, and pays a lot of salaries. One out of every six workers in America relies on the health care industry for a paycheck.
Romney thinks that’s too big a cost for care.
“At its core of this debate,” he writes (jarringly inarticulately for an official campaign web site), “is the question of what creates better patient outcomes and more efficiency: free enterprise and consumer-driven markets, or government management and regulation?”
I realize that he wants us to answer “free enterprise and consumer-driven markets.” But in this case, that doesn’t happen to be true.
The reasons why we have even a semblance of an affordable health care system in America are government management and government regulation. Relying on free enterprise and consumer-driven markets in their place would lead to an unmitigated (sorry about the pun) health care financing disaster.
It is the salaries of professional athletes that may best illustrate why.
In a free enterprise system akin to what Mitt Romney proposes, the salaries of the most highly skilled health care professionals might be similar to the salaries of the most highly skilled professional athletes. In fact, they once were. In 1950, family physicians earned an average annual salary of $12,480. That was before Medicare, Medicaid, and a whole lot of governmental regulation.
In 1950, the average salary of a major league baseball player was comparable - $13,300. That was before television advertising.
Let’s look at what has happened to health care salariessince then.
Today, the average salary for a registered nurse is just over $67,000. Pediatricians make almost $166,000. Psychiatrists make $168,000, and anesthesiologists make $336,000 a year to ensure that we undergo surgery without pain and without losing our lives to a drug overdose.
Governmental management and regulation have a great deal to do with those salaries, because the Medicare system drives the prices providers can charge to patients and private insurers.
Are they too high? When valued public sector employees such as police officers are making $55,000 and firefighters only $47,000, it may seem so.
And in the private service sector a house painter who makes $37,000, a janitor who makes $24,000, and a child care worker making $21,000 may wonder if health care professionals would really be ten times more valuable in a free enterprise system than they are.
The answer is yes, they probably would be. We demand highly-skilled, highly trained professionals to tend to our health. We can’t perform surgery on ourselves, but if we had no alternative most of us would do our own painting, clean up our own messes, and give up school and work to raise our own children.
So in a free enterprise system, how highly might we value health care professionals?
There are only 4,600 neurosurgeons in the entire country. It just so happens that there are also just over 4,600 elite professional athletes playing in the National Football League, Major League Baseball, the National Basketball Association, and the National Hockey League combined.
Neurosurgeons are at least as highly trained and as elite a group of professionals as major league athletes. Neurosurgeons make, on average, around $220,000 a year, though in some areas of the country the number is higher and the best can earn upwards of three-quarters of a million dollars annually.
However, major league professional athletes, who sixty years ago earned what doctors earned, now make, on average, $2.7 million dollars each, more than ten times what neurosurgeons make. That’s the effect of free enterprise.
If we turned our health care system into more of a free enterprise system, would a professional athlete still be worth ten times as much to us as a highly-skilled surgeon and forty times as much as a nurse?
Probably not. The salaries of health care professionals would undoubtedly go up.
Mitt Romney’s new health care vision for America is far different from the one he envisioned as Governor of Massachusetts. In a consumer-driven, less-regulated market, the high demand for health care would increase, not decrease, health care costs. There isn’t really any question about this.
In fact, the only question is why is Mitt Romney pretending otherwise?
If you have questions about this column, or wish to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.
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