Lung Cancer and Healthcare Reform -- Adding My 2 Cents

The debate about heathcare reform is raging on and it has a lot of people concerned about the future direction of the country. I feel I am (or should be) on the frontlines of the debate. First of all, I am a lung cancer patient receiving excellent care from our privately run health system. I wouldn't change that for the world. On the other hand if I lost my job I would be one of the people who would be uninsurable. Secondly, I am Chairman of the Board of St Vincent de Paul Community Healthcare, a not-for-profit clinic and pharmacy here in Charlotte County, which is taking care of the needs of thousand of people in our community who have no healthcare coverage, including patients with cancer. I have a pretty good idea about who the uninsured are. Third, I've lived in a country that has universal healthcare (Japan), so I know what is possible. And lastly, being a stockbroker, I understand how markets work. I feel I understand the issues in the debate-- both pro and con. Would you like to know what I think?


Having the central government command a crucial part of our economy can be likened to my experience in China in the mid-1980's. At the time I was working with the accounting firm Arthur Andersen. We were engaged to help one of the world's largest producers of duck decide whether it was the right time to invest in China. The Chinese did not produce enough duck and wanted my client's technology so they could produce more. After a 10 day trip to understand the environment we did not go forward with the project because the Chinese had a political need to control poultry prices and would not allow us to charge what it cost to produce ducks and receive a premium for the risk we would be taking. The government ran the show in China and could not politically do what was needed to increase pricing to attract producers and create a clearing market. The result was price controls and a continuing shortage of duck. Its the same reason there were bread lines in Russia.


Today we have the equivalent of breadlines in the healthcare industry. We have a dwindling supply of primary care physicians because they are not sufficiently reimbursed from Medicare (i.e. price controls). We have a developing cadre of "consierge" doctors who "don't take" medicare or certain insurance coverages and charge a country-club like entry fee when accepting new patients (i.e. a sort of black market for heathcare.) The supply of heathcare providers is shrinking because of cost controls imposed by government and private insurers. Once everyone has "universal healthcare insurance" and cost becomes irrelevant there will be lines for every kind of healthcare service. That's just the nature of markets. What we need to make our healthcare system work are clearing markets -- and equilibrium between supply and demand.

I am not sure insurance is the answer. When an insurer is paying virtually the entire cost, what incentive is there to keep costs down? We'll spend whatever it takes to keep Mom and Dad alive, even if it is for a few more weeks. That doesn't make much sense really.

I think the answer is staring us straight in the face but no one has proposed it. We should have public facilities, just like we have public schools. We have made education a human right and mandated that every community have public schools. Why couldn't we do the same thing for healthcare? Why couldn't we create public health clinics and dental clinics, out-patient surgery centers, imaging centers and hospitals where you can be treated for free. There is no insurance intermediary. Undoubtedly, since it is free, there would be lines. We would need an army of doctors to do their residency and hone their skills at these public facilities. We could have a system where, after a certain period of low-paying public service, medical student's school loans are forgiven. Doctors could then enter into private practice debt free. Any healthcare worker working at a public facility would be entitled to sovereign immunity and indemnified by the state.

If you don't like the quality of services a public healthcare facility provides, nothing would stop you from purchasing health insurance and going to private facilities and paying a premium for superior service. Under my proposal private hospitals would not be required, as they are today, to care for the uninsured, saving the hosptials millions, resulting in lower insurance costs.

How would all this be paid for? What about using the $900 billion President Obama is saying we can save from the waste in the current system to build healthcare facilities all over the country? (This would be a stimulus on par with building the building of the national interstate road system and a gigantic stimulus to the economy.) We should be able to divert medicare insurance proceeds to building a public healthcare system. We're still going to end up with a shortage of healthcare workers, but I am sure we could create incentives to create the added workforce we will need.

What do you think?