Psychiatr News December 2, 2005
Volume 40, Number 23, page 49
© 2005 American Psychiatric Association
No Free Marketplace
Steven D. Field, M.D.
Northbrook, Ill.
In the president's column in the July 15 issue, "Every Psychiatrist
Needs to Be an Advocate," Dr. Steven Sharfstein refers to the American
health care system as being "in crisis," and he blames the crisis
on a fundamental shift in 1980 to a "for-profit" system of
providing health care. While I strongly agree that the system is in a state of
crisis and that limited access is a big part of that crisis, I believe Dr.
Sharfstein has gotten it backward when he points his finger at the for-profit
system for the mess we are in.
Our current system is a perversion and not a true "for-profit"
system. Indeed, we turned away from a free marketplace in health care in the
1930s. We physicians were instrumental in developing a new animal: a
three-party system where one entity receives care, one entity provides care,
and yet another entity pays for care.
Our government uses tax laws to make it uneconomical for individuals to pay
directly for health care. Moreover, employees do not have to pay income tax on
the value of health insurance they receive from their employer or on the value
of health care received as an insurance benefit. However, when patients do pay
directly for health care expenses, they use dollars that do incur an
income tax. Thus, there is a huge economic incentive to get broad insurance
coverage even if it means lower salaries and to have a third party pay for
care received.
This evolution in health care financing ("insurance" is truly a
misnomer) created a prolific revenue stream to doctors and other clinicians,
as well as health care institutions. More importantly, all free-market forces
that would have restrained health care costs—namely, competition at the
provider level, clinician with clinician, hospital with hospital, and so
on—were circumvented. Health care consumers do not have a financial
stake in where they receive care. And while the third-party entity paying the
bills was initially a "silent" partner, it was destiny that this
silence would be short-lived (evolution of managed care).
The result is a bloated, inefficient, pseudoegalitarian bureaucratic system
that often provides excellent care but at a much-too-high cost. Competition
for huge health care contracts among giant corporations managing group health
care does not constitute a free marketplace at all. I believe that if one
studies the history of health care financing in our country, one would
conclude that we need less centralized control over health care, not more, as
Dr. Sharfstein implies.
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