Wednesday, July 12, 2006

"Health" Care

Billmon has some interesting news from the land of un-socialized medicine: Apparently, despite the spiralling costs of the health care industry in the US, the sector posted a 5% loss. Bad news abounds, and the explanation is simple: Private medicine is terribly, profoundly dysfunctional:
It wasn't supposed to be this way: Obesity, lack of exercise, fast food, alchohol and tobacco, plus the inevitable gray wave -- these were all supposed to keep the demand for beds growing at an unhealthy pace. Certainly, that's what the for-profit hospitals have been counting on, and building for. But it appears higher deductibles and co-payments are doing what they're designed to do: reduce demand. Paitients are postponing "voluntary" surgical procedures and other forms of care. Meanwhile, the debt burden of unpaid bills from uninsured deadbeats continues to rise -- to the point where it's threatening corporate credit ratings....

For most profit-maximizing industries, the rational response would be to shed excess capacity -- excess in the sense of not providing goods and services that customers can afford to buy. Some hospitals are doing just that, according to a recent report from the Institute of Medicine (one of the federal National Institutes of Health.) They're closing their emergency rooms, which have become the health clinics of first and last resort for the uninsured...
There was a bit of news lately about emergency room waits in Canada. I don't want to minimize the problems our health care system faces, but when you see news like this it's hard not to be thankful.

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