Sunday, September 20, 2009

The Great State of the Texas Economy & Health Care Competition vs. Its Go-it-alone Image

No matter how Gov. Rick Perry wants to frame his states budget, the response should be, "you lie." According to the Star-Telegram:
In recent months, Gov. Rick Perry has savaged the stimulus package, lambasted federal attempts at healthcare reform and hinted at secession because of federal tax-and-spend policies. Then, on June 19, Perry applauded the state’s "balanced" budget ... noting that lawmakers had left the state’s Rainy Day Fund untouched and had cut taxes for 40,000 small businesses."

But records show that it was the much reviled federal stimulus money that saved the day.
And when if comes to the health care reform debate, Texas' free market entrepreneurial spirit has pushed medical costs through the ceiling. In the headline, "Dallas sees no relief in health care expenses as competition drives up costs," we are witness to the flawed ideological thinking of the Republican brain trust in Washington. Their reform plan calls for expanding the free market private health care industry, for insurance and providers, to supposedly lower prices with competition. After bring down the world economy, is it any surprise they're wrong again? The Dallas Morning News:

Medical care in Dallas is delivered in a broken market where doctors, hospitals and other providers shower patients with services of diminishing value but staggering cost. The spending is rooted in the city's proud entrepreneurial culture. Dallas is home to many competing hospital systems and physician practices. But this competition raises costs rather than lowering them, because it rewards those who do more procedures and tests and offers no incentive to spend less.

"Logically, the more competition, the lower the price. It doesn't work that way in health care," said Scott & White president and CEO Alfred Knight. "Competition increases the price."

"The laws of supply and demand are not working," said Darren Rodgers, president of BlueCross BlueShield of Texas.

In other businesses, competition tends to drive prices lower as companies jostle for customers. Not in health care, and not in Dallas. Competition drives up spending, as demand is stimulated by health providers, not necessarily by patients. Medicare spending in Dallas for these services is among the highest in the nation.

The state's demographer projects that nearly 36 percent of Dallas County residents under 65 will be uninsured next year.

Dallas spends more for health care than almost any other big city in America, and the bill is climbing fast.

BlueCross BlueShield of Texas, the area's largest insurer, says hospital prices in Dallas have gone up more than 10 percent a year for the last five years. Area doctors services are up more than 20 percent in five years. For an average Dallas family of four, medical care and health insurance this year will cost nearly $17,000, according to a survey of Dallas employers by risk management firm MHBT. "In 2020, 41 percent of a family's wage base will likely be set aside for health care," said Princeton health economist Uwe Reinhardt.

Texas ranked 46th in overall quality of care in 2007; Texas ranked 48th in the number of patients whose hospitalizations could have been avoided by preventive care.

Peter Orszag, the White House budget director, says medical costs have already forced states to limit spending on higher education and other services.

Many physicians argue that the threat of a malpractice lawsuit prods them into ordering extra treatments and tests. Texas addressed this in 2003 with a constitutional amendment capping non-economic damages in malpractice suits at $250,000. Malpractice insurance premiums have dropped, but the cost of medical care hasn't. Dallas doctors are still ordering extra treatments.

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