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Fix the economy by fixing “healthcare”

Yesterday’s post from Charles Hugh Smith has what may be the most sensible “fix the economy” plan yet.  It’s simple (not simplistic) yet challenging.  Like the simple plan for physical fitness (“Eat better.  Exercise more.”) the difficulty isn’t in figuring it out; the difficulty is in actually doing it.  While Smith has 3 major points, I’m going to focus on #2 in this post:

 You Want to Create Jobs?  Here’s How

The only engine for jobs is small business, so quit pandering to global corporations and start pandering to the people who might actually hire someone in America. The back-of-the-envelope number bandied about is that small business creates about 60% of the new jobs in the U.S. I suspect that’s a number from a decade or two ago; in the real world of the present, it’s more like 90%. …

The U.S. economy is hobbled by two systemic burdens: sickcare and the insolvent “too big to fail” banking system. Both act as enormous taxes on the productive citizenry.

You want to create jobs? Then stop diddling around with cargo-cult Keynesian “stimulus” which just props up the least efficient and most parasitic elements of the economy: the banking sector, Wall Street, cartels and fiefdoms. Keynesian stimulus is simply another facet of the Wall Street/bank/corporatocracy Status Quo: we’ve already squandered trillions in “stimulus” government spending, and very little has trickled down to the businesses which might actually hire someone in the U.S. It is a failed policy precisely because it is entirely Status Quo.

If we really want to create jobs, we need deep structural reforms. Rearranging the deck chairs on the Titanic–i.e. trimming the payroll tax 2%–is meaningless. Here’s the to-do list for those who are serious about creating jobs:

2. Reduce healthcare/sickcare costs by a third, from 17% of the nation’s gross domestic product (GDP) to 11%–then reduce it again to the level of Australian and Japan healthcare costs, around 8% of GDP. Sickcare is truly pernicious, as it acts as an 8% “useless tax” on the economy: if our developed-economy competitors can provide healthcare to all their citizens for literally half of what we spend per capita, then we are instantly uncompetitive just as a result of sickcare….

If you read the history of healthcare, it seems more an historical accident than some well-thought-out plan that employers were saddled with providing healthcare insurance for their employees. This was workable when healthcare was 1% or less of a workers compensation, but now that it’s 50%, and millions of people work part-time or are contract workers, it no longer works on a systemic level. There is nothing written in stone about this system, and in a “freelance nation” it no longer makes sense…

The common-sense solution to cut healthcare costs in half is a dual system: a VA-like system with universal access but strict cost controls and no profit, and cash: buy whatever care you want, from whomever you want. Don’t like the VA system? Fine, save your cash and buy whatever care you want, no restrictions. Don’t want to work for the VA system? Fine–get your license to practice medicine and set up shop, cash only.

This would not be a painless transition; after all, the cartel-Medicare/Medicaid complex has been on a hiring spree ever since the cartels realized there was literally no limit to how much they could bill the government. (Recall that 40% of our sickcare costs are paper-shuffling, embezzlement and fraud. That’s what’s incentivized, so that’s what blossoms.)

But the reality is that cutting sickcare in half would restore it from a “profit center” to actual healthcare in the hands of primary-care physicians.

The ultimate answer to improving healthcare is community-based healthcare. As long as isolated “consumers” have few incentives or local options for improving their own health with their peers and primary-care physicians and nurses, then improving health is fighting the headwinds of marketed illness via junk food and techno-entertainment inactivity.

If you don’t like these solutions, then come up with your own, but they have to cut U.S. healthcare spending per capita in half. Nothing less will create a competitive economy.

I essentially agree with this.  If ObamaCare had looked like this, with a modest but universal health care system for everyone, with “cash is king” freedom to seek alternative/additional treatment outside the system, all while removing the burden of health care costs from American employers, I would have supported it.

Instead, we got a monstrous inversion where the government, instead of supplying health care to citizens, supplies citizens to insurance companies.  This does nothing to address the cost or the power of the “sickcare” cartels.

This brought to my mind an article by John Michael Greer regarding the history of fraternal lodge organizations, which mentioned the “lodge trade” — how in the past, community-based lodge organizations would hire doctors to provide medical care for their members:

Lodges also provided health care to their members. The arrangement, once known as “lodge trade” among doctors, makes an interesting contrast with the corrupt monstrosity masquerading as health care reform currently lumbering its way through the US Congress. Each lodge simply went out and hired a doctor, usually on an annual contract. The doctor received a flat monthly salary from the lodge, and in return provided whatever general medical care the lodge members and their families needed. If it had a large enough membership, the lodge might also hire a couple of visiting nurses and a dentist on the same basis. Notice that this arrangement gave the patients a meaningful voice in health care quality, and imposed an effective limit on prices: a doctor who provided substandard care or charged more than the lodge wanted to pay would simply find himself out of a job when his annual contract came up for renewal…

Now it’s only fair to mention that as the lodges began their decline, they found the skids liberally greased by several outside factors. The American Medical Association, for example, spent much of the twentieth century in a sustained campaign to break the lodge trade system. Look through back issues of the Journal of the American Medical Association from the 1920s, 1930s, and 1940s and you’ll find any number of editorials denouncing lodge trade, and for good reason: the lodge trade system placed the concerns of health care consumers ahead of the financial interests of the medical profession. In the 1920s, the average doctor made only a little more than the average plumber; the end of lodge trade, and of a variety of other arrangements that subjected health care to the economic discipline of the market, was central to the shifts that produced today’s six- and seven-figure incomes for doctors.

It’s easy to see how a revived “lodge trade” could dovetail with the proposed “VA-like” government / cash dual system proposed by Smith.

Pros: Would achieve the social benefit of basic health care for all Americans while reducing costs and improving American competitiveness.  At the same time, it would preserve the freedom of Americans to choose their own healthcare (subject to what they can afford to pay, of course – but that’s already true).

Cons: I’d hate this with a burning, visceral, existential passion if I were a doctor, a malpractice lawyer, or owned lots of stock in pharmaceuticals, medical equipment, and insurance companies.

What am I missing on the pro/con lists?


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