Socialized Medicine, or Capitalized Medicine?

In 2000 I was asked by a client to make a single business prediction for the new millennium. It was “By 2011, we will have some form of national health care plan, and small business owners who have been priced out of the market will lead the charge on Washington demanding it.”

I think I’m going to be proven prescient. It wasn’t difficult, given the inflation in health care costs, the fact that a new president would be in office, and the failure of business or government to do anything to impact our ridiculous system.

Of course, as soon as you say “government health plan” there are a bunch of folks who start yelling “socialism!” Let me tell you a story from personal observation and experience. It illustrates why our system does too little and costs too much, while also showing why government-run health care is a poor option.

I was working in health care in the San Fernando Valley of California in the late 1980’s. One of the hospitals (there were about a dozen in the Valley at that time) ripped out some walls, poured a new, thick concrete floor, and brought in a monster machine called a Magnetic Resonance Imager (MRI.)

The hospital began an advertising campaign around the MRI. Billboards on Ventura Boulevard proclaimed that hospital the be the most technologically advanced in the area. They began wooing surgeons, especially spinal specialists, because imaging the nerves before surgery led to a dramatic decline in accidental paralysis. The MRI was a great thing, and it brought a lot of new business to the hospital.

Executives at the other hospitals noticed, of course. They quickly went to their Boards, saying “We gots to get us one of them MRI thangs too!” (or words to that effect.)

In the next 18 months, 8 more hospitals in the Valley installed MRIs.

Now these machines cost a lot of money, and returning to the old status quo, merely getting your own patients back, would not come near to paying for them. So the hospitals called in experts (who just happened to work for the MRI manufacturers) to give seminars to the doctors on how to use MRIs for many. many other things than just spinal surgery. Pretty soon, an MRI was standard procedure for ANY surgery.

Now some studies say the reduction in cases of paralysis with an MRI prior to spinal surgery is as much as 50%. Pretty significant, and I sure as hell would want one if someone was opening my back.

But the improvement for other surgeries isn’t just uncertain, it’s never been studied. The procedure was there, and what physician would want to be sued because he could have done something but didn’t?

So thousands of MRIs were added to the insurance bills, at tens of millions of dollars a year just for this section of one city, with no one even knowing whether it was doing any good or not. That, boys and girls, is what happens when the health care system is run by private businesses who seek to maximize profits.

Now, at about this time I happened to read a journal describing the introduction of MRIs in Canada. The Canadians, too, realized what a great benefit this machine could bring under certain circumstances.

Because Canada has a government-run system, however, “equal access for all” is the watchword. You can’t offer a benefit to one person and not make it available to another. So Canada bought 8 MRIs, and installed them in the big regional medical centers in the most populated provinces. They also restricted what diagnoses they could be used for.

Even so, the critical imaging for things like spinal surgeries quickly had a wait list of 2 years. Two year of living in a wheel chair waiting for someone to take a picture so your doctor could fix you.

So the capitalist system created a gross waste of resources, ran up expenses unnecessarily, caused new injury and illness (some percentage of MRIs cause problems, and some doctors think they foster cancer) and still left the poor and uninsured with limited or no access to the technology.

The socialist system cost far less, and offered the benefit to everyone…eventually. As long as 21 million people didn’t mind sharing what south of the border was available to 2 million.

Health care reform isn’t simple, but the folks who are saying “pick ours or pick theirs” are lying to you. Ask them if thy have any vested interest in the hospitals, insurance companies, pharmaceutical companies, physicians, equipment manufacturers, building contractors, technicians, technical schools, lawyers, or even the electric utilities who all shared some of that multi million dollar windfall.

Don’t be naive. All of those people are clearly aware of the opportunities in a system where you can introduce a new product, not have to prove it’s value, and then create a new market solely to pay for the product.

But the Canadians don’t have it right either.

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