Think of a supermarket. There are probably more than a hundred in the city of Dallas alone. I can walk into any of them — in most cases, at any time day or night — and buy thousands of different products. The only wait I experience is at checkout, but express lanes speed that along if I want only an item or two. When I go to purchase something I want, the product is always there. I can’t recall an instance when a shelf space offering something I wanted to buy was empty. Further, the products being offered are produced by thousands of different suppliers, and they travel thousands of different routes to get to market. What is true of Dallas is true of every city of any significant size in the country.
Contrast that with the market for medical care, where almost nothing is available at the drop of a hat. According to a Commonwealth Fund study, nearly one in four patients has to wait six or more days for a physician appointment. Less than one-third of physician practices have made arrangements allowing patients to see a doctor after hours when the practice is closed. Sixty percent of patients find it difficult to get care after hours or on weekends. Newspaper reports around the country tell horror stories of the consequences of the shortage of cancer drugs and other life-saving pharmaceuticals. Four- and five-hour average waiting times at hospital emergency rooms are not uncommon.
So why is there so much difference between these two markets? I would argue that one is a real market where consumers face real prices, whereas the other is an artificial market where the price system has been suppressed.
You can’t always get what you want
But if you try sometimes you just might find
You get what you need
We previously reported on a study that found that enrolling children in CHIP does not result in their receiving more medical care. But when CHIP pays higher fees to doctors, its enrollees do get more care. Think about that for a minute. We encourage low-income families to enroll their children — in most cases by making the insurance absolutely free. Many of them drop their private coverage to take advantage of the opportunity. But we make it illegal for the family to add to the government’s fees and pay the market rate for their care. They can have free health insurance only if they agree not to purchase the same care everyone else is able to buy.
When we expand a public insurance plan for low-income patients, we are spending billions of dollars in a way that doesn’t increase their access to care. At the same time, we forbid the enrollees to do the one thing that would expand access to care.
Contrast this foolishness with the Food Stamp program. Low-income shoppers can enter any supermarket in America and buy almost anything the market has to offer by adding cash to the “voucher” the government gives them. They can buy everything you and I can buy because they pay the same price you and I pay. But we absolutely forbid them to do the same thing in the medical marketplace.
This is why Tom Saving and I recently proposed to get Medicaid and CHIP out of the business of dictating prices and replace that activity with a health stamp program, fashioned after the food stamp (SNAP) program. Enrollees would get stamps, depending on their health condition, and they would be free to add their own money and pay any price for any service the medical marketplace has to offer. In this way, low-income families on Medicaid would be empowered patients who could compete for health care resources on a level playing field with other patients, at least for small dollar health purchases, which would include almost all primary care.
The idea behind health stamps is straightforward. Like food, health is generally considered a necessity. So why not treat it the same way we treat food? We don’t segregate grocery stores into those that sell to poor customers and those that do not. Grocery stores take all comers, and they charge the same price to each of them. The way we subsidize low-income families is through the food stamp program, a highly successful poverty program that now reaches 50 million people. The program allows poverty and near-poverty families to have access to the full range of food products. Because they pay market prices, Food Stamp families are welcome customers at every grocery outlet. Although they live with more limited budgets, Food Stamp families are able to make tradeoffs in grocery choices — using Food Stamps in a way that meets their own preferences and needs. Competition for Food Stamp dollars forces stores to compete on price and, unlike health care, the prices are transparent. Every paper contains full-page ads in which price plays a dominant role.
This proposal makes certain that the poor have the wherewithal to pay for their health care not by forcing them to wait or take poorer quality, but with health care dollars. These health care dollars are full dollars to providers, ensuring that the poor can complete for resources with all other buyers of care.