The reason Republicans don’t care how the Congressional Budget Office scores the Republican healthcare plan to replace Obamacare is that they are under the illusion that the free market, if left to its own devices, will come up with ways to lower the cost of insurance and so allow more and more people to keep coverage. Let insurers sell policies across state lines, which means that they will offer policies that are so bare bones as to be useless, but people will have become “free” to choose the plan they prefer. The truth of the matter, to the contrary, is that the idea of the free market failed to explain or prevent other economic problems, like the Great Recession and what to do about the ten percent of the population that probably can’t hold down places in the work force, and the market model is just as wildly inapplicable to medical care. Even back in the days of horse and buggy medicine, when the town doctor could do little but set bones, see you through a bout of an infectious disease, or tell your family that you were dead, doctors engaged in a sliding scale of fees, charging their poorer patients less than they did their wealthier ones, accepting a few chickens as remuneration for attending a farm family. The poor depended on charity wards and free clinics or went without. All this at the same time that late nineteenth century capitalism was developing a system of standard prices openly advertised as such so as to rationalize merchandising. You didn’t haggle over the price in the Sears Roebuck Catalogue. It was different at the other end of the ladder. George Bernard Shaw, in “The Doctor’s Dilemma” shows Harley Street physicians out to make a buck by selling useless nostrums and surgeries for made up diseases to their patients because they could get away with it. Going to a doctor was like going to a spa is today for the self-pampered rich. The best that could be said of it was that it did no harm.
Things changed as a result of surgery and, later still, the development of antibiotics. Now doctors could make a difference in their patient’s lives, and so it was worth paying good money for the services because a life, many lives, were at stake. Medicine became a necessity rather than a luxury or a relatively easily carried cost because treatments were short and low on technology. This is very different from deciding to buy a more expensive car because it has a smoother ride, the sort of purchase where the free market is relevant. Rather, it would be like saying that a car manufacturer could market a car without brakes or one more likely to explode if the price were a little less. When the free market did not regulate minimum standards, government stepped in, just as it had done for thousands of years in regulating markets in Babylon and Paris.
That is when, in the Fifties and Sixties, the insurance companies stepped into the finances of the medical industry. Insurance companies had financed large real estate development and other capitalistic ventures because of the large amount of money they had on hand as a result of people buying life insurance. That source of cash was drying up as people began to invest their money with mutual funds and other investment products rather than in life insurance. The main reason, though, that the insurance industry glommed onto medical care was because, like life insurance, medical insurance was a natural for an insurance approach. It is a way to hedge against a catastrophe or an uncertain payout for medical care by making smaller regular payments, knowing full well that one is paying for the assurance that comes from knowing that one is covered as well as because the amounts covered may turn out to be far larger than the amounts paid to the insurance company. It is to be noted that attempts during the same period to mount schemes for lawyer insurance foundered because fewer people need legal advice and more people can just do without it unless they are liable to criminal justice procedures, and those people are unlikely to be able to afford lawyer insurance, while corporations already have counsel on staff to handle most of their legal problems. But health insurance found a ready market.
Conservatives like to claim that the arrival of medical insurance companies as third party payers led to an increase in medical costs because consumers were no longer looking through their bills to see that they were paying a few dollars for an aspirin or a doctor was billing for a consultation that they knew nothing about. Presumably, prices were going up because someone other than the patient was paying, even though the patient was paying in ever rising health insurance premiums, which had originally been seen as a cheap way for corporations to pay off unions when it turned out that health care benefits had become a major cost for corporations and the corporations were not very successful at turning the spigot down. Similarly, Conservatives blame Obamacare for the low number of competitive plans available in many states. But the poor state of rural medicine preceded Obamacare. Health care costs were higher for a sicker population and doctors did not want to settle so far from the cultural amenities that they desired. There are reasons beyond the systems set up to ameliorate problems for why the problems do not get solved. Poverty is not the result of poverty programs, which is what Conservatives always claim, but because the economy does not supply sufficient jobs that pay a liveable wage to many of the people raised in poverty, even though some of the children of the poor do develop the skills or have the smarts to be more productive members of the work force.
The real reason insurance premiums were going up, despite the attempts of insurance companies to bring health care costs under control by rationing care or auditing hospitals and other health care providers, was because medicine was in fact getting better at treating diseases, even heart disease and cancer, but that meant more rather than less cost because of the new technology, such as CAT scans, that insurance had to cover, and because preventive medicine is very expensive to practice because it requires regular checkups and screenings even if the cost of a disease nipped in the bud is cheaper than a disease that proceeds to become a full blown case of the disease. Yes, the health care system has updated itself repeatedly, moving back to an office based rather than a hospital based practice because hospitalizations are very expensive, and reducing to outpatient status procedures that once would have required some days or more taking up a bed at a hospital. But the future is not going to be efficient. Turning cancer into a treatable, chronic condition will mean regular monitoring of patients by physicians or their assistants and treatments very expensive to develop and a lot more medical “toys” to use to diagnose and monitor the progress of a disease. The future is one where even more than the sixth of the economy that presently goes into it will go to medicine, although I am not sure that is a bad idea. What better way is there to spend the money of an affluent economy than in extending the life span and the quality of life during that lifespan? Better to spend that money on even larger stadia and more brutal sports? Only Republicans think that spending a lot of money on health care is a bad thing.