Private Healthcare is not Open and Public Healthcare is not Closed.
Healthcare is the largest sector of the United States economy, and there is plenty of argument over whether it should be single payer or competitive. People argue about whether healthcare should be private, public, or both. The US receives faster healthcare at four times the price of Britain’s slower care and two times the price of Canada’s slower care. The question becomes, is it better to receive faster care and fight with health insurance companies and healthcare providers over the exorbitant cost of care, or is it better to fight with healthcare providers to receive any care and not have to worry as much about the cost of care?
Missing from the discussion is the discussion of how United States private and public healthcare are not really open or closed. Americans complain about high prescription drug prices and the pharmaceutical industry is a key area where private healthcare is not open, it is often not competitive. A cancer drug approved by the Food and Drug Administration is patent protected for ten to fifteen years. Pharmaceutical companies put hundreds of millions of dollars into drug research, so the FDA gives them a monopoly over sales for an extended period of time.
A cancer drug approved by the FDA may cost $1000 or $10,000 per month, and the price is not going to change. In 1949, the federal government filed an anti-trust lawsuit against the Bell System for its control of over 85% of telephone services, but the federal is not going to file a similar lawsuit against a cancer drug maker for its control of 100% of a cancer drug. After more than a decade of a single producer of a drug, the drug becomes generic, essentially splitting up the monopoly ten to fifteen years behind schedule.
Regardless of whether it is fair for a drug maker to have complete control, it is not competitive. The federal government protects a single drug maker against other drug makers. The federal government patents a drug like a smartphone and not like an iPhone. Many technology companies know how to make a touchscreen phone, and they can make a touchscreen phone that is not an iPhone. Many drug makers know how to make a cancer drug that has a similar effect to a patented cancer drug, and they cannot make a drug with a similar effect for ten to fifteen years.
Hospital networking is another way that private healthcare is not open, and it is a way that public healthcare is not closed. Private and public health insurance companies compete for health insurance providers who will provide service at the lowest cost. Medicare, a federal government program, and Medicaid, a state government program, are involved in this competition with private health insurance companies. Private health insurance companies want the lowest price for inpatient and outpatient care and public health programs also want the lowest price.
While hospital networking is competitive and the city, state, and federal government are involved in the separately involved in competition, hospital networking is not open. A private or public health insurer may refuse to pay for a treatment by one healthcare provider because a second provider in network will perform the same treatment for half the price. Meanwhile, another health insurer may approve treatment by the first provider because it is in network and will receive treatment at a lower price.
You might argue that hospital networking is like getting a card for a local supermarket to receive discounts. Pay a monthly rate to the supermarket and a product or service will cost less than for another person who does not pay a monthly rate. Hospital networking is not like a supermarket discount care because not all health insurers have access to the hospital network, regardless of what price they are willing to pay. The health provider discount card is only distributed to certain insurers to purchase service for less.
Drug patents and hospital networking are only two areas where private healthcare is not open and public healthcare is not closed. However, private and public healthcare are competing and making deals everywhere in closed and open market schemes. Public health insurance programs outsource to private health insurance companies through managed Medicaid and managed Medicare plans. Health insurers and healthcare providers charge different clients different prices through hospital co-pays. City, state, and federal health insurance programs and public healthcare providers do not act as one system. Public healthcare is open competing for services and private healthcare is closed making agreements with the government that are not competitive.
