Government & Healthcare

If you listen carefully to the debate on healthcare and for that matter on other pending legislations in Congress, you will find that the basic argument is over how far we want government involved in private enterprise. There seem to be two schools of thought.

On the left, there is a general disdain for businesses who make profit from healthcare. They want to "rescue" the common man from the "clutches" of big business. Their approach is to get government micro-manage private enterprise.

On the right, there is a general disdain for government. They like the laissez-faire approach where government has no role in private enterprise. WSJ recently published an article Ayn Rand on the Economic Crisis - WSJ.com which discusses Ayn Rand's take on government involvement in private enterprise.

I feel the answer lies somewhere in the middle of this continuum. An important lesson from the current economic crisis is that laissez faire approach does not work. Alan Greenspan, an ardent follower of Ayn Rand and a strong proponent of deregulation admitted this in his testimony to Congress last year after the economic crisis when he said that he was "shocked" to learn that markets can not self-regulate.

If we start with the premise that government has a role to play in private enterprise then we need to decide how much government involvement is appropriate. In my view, government should ensure there is no monopoly, should ensure that no one company holds the whole industry or sector hostage by becoming "too big to fail" and should establish broad regulatory framework based on outcomes. Government should not be too narrowly defining what a company can or can not sell.

For example, current healthcare bills actually defines what should or should not be covered by an insurance plan. It goes on to define what procedures should have no co-insurance cost ("mammograms should be free"). Government should not legislate what type of products are sold in the market. It should just ensure that there are enough companies selling that product and market will take care of the rest. I say this from my personal experience. Recently I was in the market for health insurance for my family. After comparing various plans in the individual market on an exchange like the one my company hCentive http://www.hcentive.com/ is building , I recently bought a very high deductible HSA (Health Savings Account) compatible plan. My deductible is $10,000 but my monthly premium is very low. Knowing the health of my family and our financial risk appetite, I feel this is the right plan for me. Until my deductible is met, nothing is "free" in this plan. If Congress has it way, it will be illegal for me to buy this plan in future. Congress is substituting its mandate for my judgement on what is right for me.

I feel this is the problem with the current approach to healthcare reform. Government has an important role to play but that role should be to ensure their is true competition in the market place and proper regulatory framework exists. Congress should not substitute its mandate over consumers own judgement on what is right for them.