Morals of Modern Medical Pricing

As people, do we have any ethical or moral obligations to each other? Is that a quality that separates humanity from the other beasts that roam this planet? If a person has the ability to prevent a tragedy from occurring to another, to what degree should they be required to act? These are the types of philosophical questions that must be self asked and answered in order to build a better society. They are also questions that relate directly to the great health care reform debate.

What if we took the same attitude towards our fire department that we took with health care? If firemen come and save lives/house, should they then be entitled to thousands of dollars in payments from those who were saved. Actually, more to the point, should the fire department ask for huge fees just for trying? This is similar to the state of national health care that American society currently accepts. Sometimes the danger may be less imminent, but it still boils down to making money due to tragedies of our fellow man.

None of this is to claim that doctors do not provide an extremely valuable service. Most people would have no problem with skilled professionals involved in all levels of health care receiving a very fair compensation. People should have to pay for the time and products that they use. However, where the differences between fair compensation levels and reckless profiteering off the misfortune of others are is a highly debatable subject. It is also a subject that is based not only in morals, but in economic realities. How long can a society continue to function when its citizens are paying an increasing portion of their disposable income towards health?

Modern economics due not work on the macro scale with regards to health care. Free market economies work on the very basic notion of finding where supply and demand meet and pricing at that point. This works wonderfully for most goods and services because the consumer has a point where they the value of the service/product is no longer greater than or equal to the price of the item. However, when it comes to health care, the demand curve is often vertical up to a person’s total value. When the value of an item is infinite to its user, the seller can price at the user’s maximum net worth. In health care, this is even worse because the industry practices discriminant pricing (different prices for different people). With most people valuing their lives far greater than any of their other assets, health care professionals can truly price what the market will bear. That is not a set of circumstances that lends itself to an effective free market. It does work for a market based on extortion.

I would be remiss not to point out that increases in supply can drive down these price points to some degree, but supply will never be plentiful enough to push the overall prices for many procedures into a reasonable range.

In some ways, health care profiteers are helped greatly by the time frame that illness takes to create mortal danger. Fire departments have to be government funded (at some level) because of the need for response without any delays caused by purchasing decisions. If fire took months to destroy a house and kill the occupants (and fire houses were privatized), there could exist a negotiation policy that would destroy victim’s finances in exchange for life saving actions.

There are many legal and economic tweaks that can be made to change the system. However, at the end of the day, we really need to change our attitudes overall. What does it say about people that we have turned our own misfortune into huge profit centers? I leave it at that…for now.