In their latest book, Think Like a Freak, best-selling authors Steven Levitt and Stephen Dubner describe how Takeru Kobayashi turned the world of competitive hot dog eating on its ear when he smoked the competition. Kobayashi, a diminutive Japanese man, not only won the 2001 Nathan’s Hot Dog Eating Contest, the Super Bowl of competitive eating, but doubled the previous world record of hot dogs eaten – 50 in 12 minutes.
How did he do it? He did it by asking a different question. Rather than answer the question his competitors asked, “How do I eat more hot dogs?”, instead he asked himself, “How do I make hot dogs easier to eat?” By asking a different question, Kobayashi redefined the problem and found a solution far superior to any of his competitors. Instead of eating hot dogs normally, he found that eating the bun and hot dog separately was more efficient.
The point of the story is that whenever we have a vexing problem, we should step back and consider whether we are even asking the right question.
The Democrats passed the Affordable Care Act during the Obama administration. The Republican House passed the American Health Care Act and now Senate Republicans are working on their own legislation. All of this has been done to solve the problem of healthcare. But have we been trying to answer the right question?
Our elected officials have been asking, “How can we give health insurance to everyone?”
There are a few problems with this question:
Health insurance is a fiscal entity geared toward protecting one’s assets. Does it make any sense to force those who have no assets to purchase insurance?
Using insurance as the medium to receive medical care causes escalating costs as the phenomenon of moral hazard is ignored. So, going this route inevitably will result in price increases like we have already witnessed under the Affordable Care Act.
Health insurance is not healthcare. Just because you have health insurance does not mean you will get healthcare or that the insurance company will even pay for your healthcare. The inevitable result is increasing costs with reductions in healthcare provided. So, unless you want continued inefficiencies, escalating costs and bureaucratic nightmares, you might want to rephrase the question asked.
Maybe a better question to ask is, “How can we provide the best quality healthcare to the greatest number of our citizens for the least cost?” The only real answer to this question is free market capitalism.
The United States produces roughly 25 percent of the global gross domestic product with only 4 percent of the world population. The reason for this has nothing to do with anything innate to our population, or the natural resources available to our country. There are other places with populations who work harder with even more natural resources.
No, the reason for such a productive country is free market capitalism. We have witnessed this miracle of economics in every aspect of business. In the United States, we trust free market capitalism to produce the best quality for the lowest prices in all industries … except healthcare.
We have not had a free market in healthcare since 1965. In the small sliver of healthcare where free markets have been allowed (refractive eye surgery, cosmetic surgery and third-party free medical practices), we’ve seen prices drop while quality improves. Prices are lower now than 10 years ago with better quality. You cannot say this for the rest of medical care, where prices have skyrocketed and the average visit with a doctor has shrunk considerably.
The examples of refractive eye surgery, cosmetic surgery and third-party free medical practices demonstrate that free market capitalism will work in healthcare.
Of course, there are exceptions: emergency life-threatening medical care and care for the indigent.
However, less than 2 percent of healthcare spending is for emergencies. For the indigent, Medicaid has been the safety net for healthcare. Unfortunately, Medicaid has been a huge source of waste, abuse and fraud. While these are problems that need to be addressed, it makes no sense to destroy the entire industry of healthcare for questionable gains in these exceptions.
Rather than trying eat more healthcare hot dogs, maybe we should be trying to see how we can eat the healthcare hot dog more easily. Depending on the question you ask, the answer will be radically different. Should Congress and the president be focusing on insurance or healthcare?
Gerard Gianoli (@gerardgianoli) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a physician specializing in neuro-otology and skull base surgery at the Ear & Balance Institute in Covington, LA.