Newspaper article THE JOURNAL RECORD

Should Health Care System Be Regulated as a Utility

Newspaper article THE JOURNAL RECORD

Should Health Care System Be Regulated as a Utility

Article excerpt

In the 1970s, a common intellectual and academic premise was that health care should be regulated as if it were a public utility. Health care is an essential service, the theory went, just as are electricity, gas, phones and water.

Regulating health care as an essential service would assure that it would be rationally distributed and adequately funded. It was understood then as it is now that essential services are regulated because capital costs are so high that competition often does not inspire the private sector to provide service in what may be unprofitable areas.

That's why we have phones in the far reaches of rural Oklahoma. As part of an exclusive franchise, with its assurance of freedom from competitive pressures and guarantee of return on capital expenditures, the phone company must provide services or service in places that would not normally be economically viable.

While the "health care as a utility" theory served in the '70s as the basis for an interesting intellectual exercise, it never assumed real importance beyond that. The country was in the midst of an expanding health care system that supplied necessary health care to citizens and necessary capital to health care providers, so there was no need to theorize about other models. After all, if it ain't broke, why talk about fixing it?

In the past 20-plus years, though, we've discovered the system is broken in some significant ways. Gaps have appeared in our health care system, most notably and unfortunately in the huge number of people not covered by health insurance. We've found that the competitive model, rather than reducing costs as it does in the rest of the business world, has increased costs of health care.

Consumers of health care, because they are often not the purchasers of that care, are protected from the economic consequences of their decisions. Providers of care have been given incentives to do as much as possible for patients while at the same time given little or no incentive to control costs.

There is, of course, competition. In fact, there is intense competition among individual hospitals and physician to physician. …

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