Hospital fees are the wrong answer

The revelation that Colorado Governor Ritter is conspiring with the Colorado Hospital Association to levy fees on hospitals to fulfill his political campaign promise to deal with the uninsured is a massively badidea. It falls short on three points.

First, there is no proof that hospitals have excess profits. Such fees would be internally cost shifted to patients and represent a hidden and covert tax. Medicare and Medicaid reimbursements are fixed and insurance companies negotiate discounts. That means only the sick, self-pay patient, who is already billed 27% more than the average would bear the brunt. It's regressive. We are trying to reduce cost shifting, not increase it.

Second, any extraction of additional monies so as to channel it back to pay for the costs of care of the uninsured is inflationary. Health care hyper-inflation is directly related to the steroidal injections of financial subsidies for various "needy" groups. It has distorted and destroyed any semblance of a marketplace in health care.

Finally, either mandates forcing people to buy health insurance or tax-based subsidies avoids the real need in health care reform. We need to re-institute disciplining forces, be-it competition or regulation, take your pick, to reverse the seemingly never-ending upward trend of health care inflation. In a time of recession we need the health care system to become more productive and efficient. Their costs need to decline, not superficially inflate.

The political establishment and the trade association lobby, continually obfuscate and avoid the real need in health care. There is no magic bullet. It is old fashioned efficiency improvement and quality. Maybe we should be consulting Toyota on health care.