Health task force asked wrong question

By Joseph Q. Jarvis
Published: Monday, Dec. 18, 2006 9:39 a.m. MST
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I admire Sen. Michael Waddoups. His courage and leadership shook the health-care establishment two years ago with the formation of a legislative task force to investigate whether IHC has too much market dominance in Utah. As he noted recently, the task force could not decide how to answer that question, despite spending a $300,000 budget.

In the aftermath of the task-force failure, it is time to acknowledge that they were working on the wrong question. If, as the task force economic consultant reported, Utah is the beneficiary of a remarkably vigorous health market competition that provides good quality care at a reasonable price, why does Utah have higher than average rates of uninsurance? Why were 420,000 Utahns, mostly small-business employees and their dependents, without health insurance in 2005? Why are Utah's ethnic minority Medicare beneficiaries suffering health-care disparity at twice the national rate? And how can competition between only two health systems be considered "vigorous"?

The task force was doomed to failure because it began with the premise that "competition is essential to fostering a health-care system where quality improves, innovation is encouraged and prices are modified as a result of normal market forces." Health care is not a commodity that can be efficiently distributed using market forces. Unlike market commodities, demand for health care does not increase with reducing price. People do not buy appendectomies because they are on sale this week. Nor does a high price for chemotherapy induce the leukemia patient to put off that purchase. Competing ambulances screaming to the scene of an accident are not the sign of a vigorously functioning health-care system. Hospitals competing to provide intensive services will generally increase the price and decrease the quality of health care. Nearly two-thirds of the $2 trillion Americans will spend on health care this year is tax money. What market is based on $1.2 trillion in taxes?

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The task force would have better served Utah by investigating how to spend our health-care revenues, mostly tax monies, more efficiently. The fundamental flaws of our health system are high overhead, high prices and poor risk management. We have the means to sustainably finance necessary medical care for every Utah citizen. I hope Sen. Waddoups leads the Legislature back into health-care discussions, this time with a different premise and better questions.

Joseph Q. Jarvis is chairman of the board of trustees for Utah Health Policy Project.

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