Nothing Dysfunctional About US Healthcare – Period

Sen. Bernie Sanders took to the Senate floor last week to proclaim that the American people are deeply dissatisfied with the healthcare system. Citing a new Associated Press-NORC Center for Public Affairs Research poll, the Vermont socialist lamented that "just 12% of the American people believe that health care in general is handled very well or extremely well in the United States."

Unsurprisingly, he then segued to his longstanding call for abolishing private health insurance and forcing all Americans into a government-run health plan he calls Medicare for All. His latest legislative bid for bringing that about has languished in the Senate since he introduced it in May.

But are Americans truly unhappy with the current system? Perhaps in the abstract. When asked what they think of their own coverage, though, the vast majority of patients are quite pleased.

That's the chief finding of a new survey conducted by polling firm Echelon Insights for the organization I lead, the Pacific Research Institute. Nearly 9 in 10 likely voters are happy with their current health insurance. And 7 in 10 would rate their coverage as either "good" or "very good."

High satisfaction rates were the norm for nearly every category of respondent — which included those over 50, under 50, employed Americans, and the retired. Even 75% of unemployed respondents reported being satisfied with their coverage, compared to just 7% who were dissatisfied.

It's hard to see these figures and conclude that the current healthcare system is an "international embarrassment," as Sen. Sanders called it during his diatribe last week. Nor does it justify the kind of sweeping overhaul that Sanders and his supporters would inflict on the nation if given the chance.

Of course, the U.S. health insurance system isn't perfect. Among the minority of Americans who are unsatisfied with their coverage, according to our poll, the most common complaints are that premiums, deductibles and copays are too high, and that access to specialists is too limited.

Many of these problems can be traced to the fact that most health plans no longer function as insurance, in the traditional sense. An insurance policy is supposed to help individuals manage risk by shielding them from catastrophic costs in the event of an emergency — be it a fender-bender in the case of car insurance or a fire in the case of homeowners' insurance.

But health insurance today is more a system of pre-paid medical care. Monthly premiums are effectively upfront payments for basic treatments and services. Patients have little to no incentive to seek out the lowest-cost or best-value provider. And they have little incentive to moderate their consumption of basic care. After all, their insurer is picking up the bill.

Insurers respond to this series of incentives with steadily increasing premiums, higher deductibles, co-pays, restrictions on which providers a patient can see, and other out-of-pocket costs.

This interplay defeats the purpose of insurance. People pay significant sums out of pocket for coverage — and then aren't adequately protected from the financial risks associated with a medical emergency or catastrophe.

The most reasonable response to these inefficiencies isn't to replace insurance companies with a different third-party payer — that is, the government. It's to put more control in the hands of patients.

To that end, America would do well to make health coverage resemble traditional insurance.

Under this model, health plans might come with high deductibles but much lower premiums. Patients would be responsible for more of their routine health expenses and would be able to save for those expenses with a tax-advantaged health savings account instead of using that money to cover sky-high premiums.

By putting patients in charge of how their healthcare dollars are spent, this arrangement would introduce the kinds of market dynamics that drive down costs and improve quality.

More importantly, such a patient-centered approach to health insurance wouldn't throw away a system that, for the vast majority of the country, continues to work well.