Trendspotter: Back to the Barter System?

Sue Lowden, a Nevada Republican running for the U.S. Senate, recently made headlines by proposing that the uninsured barter for healthcare with goods and services. The media jumped all over her for suggesting that maybe we should bring back the good old days when people paid doctors with chickens or house painting.

But in fact, barter is making a comeback throughout the country because people have less money to spend on everything, including healthcare. Some doctors work out deals with their patients for fish, car repairs, or the printing of brochures. Other physicians have joined barter exchanges that give them credits for goods and services in lieu of cash when they treat another exchange member.

Nevertheless, there are a couple of problems with Lowden’s proposal. First, as one physician blogger points out, she’s not suggesting that people barter for anything except healthcare. Why not?

I’d surmise that it’s because she’s the frontrunner in the Republican race to oust Sen. Majority Harry Reid, who staked his political career on passing healthcare reform. In Lowden’s position, it’s better politics to suggest that people barter for healthcare than to support a reform law that guarantees that people have insurance.

But, setting aside the humorous potential of collecting copays in chickens or goats, physicians are hurting in this recession, and they need more paying patients. To single them out for this treatment is unfair.

Another problem is that chickens and house painting do not have a fixed value. Consequently, the parties to the transaction must haggle over how much of a doctor’s services the patient’s non-monetary offer is worth. This bargaining process would obviously be impossible in an emergency situation.

Even if a patient needed a nonemergent procedure, it would be difficult for the patient and his or her doctor to agree on the value of goods or services to be provided in lieu of financial payments. Would a physician say, “I’m sorry, but the car repair you’re offering me just isn’t enough to cover your back operation, so you’ll have to go elsewhere?” What if the physician accepted the car repair in lieu of payment, but the patient was not a good mechanic and did a lousy job?

Clearly, cash transactions are a big advance over the barter system. Even most opponents of the reform law would concede that. Unfortunately, however, few people can afford to pay cash for healthcare if they have serious medical problems. That’s why insurance exists, but more and more people are now losing their coverage and are unable to buy new policies. So the government is going to try to make sure they can afford insurance and that insurers will have to sell it to them. That seems like a better deal for doctors than being paid with chickens.

A growing number of physicians have decided not to take insurance. They’re fed up with the bureaucracy and the paperwork, and they figure that they can earn more by catering to a smaller patient population that’s willing to pay out of pocket. But the last time I looked, most of these practices were still requiring that their patients pay in cash.

Few physicians in practice today can remember a time when some patients paid them with chickens. But, in fact, insurance 50 years ago tended to be “major medical.” Until fairly recent times, insurance didn’t cover most of the bill. Now it’s starting to slide back to where it was half a century ago. Is that progress? Sue Lowden thinks so. But I doubt that most physicians would agree.

The plain fact is that we can’t turn the clock back - nor would we want to. The only reason why barter is growing today is that we’re going through a miserable recession, and up to a fifth of the adult population is without full-time work. When better times come, more patients will have money for healthcare. And, if the Patient Protection and Affordable Care Act is properly implemented, most of them will have insurance, as well.