Managed Health Care
from the spend-and-bloat dept.
Federal government got involved in health care in the 1970's. I think it's fine to call it "managed care" because the government is involved. The government involvement is like the "Midas Touch" effect, only instead of making it turn to gold with one touch, it's rather the opposite effect. Prices always get jacked up when the government meddles in the free market.
"I don't think government can improve the economy. If government intervention can improve economic performance and get us out of recession, is it not stupid to wait for recession in order to capture the benefits of government economic policies? But then, if government intervention can improve economic performance and increase the rate of growth, how come socialist/welfare states consistently perform worse than free-market economies?"
- Steve Pejovich
If governments can't improve an economy, why do we think they could improve a sector of an economy like the health industry? Yet meddling usually starts in order to help. There's no doubt in my mind that the initial health care involvement was for altruistic reasons. But instead, the doctor-patient relationship has been destroyed and costs are going up as a result. Big business saw an opportunity to expand pricing because when the government is willing to aid people, the business is compelled to charge more.
In the 1950's, a dental crown would cost $40. If we convert 1950's dollars to 2007, the dental crown should cost around $340 if all we do is account for the change in price relative to inflation. So inflation does not cover the increase because today crowns are between $1,100 and $2,750. But the practice and technology has improved, so the relative price should have gone down instead.
It went up because of managed care. Now democrats are talking about moving to total socialized medicine. They're talking about a "single payment system" which is just a form of socialism.
Mind you, I do not blame the caregivers. Try asking your dentist for a discount because you want to pay cash, therefore eliminating paper work and reimbursement time. Likely, you'll be told that your dentist’s agreement with the insurance company does not allow him or her to reduce the billing rate for cash payments.
Who has a right to health-care? Nobody. It is nobody's right to take property from a person, even if the end goal is to give the property to a person in need. The poor should be taken care of in a progression, like as follows:
- The first line of defense is for a poor person to take care of his or her own situation. Low taxes and low inflation would go a long way towards accomplishing this. But it is not always possible for a poor person to take care of his or her own situation, even if taxes and inflation are in check.
- The second line of defense against poverty is family and friends, again not always possible.
- Then faith-based organizations and charities should step in.
- Then local/municipal governments.
Beyond that, we're talking about socialism. It doesn't make sense for someone in the state of California to be forced by government strong-arm thugs to feed someone in Florida. If people in one state feel compelled to send aid to another state, let them do so under their own volition. But extracting it against their will isn't the answer.
It is universally known that Americans are very generous. Even when some of us are taxed at high percentages of our income, many of us still find a way to give more to charitable causes. Imagine how generous we could be if we weren't taxed so much.
In my family, the government takes between 30% and 50%, depending on how you calculate it (if you count income tax + sales tax + licensing fees + unfunded mandates + etc). This makes it difficult for us when unforeseen issues come up. For example, my family needs to buy certain medical supplies on an ongoing basis. The government has stepped in and covered these supplies because they are a qualified financial burden. I would much rather buy them myself, but they are available and my tax dollars certainly pay for them whether I use them or not.
Yet who would argue against the idea that it is ultimately cheaper for me to keep my money and buy the supplies myself? Of course it would be cheaper. There's overhead associated with these supplies that we should not need to contend with. They are delivered by UPS, for example. There is also government bloat associated with these supplies. Not only that, but the manufacturer probably doesn't give the government a special deal. It's probably quite the opposite. The manufacturer probably gets top dollar because the government is their client. I could be wrong about that, but it's entirely possible.
Here's an example. Would you accept a managed system for soft drink consumption? Let's imagine that the federal government did a study and found that on average, people pay about $40 each month on soft drinks. So they impose a new tax to get the $40 from everyone on a monthly basis. They then buy all of the soft drinks from the manufacturers and distribute them to everyone.
With the above scenario, would everyone get what they want? No, there are lots of people who don't want any soft drinks. Would there be much choice? Perhaps at first, but the choice would not be as diverse as time progresses because new soft drinks would find it difficult to enter the new regulated market.
The most important thing to ask about this scenario is, would the manufacturers be able to set their own prices? Unlikely. Competativeness becomes less of a concern when there's only one customer. And if the customer is a bloated burocracy, Department of Soft Drinks and Milkshakes (DSM) ... need I continue?
Posted: Friday - March 14, 2008 at 10:22 AM |