Friday, August 14, 2009
The Coming Health Care Titanic
By Justin Williams
Trade offs are a part of every economic decision whether someone is going to the grocery store or deciding on health care treatments. And in a previous article called “The ‘Invisible Hand’… or the Hand of Death?,” we looked at how the lack of a trade-off mechanism in the past caused health care costs to soar. Now it’s time to seriously consider what will happen when the decision is taken away from patient and put in the hands of an already heavily debt-burdened, bankrupt government.
In a market, the private ownership of the medicine, tests, and services is supposed to allow exchange and trade on the basis of supply and demand. Now, with the current Obama Administration to eliminate private ownership as the means of production, the patients will simply have no choice but to be entirely subservient to a rationing or “control” board that places government demands above personal needs.
Economically, there is no other way to organize the system then through rationing when the mechanism of prices is abolished altogether. Even leftist Eugene Robinson at the Washington Post correctly writes “It is not illogical for skeptics to suspect that if millions of people are going to be newly covered by health insurances, either costs are going to skyrocket or services are going to be curtailed.”
In most government programs, the American taxpayer is unlucky enough to get both. Americans have already seen with the lack of a price system that costs have skyrocketed in the medical community, just as they have in the postal service, AMTRAK, the education system and every other arena where the government hegemony has wreaked havoc. Now, instead of allowing a fair price system, the Obama Administration plans on curtailing services.
Barack Obama himself inadvertently revealed the first signs of curtailing services when he said, “Right now, doctors a lot of times are forced to make decisions based on the fee payment schedule that’s out there. … The doctor may look at the reimbursement system and say to himself, ‘You know what? I make a lot more money if I take this kid’s tonsils out.’” The solution to this would be to engage a price system, putting supply and demand in the patients’ hands. Instead, the Obama Administration has chose to let a government bureaucrat decide whether or not you should have your tonsils taken out.
So the government is going to have to make trade offs on limiting critical medical services to the population as a whole. But somehow Mr. Robinson, along with many other liberals does not see how this reform could ever possibly create “death panels.”
It’s simple. The American health care system will be more like the Titanic than an unhampered private system with a healthy price mechanism. American patients will have to line up: women and children first, arranged youngest to oldest; the elderly last – if at all.
This government is already sinking fast into debt and running out of ways to raise funds. Health care reform will only accelerate this further. But, yet, increased government spending with reduced quality is the government’s only “solution” to today’s health care problems.
While the ship sinks and the people line up in a deadly queue, the one thing that truly distinguishes the Titanic from the health care debate will become clear: on the Titanic, the captain went down with the ship. It is doubtful that you will see Barack Obama standing in the back of any line -- because, after all, the politicians in Washington have their own non-government health-care program protecting them from the “public option.” So much for all men being created equal.
Medicare For All Isn't The Answer
My company ran a hospital in London. We don't want to go the government route.... A single-payer system may appear attractive to some. But as someone with more than 30 years of experience running a leading hospital company with international operations, I have firsthand knowledge of the hidden costs.
Medicare reimbursements to hospitals fail to cover the actual cost of providing services. The Medicare Payment Advisory Commission (MedPAC), an independent congressional advisory agency, says hospitals received only 94.1 cents for every dollar they spent treating Medicare patients in 2007. MedPAC projects that number to decline to 93.1 cents per dollar spent in 2009, for an operating shortfall of 7%. Medicare works because hospitals subsidize the care they provide with revenue received from patients who have commercial insurance. Without that revenue, hospitals could not afford to care for those covered by Medicare. In effect, everyone with insurance is subsidizing the Medicare shortfall, which is growing larger every year.
If hospitals had to rely solely on Medicare reimbursements for operating revenue, as would occur under a single-payer system, many hospitals would be forced to eliminate services, cut investments in advanced medical technology, reduce the number of nurses and other employees, and provide less care for the patients they serve. And with the government in control, Americans eventually will see rationing, the denial of high-priced drugs and sophisticated procedures, and long waits for care.
My company's experience with health care in the United Kingdom illustrates the point. In the 1980s, we opened The London Independent Hospital to serve the private medical market in the U.K. The hospital had not been open long when representatives of a 1,000-bed government-run hospital located a short distance away approached us to borrow high-tech equipment and instruments. Because people were ill and needed procedures the government hospital could not provide, we provided that hospital with the help it needed. But that experience convinced me that under a single-payer system hospitals do not receive the money required to purchase advanced technology or provide quality care.
Advocates of a single-payer system say that hospitals would survive if they learned to operate more efficiently. While we are always looking for ways to improve efficiency, the economic conditions of the past few years have already forced most institutions to reduce expenses and increase efficiency as much as possible.
The reality is that Americans have come to expect the best health care in the world, and to provide that, hospitals must continue to invest in advanced medical technology, salaries for well-trained nurses and technicians, and state-of-the-art facilities. If hospitals were required to operate solely on revenue from a single-payer system, they could no longer afford to provide the care that Americans deserve.
Megan McArdle on government health-care rationing
Robert Wright notes that "we already ration health care; we just let the market do the rationing." This is a true point made by the proponents of health care reform. But I'm not sure why it's supposed to be so interesting. You could make this statement about any good:
"We already ration food; we just let the market do the rationing."
"We already ration gasoline; we just let the market do the rationing."
"We already ration cigarettes; we just let the market do the rationing."
And indeed, this was an argument that was made in favor of socialism. (No, okay, I'm not calling you socialists!) And yet, most of us realize that there are huge differences between price rationing and government rationing, and that the latter is usually much worse for everyone. This is one of the things that most puzzles me about the health care debate: statements that would strike almost anyone as stupid in the context of any other good suddenly become dazzling insights when they're applied to hip replacements and otitis media.
The rationing is, first of all, simply worse on a practical level: goods rationed by fiat rather than price have a tendency to disappear, decline in quality, etc. Government tends to prefer queues to prices. This makes most people worse off, since their time is worth much more than the price they would pay for the good. Providers of fiat-rationed goods have little incentive to innovate, or even produce adequate supplies.
Also, even if you are prepared to go without other things (e.g. sell your house) in order to get the best care, you just cannot under government-controlled medicine. THEY say what you can have, and it is rarely the best -- as we have repeatedly seen in Britain and Canada. See SOCIALIZED MEDICINE for more articles in the debate plus several reports about the ongoing British disaster -- JR
Federal spending tops $3 trillion: "Federal spending surpassed the $3 trillion mark for the first time in history during July, and the record-shattering fiscal year still has two months to go. The U.S. government spent more money last month - $332 billion - than in any other month in history, the Treasury Department reported Wednesday. Outlays were more than double tax receipts in July, generating a monthly deficit of $181 billion. For the first 10 months of fiscal 2009, which ends Sept. 30, the budget deficit totaled $1.27 trillion, nearly three times last year's record annual deficit of $459 billion."
Town hall face-offs erode health support: "Public support for the Obama administration's sweeping government health care reforms is declining as opponents continue to pack congressional town-hall meetings with some analysts suggesting the president may have to settle for more modest legislation. Public-policy analysts say that nearly two weeks of intense and often angry town-hall debate back home during August recess has thrown the White House on the defensive and turned its hopes for a full-blown overhaul of the health care system into a steeper climb. "Publicity attached to town halls has kept the administration from framing the debate to its advantage. They have their work cut out for the rest of the month," said Thomas E. Mann, senior analyst in governance studies at the liberal Brookings Institution"
Maryland health forum draws overflow crowd: "An overflow crowd of about 450 packed a community college auditorium on Wednesday afternoon to hear Sen. Benjamin L. Cardin discuss health care reform, while more than that were turned away at the door. The meeting, the Maryland Democrat's second town-hall event on the contentious subject this week, also drew pockets of protesters that lined the streets of a busy intersection two miles from the Hagerstown Community College campus so as to be visible to approaching vehicle traffic. The groups shouted and held signs, including some that portrayed President Obama alongside Nazi imagery. About 200 people inside the auditorium stood in lines to ask the senator questions from behind two microphones placed in the aisles after Mr. Cardin delivered a brief opening statement. Those opposing Mr. Obama's plans to reform health care clearly outnumbered those in support of changing the system. While the roughly 20 questioners who queried the senator were cordial, the loud -- and at times confrontational -- crowd often interrupted his answers with boos and jeers"
Obama still all hot air: "Political candidates are notorious for promising voters the moon to get elected. But once in office, we expect our elected officials to stop campaigning and start doing the business of the people, governing. This is especially true for the leader of the Free World, who is responsible for a $3.6 trillion budget, commanding the world's most powerful military and promoting the welfare of the American people. The presidential election is over. President Obama, however, never ended his campaign. His administration's domestic and foreign initiatives have not been the detailed and carefully crafted policy proposals needed to govern. We continue to see and hear campaign speeches offering only vague promises, slogans and attacks on his predecessor, but no plans on how to execute his proposals.
'A Recovery Only a Statistician Can Love': "The pile of economic data indicating that the worst of the recession is over just keeps growing. In the past few weeks, the government has reported that businesses last month shed the smallest number of jobs in nearly a year. The savings rate, after rising rapidly, held steady at levels not seen in at least five years. And from April to June, productivity surged to a six-year high. But the same data also explain why any recovery isn't going to feel like one anytime soon for millions of Americans. Its existence will be confirmed by statistics, but, over at least the next year, the benefits are unlikely to materialize in the form of higher wages or tax receipts or more jobs."
Motores del Gubierno: GM's $1.2B investment in Mexico: "General Motors Co. plans to invest $1.2 billion in Mexico this year to 2011, the nation’s Economy Ministry said today in an e-mailed statement." There are no more specifics yet, and I haven't gotten my hands on the emailed statement, but this certainly could be your tax dollars are creating jobs south of the border while GM lays off American workers. This gets us back to the problem of government ownership of companies. GM needs to seek profit, and offshoring U.S. jobs is a good way to cut costs. But this is taxpayer-subsidized offshoring. There are no good answers here, as with GM's lobbying and public relations spending".
Stimulus cash for weatherization still unspent: “Jackie Harpst expected a busy summer at her nonprofit housing agency, as work crews backed by Nebraska’s share of $5 billion in federal stimulus money headed out to seal windows and spread insulation. Months after she thought work would begin, not a single window has been caulked. And she’s still not sure if her team will be able to get to work adding insulation before the summer heat passes — or even before the winter’s chill sets in.”
If Feds add “cookies” will privacy crumble?: “This isn’t a cookie-cutter administration. The Office of Management and Budget is considering reversing a nine-year ban on using ‘cookies’ to track users’ preferences and interests on federal Web sites. The shift in policy is being billed as a way for government to enter the 21st century and for federal agencies to use the same technology utilized on news sites, retail sites and social media networks. … But some privacy advocates say changing the policy for federal Web sites is troubling. If you check out the FBI’s Most Wanted List, they say, the government would know. If you want information from the CDC about pregnancy or AIDS, the government would know. Big Brother could quite literally be watching you.”
It can happen here: "“England’s Daily Express reported on August 4 that ‘thousands of the worst families in England are to be put in ’sin bins’ in a bid to change their bad behavior.’ Ed Balls, the Children’s Secretary, has announced a 400 million pound plan to put Closed Circuit Television (CCTV) cameras in 20,000 homes in Britain, says the Express, ‘to ensure that children attend school, go to bed on time and eat proper meals.’ This ’sin bin’ program already operates in many parts of the country, and about 2,000 families are presently under observation by their betters in the local bureaucracy. But Balls wants the program to be universal.”
The worst is ahead of us: "“The news that the jobless rate in this country has gone from 9.5 percent in June to 9.4 percent last month has led President Obama to declare that his policies have ’saved the U.S. economy from catastrophe’ and have led to another rally in the stock market. While I wish I could agree with the President — I really do wish that — I cannot do so, and I must say, ‘Not so fast, Mr. Obama.’ In fact, not only have Obama’s policies made this downturn worse, the policies have not yet begun to run their full course, and that means we have further to go before we hit bottom.”
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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)
Posted by JR at 12:37 AM