Monday, February 8, 2010

Government as Savior

I don't agree with Doug Wilson on everything theologically, but I do really enjoy his writing style. Also, he often has very good insights into modern behavior.
"Every real problem identified in the movie -- for there were some substantial ones, along with the pretend ones -- was a problem created by overweening government interference in the market. And a number of times, this government interference was created by the hue and cry of reformers from a previous generation, who were demanding that those in authority 'do something'. And is this not the very definition of the modern reformer -- someone who identifies a problem and wants 'something done' -- whether or not it makes things better or worse?"
Here, Wilson is talking about food (this movie was talking about the evils of non-organic food). But I see the same thing in healthcare.

I heard a really interesting piece on NPR. They were talking about the original government intrusion into healthcare - Medicare in the 60's.

The government had a problem. Doctors were worried about having to provide care at a fixed price set by the government. The government was worried that not all doctors would accept Medicare patients (leading to confusion and possibly a "have/have not", where the poor would not have access to all doctors).

The solution? Allow doctors to charge whatever they like to Medicare.

Of course, doctors accepted this. Of course, Congress realized pretty quickly this solution was not sustainable.

The real irony (mentioned in the piece) was that prior to Medicare doctors had provided care to the elderly poor for free. Now, they could charge for these services. And - "anything you subsidize, you get more of".

This part is not as well researched, but go with the flow...
  1. Congress steps in to provide healthcare (for the elderly)
  2. Doctors charge whatever they like
  3. Costs are out of control
  4. Congress responds by trying to set prices (based on the market)
  5. Doctors respond with more tests (they are paid per test)
  6. Congress creates regulations regarding what tests can be made
  7. Doctors raise prices for everyone (prices are based on the market, which is what everyone else is paying)
  8. Insurance companies barter for reduced ("bargain club") rates, so everyone doesn't see the full price (or at least, those with insurance don't)
  9. Bureaucracies are set up to enforce regulations (wasted manpower, salaries in the system)
  10. Doctors hire lawyers and clerks to ensure they are complying (more waste)
  11. Waste results in costs going up
  12. Insurance companies raise prices to cover their overhead (bargaining, paying) - more waste, more costs going up
  13. "Healthcare crisis" declared - government called in to help (see #1)
I predict more bureaucracy, more private sector clerks, more insurance company employees - more waste. And less healthcare.

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