Once you pop, you can't stop

As the New York Times reports, Democrats took a blow yesterday when their proposal to make permanent a previously temporary "fix" in Medicare doctor fees that had to be reapproved each year didn't make it through the Senate. Doctor payments are supposed to be cut by a certain percentage each year, and every year Congress, realizing that doctors will shun Medicare patients if the cuts are instituted, steps in to nullify the fee cut, an action known as the "doc fix." If the "doc fix" isn't implemented this year, fees are due to be cut by more than 20 percent in 2010 -- which would surely cause many doctors to stop accepting Medicare.

The "doc fix" shows one reason government entitlements are so pernicious: They're nearly impossible to get rid of, or even to reduce, once they're around. Doctors are used to charging X amount, not X minus 20 percent. So they scream when the cuts loom, and their patients scream too, which makes Congress edgy about losing the votes of doctors and seniors, so the rates stay. That means a bigger deficit for you and me to pay off, but Congress pulls a Scarlett O'Hara ("I'll think about that tomorrow") every time because they're only interested in saving their own hides in the short term.

What do you think is going to happen if a health insurance mandate passes? Costs are going to go up, not down, and Congress will talk about, say, cutting services to make premiums go down. Except that whatever pressure group wants the particular services that are going to be cut will squeal, forcing Congress to decide whether they want to cut costs at the expense of cutting votes. And that's how status quo stays status quo -- even when it's completely untenable.

Now, I'm not saying that Medicare payments to doctors are too high; from what I hear, fees often don't cover the full cost of treatment, forcing doctors to shift costs onto privately insured patients. What I am saying is that the free market needs to find the solution, because the government obviously can't. In fact, a free market would likely find multiple solutions: bare-bones clinics or treatment by supervised medical students for those who can't or won't pay the market rate for middle-of-the-road care; top-of-the-line facilities with the best equipment and the most prestigious doctors for those willing to pay top dollar; and everything in between. But the status quo -- paying the same fee to a doctor whether he's a 20-year veteran with a degree from Harvard or someone who's just finished his residency, whether he spends five minutes doing a patient consultation or two hours answering detailed questions -- is certainly not going to encourage the development of a range of services that suit customers' varying needs.

So, not only is the status quo highly limiting, but as we've seen, it has inertia on its side. That's why we need to argue for a free market instead of health care "reform" that would create an even worse status quo.