Massachusetts meddles in health care more than just about any other state government. And Massachusetts has the highest health insurance premiums in the country.
Coincidence? I think not.
Friday, August 28, 2009
Thursday, August 27, 2009
The problem with Potter
The New York Times, in an op-ed column, describes how former insurance executive Wendell Potter is now championing universal health care, a "reform" he worked hard to oppose while he was employed by the industry. Potter feels remorse for some of the practices his former industry uses to cut costs, and he wants universal health care to solve these problems.
Potter notes the following unsavory, though legal, tactics used by insurance companies:
The problem is that it's government intervention that has bought us these objectionable tactics in the first place. Were it not for the massive tax incentive for employers to buy insurance coverage that encompasses routine expenses -- expenses that, as I've argued in the past, it doesn't make sense to insure against -- individuals, and not their insurers, would be deciding whether an expensive procedure or drug is worth the cost. Expenses high enough to cause a catastrophic policy to kick in would be rare -- rare enough that the premiums paid in by most people over their lifetimes would be able to cover those few people who experience an unforeseen and truly catastrophic health issue. Employers wouldn't be the ones who decide what kind of insurance gets purchased, so small businesses wouldn't be forced to choose between a sick employee and the rest of its staff.
And rescission? Let's face it: Some businessmen do look to make profits not just by trading value for value, but also by screwing over their customers in a technically legal way. But liberals act like all businessmen do this -- and not only is that not true, but a free market provides a strong disincentive to do it. In our current far-from-free market, there is little individual choice between insurance plans -- so consumers can't vote with their feet. But in a free market, a company that practiced rescission on a regular basis would not last long: People would hear about it, just as they're hearing about it now. And in a free market, when they hear about it, they can decide they don't want the same thing to happen to them -- and take their money to an insurance company that has a better reputation for treating its customers well.
Potter is certainly right that our current system has serious problems. But he's dead wrong about how to fix them. Further government intervention in health care will only create higher costs, which will lead to rationing -- hardly, I think, what he means when he says that health care should be universal. It was government intervention that caused these problems in the first place -- and only the free market can solve them.
Potter notes the following unsavory, though legal, tactics used by insurance companies:
- Denying expensive procedures
- Raising the premiums for small businesses if an employee needs expensive treatment, thus forcing the business to drop coverage for all of its employees or to seek coverage elsewhere (but now with one employee who has a preexisting condition)
- Perhaps the most inflammatory practice, rescission: When a covered individual develops an expensive-to-treat illness, the company goes back through its records to see if it can find a form that wasn't filled out correctly or other reason to declare that person's coverage invalid retroactively
The problem is that it's government intervention that has bought us these objectionable tactics in the first place. Were it not for the massive tax incentive for employers to buy insurance coverage that encompasses routine expenses -- expenses that, as I've argued in the past, it doesn't make sense to insure against -- individuals, and not their insurers, would be deciding whether an expensive procedure or drug is worth the cost. Expenses high enough to cause a catastrophic policy to kick in would be rare -- rare enough that the premiums paid in by most people over their lifetimes would be able to cover those few people who experience an unforeseen and truly catastrophic health issue. Employers wouldn't be the ones who decide what kind of insurance gets purchased, so small businesses wouldn't be forced to choose between a sick employee and the rest of its staff.
And rescission? Let's face it: Some businessmen do look to make profits not just by trading value for value, but also by screwing over their customers in a technically legal way. But liberals act like all businessmen do this -- and not only is that not true, but a free market provides a strong disincentive to do it. In our current far-from-free market, there is little individual choice between insurance plans -- so consumers can't vote with their feet. But in a free market, a company that practiced rescission on a regular basis would not last long: People would hear about it, just as they're hearing about it now. And in a free market, when they hear about it, they can decide they don't want the same thing to happen to them -- and take their money to an insurance company that has a better reputation for treating its customers well.
Potter is certainly right that our current system has serious problems. But he's dead wrong about how to fix them. Further government intervention in health care will only create higher costs, which will lead to rationing -- hardly, I think, what he means when he says that health care should be universal. It was government intervention that caused these problems in the first place -- and only the free market can solve them.
Wednesday, August 26, 2009
Another lesson on making deals with the devil
Even in a free market, sometimes there's buyer's remorse. That Louis Vuitton handbag that cost two mortgage payments doesn't seem nearly so attractive when the credit card bill arrives. Right after you buy a hamburger, you walk past a shop selling macaroni and cheese and wish you'd ordered that instead. You love your new cashmere sweater, but you wish you could have bought it for $50 less.
In a free market, there are multiple possibilities with buyer's remorse. If the store's policy allows it, you can return the LV bag for a refund. If not, you can get a store credit or sell the bag on Ebay. If you really want that macaroni and cheese, you can put the hamburger in the refrigerator for tomorrow and buy the mac.
What you cannot do is go back to the store, point a gun at the owner, tell him he overcharged you for your sweater, and demand $50 back. At least, you and I can't -- but the government can, and that's just what representative Henry Waxman is trying to do to the pharmaceutical industry.
Waxman is angry because, when the Medicare prescription drug benefit was expanded in 2006, some patients who had previously been covered under Medicaid suddenly acquired coverage under Medicare. Medicaid pays less for drugs than Medicare. Waxman claims that the government paid Medicare rates for these dually covered patients' drugs when it should have been paying the lower Medicaid rates it had been paying all along. All this, to the tune of $3.7 billion, according to Waxman -- which he now wants pharma companies to pay back.
See, Big Pharma? Companies that supported the bill back when they thought it would mean lots of extra patients paying for their products with government dollars are now facing the fact that their new customer has a gun, and can use that gun to retroactively change the terms of the deal. Business can't operate under such conditions -- not that Uncle Sam cares.
By championing yet another breach of the free market three years ago, Big Pharma has merely hog-tied itself. This is what happens when you deal with the devil!
In a free market, there are multiple possibilities with buyer's remorse. If the store's policy allows it, you can return the LV bag for a refund. If not, you can get a store credit or sell the bag on Ebay. If you really want that macaroni and cheese, you can put the hamburger in the refrigerator for tomorrow and buy the mac.
What you cannot do is go back to the store, point a gun at the owner, tell him he overcharged you for your sweater, and demand $50 back. At least, you and I can't -- but the government can, and that's just what representative Henry Waxman is trying to do to the pharmaceutical industry.
Waxman is angry because, when the Medicare prescription drug benefit was expanded in 2006, some patients who had previously been covered under Medicaid suddenly acquired coverage under Medicare. Medicaid pays less for drugs than Medicare. Waxman claims that the government paid Medicare rates for these dually covered patients' drugs when it should have been paying the lower Medicaid rates it had been paying all along. All this, to the tune of $3.7 billion, according to Waxman -- which he now wants pharma companies to pay back.
See, Big Pharma? Companies that supported the bill back when they thought it would mean lots of extra patients paying for their products with government dollars are now facing the fact that their new customer has a gun, and can use that gun to retroactively change the terms of the deal. Business can't operate under such conditions -- not that Uncle Sam cares.
By championing yet another breach of the free market three years ago, Big Pharma has merely hog-tied itself. This is what happens when you deal with the devil!
Tuesday, August 25, 2009
See? We're not crazy.
With liberals trying to smear opponents of healthcare reform as "crazy" and "the angry mob," it's refreshing to read a news report -- from the New York Times, no less -- about the many Americans who cannot be called crazy by any stretch of the imagination, and who nonetheless have serious misgivings about the Democrats' healthcare push.
Bob Collier, a 62-year-old Georgia salesman quoted extensively in the article, questioned his representative at a town hall -- quietly but firmly. He fears rationing of care by the government, and aptly put it: “I think you’re going to have all the efficiency of the post office with the compassion of the I.R.S.” He fears that a government system will support the lazy and the irresponsible.
Both of those fears are entirely justified. In fact, what Democrats are pushing for indeed justifies an angry response -- but they are cleverly smearing anger as "craziness." That's why people like Mr. Collier are especially important -- because they show that our concerns cannot be dismissed so easily.
Bob Collier, a 62-year-old Georgia salesman quoted extensively in the article, questioned his representative at a town hall -- quietly but firmly. He fears rationing of care by the government, and aptly put it: “I think you’re going to have all the efficiency of the post office with the compassion of the I.R.S.” He fears that a government system will support the lazy and the irresponsible.
Both of those fears are entirely justified. In fact, what Democrats are pushing for indeed justifies an angry response -- but they are cleverly smearing anger as "craziness." That's why people like Mr. Collier are especially important -- because they show that our concerns cannot be dismissed so easily.
Monday, August 24, 2009
Remember those logic problems from when you were a kid?
You know, the ones that went like this:
People who come from Truthylvania only tell the truth. People who come from Falsaria only tell lies. Joe says, "I am from Truthylvania." Jim says, "Joe is lying." You know that one of them is from Truthylvania and one is from Falsaria. Which is which?
Yes, I know that you can't tell from the information I've given you. I'm simply reminded of such logic problems by President Obama's cries for an "honest" debate untainted by "willful misrepresentations and outright distortions."
Because, you see, people from Falsaria say they're from Truthylvania. Obama is one of the worst.
Let's examine "death panels," one of the biggest flashpoints in the healthcare "reform" discussion. Obama denies that any such panels would exist under a "reformed" system, that bureaucrats would not be deciding whether Grandma gets to live or die. All the liberals I know call anyone who talks about such panels "crazy."
But the truth is that there must be rationing under a government system. It has to happen! First, it has to happen because it is simply not possible to give everyone all the health care they want. Why isn't this patently obvious? There isn't enough money in the world to satiate unlimited demand of any commodity! Second, it has to happen because the government will inevitably impose more regulations and controls once it becomes involved (or, rather, more involved than it already is), and this will depress supply. A shortage is the inevitable result. So there has to be rationing, as even liberal Peter Singer has acknowledged. As Stephen Borque beautifully puts it, it is not a misnomer to call such rationing "death panels" -- what else would you call it when bureaucrats are making decisions about who gets health care and who does not? Maybe it won't be rationing of end-of-life care -- after all, the AARP is a powerful lobby indeed. But if it's not geriatric medicine, it will have to be something else, whether that something else is sophisticated medical imaging that could catch cancers early but is deemed too expensive by the government, a breakthrough drug that saves a life at fifty times the cost of a generic that can only delay death by a month or two, etc.
So that's just one example of how liberals are lying to us and calling it truth. Don't let liberal smears of "misrepresentation" and "fabrication" keep you from examining the facts and making your own evaluation. No matter how many times a liar says he's telling the truth and that everyone else is lying, he's still a liar -- and the facts will show whom you should believe.
People who come from Truthylvania only tell the truth. People who come from Falsaria only tell lies. Joe says, "I am from Truthylvania." Jim says, "Joe is lying." You know that one of them is from Truthylvania and one is from Falsaria. Which is which?
Yes, I know that you can't tell from the information I've given you. I'm simply reminded of such logic problems by President Obama's cries for an "honest" debate untainted by "willful misrepresentations and outright distortions."
Because, you see, people from Falsaria say they're from Truthylvania. Obama is one of the worst.
Let's examine "death panels," one of the biggest flashpoints in the healthcare "reform" discussion. Obama denies that any such panels would exist under a "reformed" system, that bureaucrats would not be deciding whether Grandma gets to live or die. All the liberals I know call anyone who talks about such panels "crazy."
But the truth is that there must be rationing under a government system. It has to happen! First, it has to happen because it is simply not possible to give everyone all the health care they want. Why isn't this patently obvious? There isn't enough money in the world to satiate unlimited demand of any commodity! Second, it has to happen because the government will inevitably impose more regulations and controls once it becomes involved (or, rather, more involved than it already is), and this will depress supply. A shortage is the inevitable result. So there has to be rationing, as even liberal Peter Singer has acknowledged. As Stephen Borque beautifully puts it, it is not a misnomer to call such rationing "death panels" -- what else would you call it when bureaucrats are making decisions about who gets health care and who does not? Maybe it won't be rationing of end-of-life care -- after all, the AARP is a powerful lobby indeed. But if it's not geriatric medicine, it will have to be something else, whether that something else is sophisticated medical imaging that could catch cancers early but is deemed too expensive by the government, a breakthrough drug that saves a life at fifty times the cost of a generic that can only delay death by a month or two, etc.
So that's just one example of how liberals are lying to us and calling it truth. Don't let liberal smears of "misrepresentation" and "fabrication" keep you from examining the facts and making your own evaluation. No matter how many times a liar says he's telling the truth and that everyone else is lying, he's still a liar -- and the facts will show whom you should believe.
Wednesday, August 19, 2009
What's missing from One Lesson
I finished Economics in One Lesson last night. It's justly called a classic; Hazlitt uses simple examples that don't need actual statistics to prove their point. In fact, statistics can show only correlation, not causal connection; Hazlitt, instead, shows why government intervention must lead to consequences beyond what the brains behind it intended (that is, if we give them credit for making honest mistakes rather than willfully proceeding with their plans in the knowledge that some pressure groups will be temporarily benefited at the expense of others).
However, I won't be using "Talk to me after you've read Economics in One Lesson" as ammunition when I argue with liberals about health care. Here's why.
The "one lesson" that Hazlitt teaches over and over again, through numerous examples in different contexts, from inflation to minimum wage laws to price fixing, is that all the consequences of a given intervention need to be considered. A government intervention is usually meant to benefit one group of people in the short term, but inevitably, such interventions have negative effects on other groups, and will look different over the long term than the short. So, to paraphrase one of his examples, if the government places a tariff on foreign-made sweaters, American sweater makers will temporarily benefit because they can stay in business despite not being as efficient (and therefore able to profitably charge a lower price) as their foreign competitors. But the butcher, the baker, and the candlestick maker will be worse off, because consumers who buy a sweater will have less money to spend on beef, cupcakes, and candles, to name just one bad consequence (there are many others).
Hazlitt is great at making this point, and showing that artificially propping up one industry or artificially increasing that industry's demand, necessarily hurts other industries. It's hard to argue with such simply presented cases as his -- at least, I think it is.
The problem is that, with most liberals I know, Hazlitt's argument wouldn't matter -- because it fails to make a moral case. "Yes," I can see friends of mine* saying, "it's true that getting the government into health care would cause an increased demand for health care providers and products. And that demand would lead to less consumption in other industries, because taxing the wealthy or making people who don't have insurance buy it would mean they have less to spend on other things. But how is that a bad thing? People need health care. They don't need diamonds or SUVs or steakhouse dinners. I don't see a problem with taking money from luxury industries to pay for necessities."
That's why the practical argument against government intervention in health care must be accompanied by a moral argument. Not only will further government intervention in health care not work, it is wrong on principle because health care is not a right. We need to have the courage to say that Grandma's brain cancer does not mean Paris Hilton has to give up one of her Balenciagas; the homeless man on the street does not have a right to the profits of the coffee shop around the corner to pay for his HIV medications; a child with spina bifida does not have the right to expensive treatments at the price of his next-door neighbor's not having a bicycle. It is perfectly all right for sympathetic people to help out in such situations through private charity -- but it is not the right of the poor and the sick to take from the healthy and wealthy.
Hazlitt's arguments are excellent, but they are not enough. We need, too, the ideas of Ayn Rand.
* Yes, I do have liberal friends -- lots of them -- but boy, does it drive me crazy talking politics with them!
However, I won't be using "Talk to me after you've read Economics in One Lesson" as ammunition when I argue with liberals about health care. Here's why.
The "one lesson" that Hazlitt teaches over and over again, through numerous examples in different contexts, from inflation to minimum wage laws to price fixing, is that all the consequences of a given intervention need to be considered. A government intervention is usually meant to benefit one group of people in the short term, but inevitably, such interventions have negative effects on other groups, and will look different over the long term than the short. So, to paraphrase one of his examples, if the government places a tariff on foreign-made sweaters, American sweater makers will temporarily benefit because they can stay in business despite not being as efficient (and therefore able to profitably charge a lower price) as their foreign competitors. But the butcher, the baker, and the candlestick maker will be worse off, because consumers who buy a sweater will have less money to spend on beef, cupcakes, and candles, to name just one bad consequence (there are many others).
Hazlitt is great at making this point, and showing that artificially propping up one industry or artificially increasing that industry's demand, necessarily hurts other industries. It's hard to argue with such simply presented cases as his -- at least, I think it is.
The problem is that, with most liberals I know, Hazlitt's argument wouldn't matter -- because it fails to make a moral case. "Yes," I can see friends of mine* saying, "it's true that getting the government into health care would cause an increased demand for health care providers and products. And that demand would lead to less consumption in other industries, because taxing the wealthy or making people who don't have insurance buy it would mean they have less to spend on other things. But how is that a bad thing? People need health care. They don't need diamonds or SUVs or steakhouse dinners. I don't see a problem with taking money from luxury industries to pay for necessities."
That's why the practical argument against government intervention in health care must be accompanied by a moral argument. Not only will further government intervention in health care not work, it is wrong on principle because health care is not a right. We need to have the courage to say that Grandma's brain cancer does not mean Paris Hilton has to give up one of her Balenciagas; the homeless man on the street does not have a right to the profits of the coffee shop around the corner to pay for his HIV medications; a child with spina bifida does not have the right to expensive treatments at the price of his next-door neighbor's not having a bicycle. It is perfectly all right for sympathetic people to help out in such situations through private charity -- but it is not the right of the poor and the sick to take from the healthy and wealthy.
Hazlitt's arguments are excellent, but they are not enough. We need, too, the ideas of Ayn Rand.
* Yes, I do have liberal friends -- lots of them -- but boy, does it drive me crazy talking politics with them!
Monday, August 17, 2009
Lessons from the doctor behind "House"
My husband and I are fans of House, M.D., the popular Sherlock Holmes-based medical drama starring ornery but brilliant Dr. House, the doctor with a painkiller addiction who can solve nearly everyone's medical problems but his own.
Today, Time magazine features a Q&A with Dr. Lisa Sanders, medical adviser to the show. I was fascinated by her insights:
Today, Time magazine features a Q&A with Dr. Lisa Sanders, medical adviser to the show. I was fascinated by her insights:
- Being a great diagnostician is less about IQ and more about a certain kind of intelligence -- the kind that loves to solve puzzles and collect as much information as possible.
- Medical residency used to mean living in the hospital, hence the name -- and today's residents, with their state-mandated work-hour maximums, don't get to spend enough time observing patients from start to finish. This is particularly true since patients are rushed out of hospitals more quickly these days, when a third-party payor wants the patient sent home as soon as possible.
- Knowing how to interact with your doctor as a person, and not just as a medical expert, can help you get better care.
Required reading for liberals
I'm currently reading Henry Hazlitt's classic, Economics in One Lesson.
This ought to be required reading -- I would especially like to put it in front of every liberal I'm friends with on Facebook. Hazlitt does make a purely practical argument against government intervention, and therefore leaves himself open to attacks from socialists who think it's morally better than everyone have $10,000 than that some people have $20,000, some people have $100,000, and some people have millions. He also says that some level of taxation to pay for some level of societal benefits is probably necessary. So it's not a perfect book. But it is a very, very good book.
The reason why is that it's so simple. In plain language, with examples that anybody can understand, Hazlitt debunks economic fallacy after economic fallacy. Can we stimulate the economy by replacing so-called "clunkers" with "environmentally friendly" vehicles? Take a look at Hazlitt's explanation of the broken-window fallacy. Will extending credit to wannabe homeowners who wouldn't otherwise have been considered good risks by a bank help the economy? Nope; it'll be a disaster, says Hazlitt (and he wrote the book well before last year's credit crunch). Will forcing Americans to fund health insurance for their neighbors be a good thing? Using examples from other areas, Hazlitt easily shows that it won't be.
I just opened the book for the first time on my subway ride this morning, and I'm already 66 pages in. Who would have thought that a book about economics could be such a page-turner?
This ought to be required reading -- I would especially like to put it in front of every liberal I'm friends with on Facebook. Hazlitt does make a purely practical argument against government intervention, and therefore leaves himself open to attacks from socialists who think it's morally better than everyone have $10,000 than that some people have $20,000, some people have $100,000, and some people have millions. He also says that some level of taxation to pay for some level of societal benefits is probably necessary. So it's not a perfect book. But it is a very, very good book.
The reason why is that it's so simple. In plain language, with examples that anybody can understand, Hazlitt debunks economic fallacy after economic fallacy. Can we stimulate the economy by replacing so-called "clunkers" with "environmentally friendly" vehicles? Take a look at Hazlitt's explanation of the broken-window fallacy. Will extending credit to wannabe homeowners who wouldn't otherwise have been considered good risks by a bank help the economy? Nope; it'll be a disaster, says Hazlitt (and he wrote the book well before last year's credit crunch). Will forcing Americans to fund health insurance for their neighbors be a good thing? Using examples from other areas, Hazlitt easily shows that it won't be.
I just opened the book for the first time on my subway ride this morning, and I'm already 66 pages in. Who would have thought that a book about economics could be such a page-turner?
Thursday, August 13, 2009
I'm not the one who needs a reality check
This week, the White House launched its Reality Check page, which is supposed to "debunk" popular "myths" about healthcare "reform.
For example: "Reality Check: Reform will eliminate insurance discrimination against the disabled." And: "Reform will stop 'rationing' - not increase it." And: "Reform will benefit small business - not burden it."
Note all those quotation marks I used...because reality says that forcing insurance companies to cover everyone, regardless of their health, only encourages risky behavior (why not smoke, if someone else is going to pay for your lung cancer treatment? why not overeat, if someone else is paying for your diabetes medication?) and forces the healthy to subsidize the sick. Reality says that when demand exceeds supply, not everybody can have what they want -- and if it's not the free market that decides (by determining a price at which the number of willing sellers matches the number of willing buyers), it's going to be a bureaucrat, by...rationing care! Reality says that if you increase the tax burden on businesses, it's the mom-and-pop shops, the small businesses for whom a "small" tax increase could mean the difference between staying open and closing their doors, who will go under.
It's true that a reality check is needed. But it's the President who needs one the most.
For example: "Reality Check: Reform will eliminate insurance discrimination against the disabled." And: "Reform will stop 'rationing' - not increase it." And: "Reform will benefit small business - not burden it."
Note all those quotation marks I used...because reality says that forcing insurance companies to cover everyone, regardless of their health, only encourages risky behavior (why not smoke, if someone else is going to pay for your lung cancer treatment? why not overeat, if someone else is paying for your diabetes medication?) and forces the healthy to subsidize the sick. Reality says that when demand exceeds supply, not everybody can have what they want -- and if it's not the free market that decides (by determining a price at which the number of willing sellers matches the number of willing buyers), it's going to be a bureaucrat, by...rationing care! Reality says that if you increase the tax burden on businesses, it's the mom-and-pop shops, the small businesses for whom a "small" tax increase could mean the difference between staying open and closing their doors, who will go under.
It's true that a reality check is needed. But it's the President who needs one the most.
Wednesday, August 12, 2009
Whole Foods does it right
Yesterday's Wall Street Journal contained an op-ed by Whole Foods CEO John Mackey on how to reform health care in America. It's truly refreshing to be able to present something positive about health care, and in this case, the positive is what Whole Foods is doing right. Rather than pay for comprehensive (and expensive) coverage for its employees, the firm instead pays the premiums for a high-deductible ($2,500) insurance plan, and puts additional money into health spending accounts that roll over from year to year.
So Whole Foods employees know that, if they experience a serious and unexpected illness like cancer or a heart attack, they won't be liable for more than $2,500 of the bill. They also know that, if they're careful, they can spend less, and keep the rest in their HSA. So they start thinking things like: If I choose the generic birth control pill, I'll spend $400 less per year. If I eat right, I won't have to spend so much on cholesterol-reducing medications and diabetes drugs. If I go to a running store and get outfitted for the proper shoes, I won't need to see a sports medicine specialist when I blow out my ankle. And so on and so forth.
These are exactly the kinds of decisions that don't routinely get made in America, because we're so used to asking for care regardless of cost.
Read Mr. Mackey's full piece to see some of his excellent ideas for real healthcare reform in America. He hasn't quite reached the proper conclusion -- that a fully free market in health care is the only moral system -- yet. His assertion, for example, that we need to "enact [Medicare] reforms that create greater patient empowerment, choice and responsibility," indicates that he doesn't question why Medicare exists at all. But he's got a lot of great things to say.
So Whole Foods employees know that, if they experience a serious and unexpected illness like cancer or a heart attack, they won't be liable for more than $2,500 of the bill. They also know that, if they're careful, they can spend less, and keep the rest in their HSA. So they start thinking things like: If I choose the generic birth control pill, I'll spend $400 less per year. If I eat right, I won't have to spend so much on cholesterol-reducing medications and diabetes drugs. If I go to a running store and get outfitted for the proper shoes, I won't need to see a sports medicine specialist when I blow out my ankle. And so on and so forth.
These are exactly the kinds of decisions that don't routinely get made in America, because we're so used to asking for care regardless of cost.
Read Mr. Mackey's full piece to see some of his excellent ideas for real healthcare reform in America. He hasn't quite reached the proper conclusion -- that a fully free market in health care is the only moral system -- yet. His assertion, for example, that we need to "enact [Medicare] reforms that create greater patient empowerment, choice and responsibility," indicates that he doesn't question why Medicare exists at all. But he's got a lot of great things to say.
The cost of care
The New York Times reports today that healthcare providers can bill huge amounts for their services -- sometimes many, many more times than Medicare or an insurance provider will pay. Patients who are uninsured or who go out of their insurers' networks for coverage are stuck with the cost, and they're not happy about it.
The implication in the article is clear: that healthcare providers are the cause of the high charges, and that this is a Bad Thing. The author stops short of saying that Obama and his gang need to fix this, but that's sure to be the cry from readers.
Left completely out of the story is how the high price of health care is, in large part, caused by government interference in the first place.
For example, the story mentions a surgeon repairing a young child's injury with three stitches in the emergency room, a simple procedure that nonetheless cost the parents $6,000, only a portion of which their insurance would cover.
Why was the procedure so expensive? Because it took place in an emergency room! ERs are forced by the government to provide care to anyone who walks in, regardless of their ability to pay. That means scads of deadbeats with sniffles and toothaches who lengthen the line at the ER because they know they won't be paying for their care. Who will? The other patients at the ER. The hospital has to charge each paying patient, not only the cost of his care, but the cost of the care of the other patients the government forced it to treat without compensation. So bills at the ER are grossly inflated -- not because unscrupulous hospital administrators are trying to squeeze patients, but because they have to overcharge those who do pay or else go under.
Then there's the other, more subtle way government pushes up the price of our care. The family in the example above didn't ask how much it would cost to have a plastic surgeon, instead of one of the regular ER doctors, perform their son's procedure. They didn't ask -- because they assumed their insurance would cover it.
Most of us have insurance because the government provides tax incentives for our employers to offer it to us. Because of this "gift" via coercion, we don't look our policies over too closely -- one usually has a choice of two or three policies between a given employer, at most, so what does it matter which one you pick? Why spend time looking to see whether you are getting the best value for your money? And why bother, if you carry insurance regardless of whether or not it makes sense for you to carry insurance, to price shop? I bet just about every insured American does this: Why bother finding out how much a surgeon will charge to operate on my knee, or to compare the cost with the surgeon's ability to determine how much I want to pay? Why bother asking if an older, less expensive drug would be enough for my needs, rather than the pricey new pill my doctor has ordered? And when nobody cares how much things cost, demand goes up. When that happens, there's no incentive for healthcare providers to innovate so that they can provide a lower price, or greater value for the same price.
These effects are, directly or indirectly, caused by government intervention. So the way to fix the problem is to remove government intervention -- not to add more.
The implication in the article is clear: that healthcare providers are the cause of the high charges, and that this is a Bad Thing. The author stops short of saying that Obama and his gang need to fix this, but that's sure to be the cry from readers.
Left completely out of the story is how the high price of health care is, in large part, caused by government interference in the first place.
For example, the story mentions a surgeon repairing a young child's injury with three stitches in the emergency room, a simple procedure that nonetheless cost the parents $6,000, only a portion of which their insurance would cover.
Why was the procedure so expensive? Because it took place in an emergency room! ERs are forced by the government to provide care to anyone who walks in, regardless of their ability to pay. That means scads of deadbeats with sniffles and toothaches who lengthen the line at the ER because they know they won't be paying for their care. Who will? The other patients at the ER. The hospital has to charge each paying patient, not only the cost of his care, but the cost of the care of the other patients the government forced it to treat without compensation. So bills at the ER are grossly inflated -- not because unscrupulous hospital administrators are trying to squeeze patients, but because they have to overcharge those who do pay or else go under.
Then there's the other, more subtle way government pushes up the price of our care. The family in the example above didn't ask how much it would cost to have a plastic surgeon, instead of one of the regular ER doctors, perform their son's procedure. They didn't ask -- because they assumed their insurance would cover it.
Most of us have insurance because the government provides tax incentives for our employers to offer it to us. Because of this "gift" via coercion, we don't look our policies over too closely -- one usually has a choice of two or three policies between a given employer, at most, so what does it matter which one you pick? Why spend time looking to see whether you are getting the best value for your money? And why bother, if you carry insurance regardless of whether or not it makes sense for you to carry insurance, to price shop? I bet just about every insured American does this: Why bother finding out how much a surgeon will charge to operate on my knee, or to compare the cost with the surgeon's ability to determine how much I want to pay? Why bother asking if an older, less expensive drug would be enough for my needs, rather than the pricey new pill my doctor has ordered? And when nobody cares how much things cost, demand goes up. When that happens, there's no incentive for healthcare providers to innovate so that they can provide a lower price, or greater value for the same price.
These effects are, directly or indirectly, caused by government intervention. So the way to fix the problem is to remove government intervention -- not to add more.
Monday, August 10, 2009
So what can't wait, exactly?
Here's something I didn't know about HR 3200 until today: that the massive expansion in health insurance coverage sought by Democrats would not actually take effect until 2013 -- after the next presidential election.
And this is what Democrats call having to do something NOW?
It's clear that what they want done now is to get a bill signed before Americans have had a chance to debate it. The sense of urgency is there because their plan is untenable and unsupportable by an appeal to reason. When they can't win by rational argument, they try to win by pushing their proposal through without an argument.
So apparently we can wait to have "universal health care," but we can't wait to force the idea of it down Americans' throats. Don't fall for it!
And this is what Democrats call having to do something NOW?
It's clear that what they want done now is to get a bill signed before Americans have had a chance to debate it. The sense of urgency is there because their plan is untenable and unsupportable by an appeal to reason. When they can't win by rational argument, they try to win by pushing their proposal through without an argument.
So apparently we can wait to have "universal health care," but we can't wait to force the idea of it down Americans' throats. Don't fall for it!
Friday, August 7, 2009
You see what happens when you make a deal with the devil?
Making deals is for honest men. The minute you make a deal with a liar, a cheat, a sneak...well, that hug he's giving you is so he can have better access to plant the knife in your back.
Just yesterday, the New York Times was reporting that the White House intended to stick to its bargain with the pharmaceutical industry: In order to get PhRMA, the industry lobby group, to come to the negotiating table at the outset of the process, the White House promised that the pharmaceutical industry would not have to eat more than $80 billion of costs. Just yesterday, the leader of PhRMA was crowing, “Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.”
Today, the Times reports that Congress is saying a big fat NO to keeping the terms of the deal. Says House democrat Henry Waxman, “PhRMA would like to see if they can get a bargain. I think that PhRMA should contribute more than PhRMA wants to contribute.” And Nancy Pelosi says, “We know we can squeeze more from the system. The minute the drug companies settled for $80 billion, we knew it was $160 billion.”
See, PhRMA? When you make a deal with the leader of a group lacking in scruples, don't be surprised if the White House's word is worth about as much as a Zimbabwe dollar.
Just yesterday, the New York Times was reporting that the White House intended to stick to its bargain with the pharmaceutical industry: In order to get PhRMA, the industry lobby group, to come to the negotiating table at the outset of the process, the White House promised that the pharmaceutical industry would not have to eat more than $80 billion of costs. Just yesterday, the leader of PhRMA was crowing, “Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.”
Today, the Times reports that Congress is saying a big fat NO to keeping the terms of the deal. Says House democrat Henry Waxman, “PhRMA would like to see if they can get a bargain. I think that PhRMA should contribute more than PhRMA wants to contribute.” And Nancy Pelosi says, “We know we can squeeze more from the system. The minute the drug companies settled for $80 billion, we knew it was $160 billion.”
See, PhRMA? When you make a deal with the leader of a group lacking in scruples, don't be surprised if the White House's word is worth about as much as a Zimbabwe dollar.
Thursday, August 6, 2009
Big Brother and health care
Several Objectivists have blogged about the Obama administration's request that Americans start reporting each other should they hear "fishy" information about healthcare reform. I'd laugh at the fact that the White House blog post in question is titled "Facts Are Stubborn Things" (why, yes, Mr. President, they are; try paying attention to them sometime), except that the request is not funny at all.
I responded with:
The only "fishy" information I'm hearing about healthcare "reform" is the awful proposals coming from the President and from Congress. I believe in a free market in health care -- which probably makes me one of your targets, but it's you who are feeding the false information. Shall I report the White House to the White House?
It disgusts me that you are asking Americans to report each other's conversations to the White House, as though we are living in Communist East Germany and we are all Stasi.
Not your comrade,
Stella Daily Zawistowski
Many other Objectivists have reported themselves or sent emails to the address, flag@whitehouse.gov. I encourage you to do the same. Whether we clog the White House's inbox with useless-to-them mail, or send a message that Americans aren't buying Obama's "fishy" information, we will be doing a good thing.
I responded with:
The only "fishy" information I'm hearing about healthcare "reform" is the awful proposals coming from the President and from Congress. I believe in a free market in health care -- which probably makes me one of your targets, but it's you who are feeding the false information. Shall I report the White House to the White House?
It disgusts me that you are asking Americans to report each other's conversations to the White House, as though we are living in Communist East Germany and we are all Stasi.
Not your comrade,
Stella Daily Zawistowski
Many other Objectivists have reported themselves or sent emails to the address, flag@whitehouse.gov. I encourage you to do the same. Whether we clog the White House's inbox with useless-to-them mail, or send a message that Americans aren't buying Obama's "fishy" information, we will be doing a good thing.
Wednesday, August 5, 2009
Cut spending, but not on me!
Today's Wall Street Journal describes how lobbying groups of all kinds are doing their damnedest to make sure that healthcare reform doesn't come at their expense. Makers of medical devices don't want payments for diagnostic tests to be cut -- they're already too low, argue the manufacturers. Rural hospitals don't want their Medicare payments slashed -- they already get paid less than city hospitals. City hospitals don't want their payments cut -- they provide more services than the rural hospitals and deserve that money, they say. The elderly don't want the young to have cheaper insurance if insurers can go on charging different rates to older and younger patients. And so on and so forth.
Ted Okon, executive director of the Community Oncology Alliance (a group that is trying to get cuts in Medicare payments for cancer treatment reversed), epitomized the attitude of every lobby group when he said, "We believe that...everyone in the system should pitch in and help pay, but we basically have done more than our share."
This is what health care turns into when you get the government involved. Instead of businesses competing to offer consumers the best products they can afford, we get businesses clawing at each other to force others to bear the pain of cost cuts. In a free market, innovation would lead to cost reductions -- and competitors would have to match those price cuts, invent better products, or go out of business. Instead, cost reductions will be determined based on which lobby group happens to have Congress's ear today. Not enough young voters protesting high insurance prices? Young people will pay the price of "equal premiums" that force them to shoulder the cost of health care for the elderly. Are medical device makers getting the attention of Congress? Then Congress will try to shift cost cuts to someone else, say, the pharmaceutical industry, and you can forget about new drugs being developed as profit margins fall. Etc., etc., etc.
It's not pull that should decide who has to accept revenue cuts and who can continue living large. It's the free market.
Ted Okon, executive director of the Community Oncology Alliance (a group that is trying to get cuts in Medicare payments for cancer treatment reversed), epitomized the attitude of every lobby group when he said, "We believe that...everyone in the system should pitch in and help pay, but we basically have done more than our share."
This is what health care turns into when you get the government involved. Instead of businesses competing to offer consumers the best products they can afford, we get businesses clawing at each other to force others to bear the pain of cost cuts. In a free market, innovation would lead to cost reductions -- and competitors would have to match those price cuts, invent better products, or go out of business. Instead, cost reductions will be determined based on which lobby group happens to have Congress's ear today. Not enough young voters protesting high insurance prices? Young people will pay the price of "equal premiums" that force them to shoulder the cost of health care for the elderly. Are medical device makers getting the attention of Congress? Then Congress will try to shift cost cuts to someone else, say, the pharmaceutical industry, and you can forget about new drugs being developed as profit margins fall. Etc., etc., etc.
It's not pull that should decide who has to accept revenue cuts and who can continue living large. It's the free market.
Tuesday, August 4, 2009
PhRMA, you disgust me
Harry and Louise are back. But this time, they're not talking about how government interference in health care would lead to soaring costs. Instead, they're talking about how everybody needs to come to the negotiating table because people need good coverage -- and by "good" they mean affordable, portable, and available to patients with preexisting conditions. Never mind that "affordable" and "available to anyone, regardless of current health status" are pretty much mutually exclusive, unless insurers are allowed to say what gets covered and what doesn't (which, of course, they don't).
Who sponsored this ad? It wasn't the Nancy Pelosi Club. It wasn't Kittens For Obama. It was the Pharmaceutical Researchers and Manufacturers of America (PhRMA) -- an industry group.
Apparently PhRMA thinks that if Congress makes all Americans get health insurance, Americans will buy more of their drugs. So they're trying to get public opinion against the insurance companies, to force them to take the deal. "A little more cooperation and a little less politics, and we can get the job done this time," sneers Louise.
I like Big Pharma. I admire the companies that have produced so many lifesaving therapies. I believe in their right to charge what they wish and make a profit. I don't believe pharmaceutical companies should be forced to give away their wares for free, simply because patients need them. That is nothing but looting.
Except...by supporting Obama's bid to force insurers to cover all Americans, Big Pharma is itself becoming one of the looters. PhRMA wants insurers to pay for its member companies' drugs, and it's willing to press for government force to see it happen. This is plain thuggish behavior -- and although PhRMA may envision money pouring in for drugs from newly covered patients, such behavior will only spell disaster for the pharmaceutical industry.
Looting, after all, only works as long as there are victims to loot. Healthcare "reform" will force some insurers out of business -- because either their cover-everybody policies will be so expensive that Americans will turn to the "strong public option" that Obama wants, or the revenues won't match the operating costs. And you can bet that as more and more Americans sign up for insurance made artificially cheap through taxpayer dollars, Congress will be looking hard at how to reduce costs. How will they do it? Among other ways, by calling Big Pharma evil and slapping it with price controls, of course.
PhRMA, please stop. It's not in your self-interest to become one of the thugs.
Who sponsored this ad? It wasn't the Nancy Pelosi Club. It wasn't Kittens For Obama. It was the Pharmaceutical Researchers and Manufacturers of America (PhRMA) -- an industry group.
Apparently PhRMA thinks that if Congress makes all Americans get health insurance, Americans will buy more of their drugs. So they're trying to get public opinion against the insurance companies, to force them to take the deal. "A little more cooperation and a little less politics, and we can get the job done this time," sneers Louise.
I like Big Pharma. I admire the companies that have produced so many lifesaving therapies. I believe in their right to charge what they wish and make a profit. I don't believe pharmaceutical companies should be forced to give away their wares for free, simply because patients need them. That is nothing but looting.
Except...by supporting Obama's bid to force insurers to cover all Americans, Big Pharma is itself becoming one of the looters. PhRMA wants insurers to pay for its member companies' drugs, and it's willing to press for government force to see it happen. This is plain thuggish behavior -- and although PhRMA may envision money pouring in for drugs from newly covered patients, such behavior will only spell disaster for the pharmaceutical industry.
Looting, after all, only works as long as there are victims to loot. Healthcare "reform" will force some insurers out of business -- because either their cover-everybody policies will be so expensive that Americans will turn to the "strong public option" that Obama wants, or the revenues won't match the operating costs. And you can bet that as more and more Americans sign up for insurance made artificially cheap through taxpayer dollars, Congress will be looking hard at how to reduce costs. How will they do it? Among other ways, by calling Big Pharma evil and slapping it with price controls, of course.
PhRMA, please stop. It's not in your self-interest to become one of the thugs.
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