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How to NOT control rising health care costs

Submitted by Thomas Sewell on Wed, 11/11/2009 - 10:35
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There is a discussion in a NY Times blog with proposals for controlling health care costs.

Most of the ideas make things worse, not better.

Quick summaries:

Jacob S. Hacker, political science academic: Use government price controls.

This quickly turns into shortages. Some political scientists still ignore basic economics.

Len M. Nichols, think tank health guy: Give more power to the Medicare commission to run everything.

Really? Because the Medicare folks already do such a bang-up job of making sure Medicare isn't going to lose trillions over time?

Gail Wilensky, medicare bureacrat who moved to an NGO: Tax more expensive health insurance more and give the secretary of Health and Human Services lots more power over everything.

Yep, Congress is too busy to make the important, hard decisions that the policy elite want to happen, so it's best to outsource it all to the "experts" in the executive. Better deniability for lousy decisions all around.

Joseph Antos, think tank academic: Fix the employer tax break, competition in state markets, give pricing information to patients, make Medicare compete with Medicare Advantage.

And here's our first set of proposals that would actually lower costs while improving things. The solutions are of the "tweak the existing system" mentality, but at least they are steps in the right direction.

Daniel Callahan, think tank guy: Medicare rationing and price controls on health insurance.

At least he comes right out in favor of legally limiting how much health care people get! I'm not sure that's going to be too popular. It's definitely not necessary for bureacrats to tell people how much they need. And of course, price controls always result in shortages anyway.

Leslie Greenwald, think tank academic: Setup rationing by the elite based on "evidence".

Some how I don't think she gets who should be making the decisions about how much health care people should consume...

Arnold Kling, economist: Use vouchers to move from third-party payers to patients as consumers.

Our second idea that would actually accomplish something positive. Not sure it's totally workable, but it's for sure a big improvement on the current system!

My answer to the same question is totally unrealistic in the current political environment, but just for the record:

  • Increase supply of medical care by removing legal obstacles. That means removing licensing restrictions (especially for Health care professionals trained in other countries) and removing AMA (Doctor's union) restrictions on the number of new health care workers trained every year. It also means severely limiting the FDA's ability to stop drugs from being produced. At most, they should evaluate and report on, rather then control the legality of drugs. That way Doctors and their patients could choose what risks to take based on their best information available.
  • Add more competition to the system by overriding state insurance regulators with a federal mandate that allows interstate commerce in insurance policies. Either end tax breaks for employer-provided plans or make sure that they are matched exactly by breaks for non-employer-provided plans. Prevent any regulators anywhere from regulating what is offered at what price in health insurance plans. Innovation in insurance service doesn't start in state health insurance regulation committees!
  • Allow prices to reflect demand as much as possible by providing methods for price transparency in service as well as allowing insurance as insurance instead of pay-for-service plans. Most of that would be taken care of by removing regulatory obstacles as above.

Health care is a solvable problem, but it's unlikely to be solved when most of the proposals to do so just provide more of the same ideas that created the problems in the first place.

When people in this country consume more books than people in another country, we don't lament that U.S. "book costs" are much higher than average and that "something must be done!" Some of this issue results from government distortions of the market for health care at State and Federal levels, but a lot of this issue is also a misunderstang of what's going on.

Why aren't The Belgians in the Congo and the Kenyan* in the White House very much alike?

Submitted by Thomas Sewell on Sat, 08/22/2009 - 01:00
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I have a longer entry to discuss some of his ideas planned, but I couldn't resist sharing a quick preview from Mencius Moldbug's recent post on colonialism:

But fine. We'll start with the worst. Or after it, anyway. Our case study in colonialism: the Belgian Congo, aka Zaire. There is no defending the Congo Free State - but 1960 minus 1908 is quite some time. Observe the sinuosity with which this propagandist redacts an inconvenient half-century:

Government as a system of organized theft goes back to King Leopold II, who made a fortune [in the Congo] equal to well over $1.1 billion in today's money, chiefly in rubber and ivory. Then for fifty-two years this was a Belgian colony, run less rapaciously, but still mainly for the purpose—as with colonies almost everywhere—of extracting wealth for the mother country and its corporations. The grand tradition was continued by Mobutu Sese Seko...

In other words: skip from Leopold to Mobutu as fast as possible, noting only that the Congo under Belgian administration was... gasp... profitable. Sacre bleu! Another of those nitroglycerines, nurse - I think my heart just skipped a whole bar. Profitable government! Why, it's practically a second Holocaust.

Especially since I read that juxtaposed with the news that the White House has jacked up their deficit estimate by:

$2,000,000,000,000 (Two Trillion Dollars)

That's right. Turns out that the ever popular image of Obama's deficits was optimistic. Now that's spare change we can believe in™!

Don't Compromise on Government Health Care

Submitted by Thomas Sewell on Wed, 08/19/2009 - 00:42
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Make no mistake™, the current push for "health care reform" is a push for the government to take over and create socialized medicine and a single-payer system. In Obama's own words:

"I don't think we're going to be able to eliminate employer coverage immediately."

"There's going to be potentially some transition process."

"I happen to be a proponent of a single-payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on health care, cannot provide basic health insurance to everybody. And that's what Jim is talking about when he says everybody in, nobody out. A single-payer health care plan, a universal health care plan. That's what I’d like to see. But as all of you know, we may not get there immediately. Because first we've got to take back the White House, we've got to take back the Senate, and we've got to take back the House."

Well, they took all that back and it's apparent that changing the health care system is a major priority for the Dems. The basic problem they realized is that the public doesn't support a single-payer system. That makes congressmen who have to face elections next year pretty nervous. In fact, even with a "public option" proposal, they wanted desperately to get it pushed through quickly so that enough time would elapse before the next elections in the hopes that people would forget. Instead, people are debating it and dwelling on it.

It's to the point where some Dems are now going to be willing to compromise and even drop the "public option" if they can get the federal control part of the plan passed.

They're calling it a federal health care exchange. What it exchanges is the current choices people in most states have for forcing everyone into federal insurance standards that are very similar to a few states. You know, the states traditionally controlled by the progressives, where health insurance rates can be double what they are in more conservative states.

It's bad enough that the states can be very restrictive in limiting health insurance offerings and choices, but now they'll use federal mandates to require certain insurance coverage nationally to drive up the price of health insurance. Then they'll use that as the next excuse to try again for a public option that drives out private insurers and leads to a single-payer system.

That's the new fallback position for when they can't get everything they want through the Senate. Don't let them have that either. It will invariably make the insurance market more expensive and worse for regular people, giving them the excuse they want to try this all again in four more years. Just like they'd like to use that plus government "insurance" to either drive the insurance companies out of business or else turn them into government controlled insurers.

So don't let your congressman or Senator agree to vote for a "compromise". It will lead to anything but!

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