Bits and pieces on the Healthcare debacle
John Stossel, More Health Insurance is Not the Answer
Obama and his Senate allies would limit competition by requiring insurers to cover everyone for the same "fair" price. No "cherry picking," the president says. No charging healthy people less.
They call this "community rating," and it sounds fair. No more cruel "discrimination" against people who have a preexisting condition, obese people or smokers. But such simple-minded one-size-fits-all rules take from insurance companies their best price-dampening tool: Risk-based pricing encourages people to take better care of themselves, just as car-insurance companies reward good drivers. With one-size pricing your car-insurance company must give the town drunk the same deal it gives you.
Insane, but the health-insurance industry is playing along. Insurers say that if government forces everyone to have insurance, they will accept all customers regardless of preexisting illnesses...
"Community rating" hides the cost of health care. It's as destructive as ordering fire insurance companies to charge identical premiums for wood frame and stone houses. Universal health insurance with "no discrimination" pricing will make health care costs rise even faster.
When politicians interfere with free markets, unintended consequences harm everyone, except the companies that lobby hard enough to protect themselves."
Thomas DiLorenzo, Socialized Healthcare vs. The Laws of Economics
"The government's initial step in attempting to create a government-run healthcare monopoly has been to propose a law that would eventually drive the private health insurance industry out of existence. Additional taxes and mandated costs are to be imposed on health insurance companies, while a government-run "health insurance" bureaucracy will be created, ostensibly to "compete" with the private companies. The hoped-for end result is one big government monopoly which, like all government monopolies, will operate with all the efficiency of the post office and all the charm and compassion of the IRS...
The more money that has been spent on government-run healthcare, the less healthcare we have gotten. This kind of result is generally true of all government bureaucracies because of the absence of any market feedback mechanism. Since there are no profits in an accounting sense, by definition, in government, there is no mechanism for rewarding good performance and penalizing bad performance. In fact, in all government enterprises, exactly the opposite is true: bad performance (failure to achieve ostensible goals, or satisfy "customers") is typically rewarded with larger budgets. Failure to educate children leads to more money for government schools. Failure to reduce poverty leads to larger budgets for welfare state bureaucracies. This is guaranteed to happen with healthcare socialism as well."
Sheldon Richman, A Cornucopia of Healthcare Fallacies
"Outside the marketplace, no one can know how much doctors and hospitals should be paid. Bureaucrats can’t tell what is too much or little compensation because they can’t have the relevant knowledge. Markets are good at setting prices because that knowledge is communicated through people’s buying and abstention from buying.
This is not just an academic discussion. Prices are information, and when they are “wrong” there are consequences. If the bureaucrats pay too little, costs will be shifted to others and providers will leave the market, creating shortages. If the bureaucrats pay too much, resources and labor will drawn away from other needed areas. With the collapse of the Soviet Union and the continuing examples of Cuba and North Korea, we should all know that government doesn’t know how to set prices.
Obama promises overall “cost containment.” But government has only two ways to accomplish this: rationing or price controls. The drawback to the first is obvious. People are forbidden to buy the services they want, even when they are willing to pay for them themselves. Bureaucrats - rather than individuals and their doctors - decide what tests and procedures are necessary. The drawback to the second is that services will disappear from the marketplace. Price ceilings create shortages...
Does anyone else laugh when politicians promise that government will bring competition, choice, and efficiency to the medical industry? Government routinely can’t account for millions, even billions, of dollars. And competition and choice? As a compulsory monopoly, government is the enemy of those things."
Obama and his Senate allies would limit competition by requiring insurers to cover everyone for the same "fair" price. No "cherry picking," the president says. No charging healthy people less.
They call this "community rating," and it sounds fair. No more cruel "discrimination" against people who have a preexisting condition, obese people or smokers. But such simple-minded one-size-fits-all rules take from insurance companies their best price-dampening tool: Risk-based pricing encourages people to take better care of themselves, just as car-insurance companies reward good drivers. With one-size pricing your car-insurance company must give the town drunk the same deal it gives you.
Insane, but the health-insurance industry is playing along. Insurers say that if government forces everyone to have insurance, they will accept all customers regardless of preexisting illnesses...
"Community rating" hides the cost of health care. It's as destructive as ordering fire insurance companies to charge identical premiums for wood frame and stone houses. Universal health insurance with "no discrimination" pricing will make health care costs rise even faster.
When politicians interfere with free markets, unintended consequences harm everyone, except the companies that lobby hard enough to protect themselves."
Thomas DiLorenzo, Socialized Healthcare vs. The Laws of Economics
"The government's initial step in attempting to create a government-run healthcare monopoly has been to propose a law that would eventually drive the private health insurance industry out of existence. Additional taxes and mandated costs are to be imposed on health insurance companies, while a government-run "health insurance" bureaucracy will be created, ostensibly to "compete" with the private companies. The hoped-for end result is one big government monopoly which, like all government monopolies, will operate with all the efficiency of the post office and all the charm and compassion of the IRS...
The more money that has been spent on government-run healthcare, the less healthcare we have gotten. This kind of result is generally true of all government bureaucracies because of the absence of any market feedback mechanism. Since there are no profits in an accounting sense, by definition, in government, there is no mechanism for rewarding good performance and penalizing bad performance. In fact, in all government enterprises, exactly the opposite is true: bad performance (failure to achieve ostensible goals, or satisfy "customers") is typically rewarded with larger budgets. Failure to educate children leads to more money for government schools. Failure to reduce poverty leads to larger budgets for welfare state bureaucracies. This is guaranteed to happen with healthcare socialism as well."
Sheldon Richman, A Cornucopia of Healthcare Fallacies
"Outside the marketplace, no one can know how much doctors and hospitals should be paid. Bureaucrats can’t tell what is too much or little compensation because they can’t have the relevant knowledge. Markets are good at setting prices because that knowledge is communicated through people’s buying and abstention from buying.
This is not just an academic discussion. Prices are information, and when they are “wrong” there are consequences. If the bureaucrats pay too little, costs will be shifted to others and providers will leave the market, creating shortages. If the bureaucrats pay too much, resources and labor will drawn away from other needed areas. With the collapse of the Soviet Union and the continuing examples of Cuba and North Korea, we should all know that government doesn’t know how to set prices.
Obama promises overall “cost containment.” But government has only two ways to accomplish this: rationing or price controls. The drawback to the first is obvious. People are forbidden to buy the services they want, even when they are willing to pay for them themselves. Bureaucrats - rather than individuals and their doctors - decide what tests and procedures are necessary. The drawback to the second is that services will disappear from the marketplace. Price ceilings create shortages...
Does anyone else laugh when politicians promise that government will bring competition, choice, and efficiency to the medical industry? Government routinely can’t account for millions, even billions, of dollars. And competition and choice? As a compulsory monopoly, government is the enemy of those things."