Friday, September 4, 2009

I promise. I will never... Die...

Yesterday, Facebook exploded with this lovely status update:
"No one should die because they cannot afford health care, and no one should go broke because they get sick. If you agree, please post this as your status for the rest of the day"
Naturally, this was in support of ObamaCare, KennedyCare, "The Public Option"... Whatever way our masters want us to call the nationalization/socialization of 15% of one of the most important parts of our economy. What's so genius about the status, and what's so irritating, is that it says nothing that any sensible human could possibly disagree with.

OF COURSE no one should die because they can't afford health care. And OF COURSE no one should go broke because they get sick.

So what?

It's a complete an utter non-sequitur from there to saying that government should be stealing other people's money, or outright enslaving doctors & producers to fit some ridiculous bastardization of "rights"!

Yes, no one should have to go broke because they get sick. But that's a false dilemma. No one who disagrees with Obama's attempts to take-over health care thinks people ought to die! To suggest that they do, is not only disingenuous, but despicable and insane to boot.

So instead of being idiots and thinking that somehow a weak, overwrought emotionalized statement of a desire gives some people a right to force other people to pay for their existence, let's actually ask the question; "Why is health care so damned expensive??"

But no one bothers to ask that question. No one bothers to take the half an hour it takes to dig a little deeper into the history of health care in the US, apply the basic knowledge of economics required to understand the data and realize that the laws of supply & demand don't just disappear because the good in question is called "medicine".

Supply & demand applies to everything that is a scarce resource, not immediately produce-able by all people and thus which needs to be traded. Many of these resources are crucially important for our lives - even when they're not called "health care". Food, bricks & mortar for housing, steel, plastic, microchips... It doesn't matter. When prices are high, the only thing you need to know is that there is not enough of the resource in question compared to the number of people who want access to it.

That's it. It's that simple.

So WHY is there not enough health care resources in the US or anywhere else in the world?

Some people blame that great evil: profit. But, of course, the whopping 3-4% profit margins found in the health insurance industry (under "health care plans" which includes Aetna, Cigna, Magellan, WellPoint & other major insurance providers and under "accident & health insurance") certainly seems like the thing to blame, doesn't it? (/sarcasm)

Compare that with the oh-so-modest 18% profit margins of all those industries which make other totally unaffordable products like... Oh, I don't know... Beer.

What's that you say? Profit margins in health insurance aren't very high?? Uhhh. Yep... That's exactly what I'm saying.

So if those greedy bastards and their "profit-seeking" ways aren't to blame for the high cost of health insurance, what is? That I've covered endlessly already, so I'm not going to waste too much time on it, and instead point to my magnum opus on the topic here: Why We Must NOT Ration Health Care.

I will say the following words and hope they encourage some further though: Cartel. Union. Monopoly. Oligarchy... That is to say, Government. I suppose I should elaborate a little just to be clear.

Cartel, Monopoly & Oligarchy: Insurance companies, major pharmaceutical companies (which do actually make extraordinary profits, thanks to virtually indestructible patent laws) & other medical suppliers form the cartel. A cartel is a formal "agreement" coordinating prices & production... In this case, the cartel is entirely created by legislation. Because government, and not firms competing in an open market, has decided to control what prices & coverage insurance companies are allowed to offer, what patents to grant to which companies and for how long, and what limits on production & supply will be, they have rendered the entire medical supply chain and insurance system into a homogeneous entity which is almost entirely non-competitive. The underside of this is of course, like any cartel, that while the firms don't get to set all the policy (this is to say, if they were entirely in control, then they would probably push for lower coverage requirements) they get to influence more than enough of it to retain their position on top. Perhaps it's time to drudge up my war-horse Milton Friedman quote from 1978:
"Business corporations in general are not defenders of free enterprise. On the contrary, they are one of the chief sources of danger....Every businessman is in favor of freedom for everybody else, but when it comes to himself that's a different question. We have to have that tariff to protect us against competition from abroad. We have to have that special provision in the tax code. We have to have that subsidy."

Of course, ironically, having spent a good deal of time learning the history of health care in the US, I don't get the impression that the cartelization was something that the insurance companies actually started. It seems more like one of those "unintended" consequences of legislation mandating rather excessive "minimum" requirements. Regardless, the big firms benefit now by having minimal competition and a legally mandated way to avoid even attempting to innovate.

The monopoly/oligarchy part comes into play as insurance providers are granted exclusive regions in which to operate and inter-state and international competition has been prohibited by law.

The consequence of all this lack of competition is twofold:

1. You & me, as consumers of health care have rather limited options when it comes to what our insurance is designed to cover and even who will provide it. Generally healthy people wind up paying for far more than they'll ever need, and generally unhealthy people may very well wind up paying for less coverage than is necessary, or perhaps the wrong coverage entirely if they aren't careful enough in their selections (or wealthy enough to just get the "buy it all" option). Your friendly politician 3,000 miles away in Washington D.C. can't really know what you need though, can she? No... I thought not. It's a good thing she's making decisions for you anyway though, isn't it?

And, of course... Lack of competition ALWAYS results in:

2. HIGHER COSTS! If companies are all required to provide the same coverage, and a cartelized, monopolistic system means there is exactly zero market incentives to increase efficiency or actually do things better than other companies (who are not "competitors" now, but just identical providers), and thus there's no reason to push prices down like every industry in the less restricted parts of the economy inevitably must do to remain in business.

Union: The American Medical Association. Ugh... Isn't it cool that a single organization gets the legislated privilege to control the number of medical licenses & slots open to new medical students for a whole country? Isn't it even cooler that as a result, they can create severe shortages in the supply of doctors - some might say, deliberately (like any union) in order to keep salaries high?

What's that, you say? No it isn't cool? Oh right. No... It sure isn't.

Of course, the elephant in the room is that providing members with high salaries, special benefits and exclusive privileges via restrictions on entry into the club is precisely the point of every union! If the AMA was just one of many professional organizations which set the standards for medical care providers, that would be one thing... In that world, anyone who wanted to enter med school could do so provided that they had the grades and anyone could become a doctor provided they met those minimum standards. Unfortunately, this is not the case. Instead, the AMA gets to dictate and centrally plan the supply of labor - with the legal authority of Congress at their back. And like all central planners, the AMA does a pretty horrible job keeping supply in line with real demand.

Even worse than just licensing though, it is against the law for a nurse or a physician's assistant to treat anyone without a doctor present. So not only are there too few doctors to begin with... But the doctors that we do have wind up spending an inordinate amount of time seeing people with minor issues which could easily be attended to by a nurse.

This has two horrendous consequences as well.

1. You guessed it: Higher prices! It ain't rocket science folks... When there are fewer doctors available being sought after by a large number of people (a larger than necessary number, unfortunately), then each doctor gets to charge more... Those wages make your insurance and out-of-pocket expenses more expensive. Hooray!

2. The really horrible one... High demand + low supply of medical care providers = fewer people actually have access to the people they often desperately need to see to maintain their good health. That's right, the AMA's special legal position has created doctor shortages, which directly result in harm to people all over the US, especially those living in poorer & rural areas who cannot afford to pay doctors what other more wealthy areas can support. Big problem.

The root of all evil. By which I mean - 50 years of constant tampering in medicine has destroyed competition, destroyed medical supply production, reduced the number of doctors per capita, virtually destroyed medical charities, sucked taxpayers dry from paying trillions of dollars into ridiculous failures like Medicare & Medicaid, which have some $100 Trillion in unfunded liabilities (to be paid by our kids no doubt) and through it all blamed "the free market" - which hasn't existed in this industry for quite some time - instead of themselves.

While bizarro-world politicians continue to congratulate themselves on their incessant failures, year after year costs have gone up and up and up. If they actually used their think-boxes from time to time, instead of their talk-boxes, they'd probably have figured out that it's their fault, but I think I might expect too much...

That ridiculous status update spread like wildfire through Facebook yesterday, but it actually only states a desired end (primarily based in wishful/magical thinking) and offers nothing in the way of a suitable means to achieve that end. And thus the whole thing was stupid! It's something no one could possibly disagree with, but which was designed to present a false dilemma:

Either you're for "Universal Health Care", or you want people to go broke & die.

But that's entirely besides the point! Everyone agrees on what the outcome should be (fewer needless deaths, lower cost of health care), but the "means" being supported by that update necessarily fails on every level to accomplish the goal. In fact, it's just more of what we've been doing for half a century... MUCH more of the same nonsense.

More government, more control, more limitations on supply & production, more demands of doctors' time, more money, more bloviating politicians, more non-arguments, more propaganda, more shortages, rationing & assuredly more lies and scapegoats... The only thing it's not "more" of is doctors, competition or the supply of medicine.

You know... the things we actually need more of!

What I want to know though... How are there people in the world who are possibly so gullible as to not understand this?? Why are people more content to supplant reason and knowledge for magical, hopeful, wishful idiocy?

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