Defenestrating Thoughts from the Bivouac

My last two posts about the causes of our heathcare problems and how to fix them have been two of my most widely read posts; in fact they are even more popular than the sleeper story of my color-changing pants. :-P

So, given all the continuing ruckus around the issue of health care, I thought it was worth making a few last comments on the topic. :-)

First, we have to remember that the system we have today is not a “free market” system. Why? Well, we already discussed the some of the government policies that cause massive distortions in the market. And there are hundreds of more rules and regulations. For example, in Maryland, employer provided health plans must provide 66 different benefits: everything from hair prostheses to in-vitro fertilization to massage therapy. If they don’t, then they can’t provide any coverage at all. As a result, employer-provided plans in Maryland cost 12% more than the national average (source).

The system we have today is the result of government policies and regulations. Even if you health insurer is screwing you over, you can’t do much. Your only option is to leave your job. This protects the insurers from competition and they lobby heavily to keep things that way. The very last thing they want is to have to compete with other companies to get their customers.

This is something to keep in mind why we discuss how to “fix” the problem. It’s highly unlikely that more of what get us into the problem will get us out.

Second, I think it’s important to point out that there is the goal of “affordable, quality healthcare for everyone” (the “ends”) and then there’s the strategy of achieving that goal (the “means”). “Obamacare” is just one of these means. In these sorts of discussions, people seem to forget that means and ends are separate things. It’s quite reasonable to believe that you can achieve the goal of affordable, healthcare without Obamacare.

Anyone who claims that opposition to Obama’s plan is the same as “not wanting affordable quality healthcare” is being extremely disingenuous. They are either guilty of myopic thinking or worse, just using underhanded propaganda to try to drum up support for their plan.

A good example of this is the “Patriot Act”. Proponents equated the Patriot Act with “protecting Americans”. If you opposed the Patriot Act, they claimed that you were against “protecting Americans”. Which, of course, is just plain wrong.

The same thing is happening with Obama’s plan. I’ve heard many people dismiss criticism of Obama’s plan with, “I don’t understand how anyone can be against reform.” Guess what? You can be against the plan (“the means”) and still be for reform (“the end”). Means and ends are not the same thing!

Here’s another recent example: Whole Food CEO John Mackey wrote an Op-Ed talking about how a few reforms that would improve healthcare and make it more affordable and accessible for everyone. He opposes Obamacare as a solution to the problem. While I don’t agree with everything he wrote, I thought it was a reasonable and thoughtful piece. However, a lot of people are angry with him “because all Americans need health care” and presumably in their minds, Mackey believes otherwise just because he opposes the Obama plan.

There is more than one way to fix healthcare, Obamacare is just one of these ways. Saying no to Obamacare is not the same as saying no to health care reform.

Anyway, it should be fairly obvious that I’m all for reform, but I’m very much opposed to Obama’s plan because it will make things worse.

Obama’s plan will further weaken private options for healthcare. The plan would continue to operate under a model like Medicare. Medicare, on average, pays 60% of what a medical service actually costs. Health providers need to cover this loss, so they pass on the costs to private insurance and other paying customers by inflating our bills.

Since the government plan is legally allowed to pay less for services than other plans and providers are forced to treat these patients, private plans end up paying significantly more for the same services. So essentially, the government plan is heavily subsidized. This subsidy will quickly drive private health plans out of business. And then we’ll all be stuck on a single government run health plan.

And this would be an unmitigated disaster.

Now, I’ve said it before and I’ll say it again: do you really want the same people who run the DMV, airport security, IRS, the Post Office and FEMA to run your hospital?

Heck, even Obama said, “UPS and Fedex are doing just fine; it’s the Post Office that’s having problems.” That’s right, despite massive subsidies and a monopoly advantage, the Post Office is still losing money (and mail), while UPS and Fedex are profitable. That doesn’t leave me very confident about government run hospitals.

First of all, if only the government provides healthcare, it will be rationed. Don’t let anyone tell you otherwise. It’s axiomatically true that there will unlimited demand for free services. That’s just a rule of nature. When you give away something for free, you’ll run out. The only way not to run out is rationing. In every single country with a single payer system, there is rationing. It’ll be the same here.

Second, medical innovation will crawl to a halt. Innovation requires money. A public health plan, like Medicare today, doesn’t even pay enough for current technologies. It definitely won’t pay for doctors who establish new methods of care. Without this incentive and the necessary resources, innovation will suffer and so will we.

Third, new medicines and treatments that are approved for the government plan will not be judged by their merit, but instead who has the best lobbyists. If you don’t believe me, look at how companies win government contracts or how new treatments are approved by Medicare today.

Fourth, due to lack of competition, the quality of care will also be poor. If you don’t believe me, go check out a government-run VA hospital. Would you want to be treated there?

Though, maybe I’m wrong. Perhaps, Obama can deliver on his promise provide affordable, quality medical coverage for all of us.

But tell you what, if the government can provide affordable, quality medical coverage for all Americans, let them prove it first by providing it to our veterans.

Once they do that, let’s talk.