We are incessantly being told that the cost of medical care is "too high" either absolutely or as a growing percentage of our incomes. But nothing that is being proposed by the government is likely to lower those costs, and much that is being proposed is almost certain to increase the costs.
There is a fundamental difference between reducing costs and simply shifting costs around, like a pea in a shell game at a carnival. Costs are not reduced simply because you pay less at a doctor's office and more in taxes or more in insurance premiums, or more in higher prices for other goods and services that you buy, because the government has put the costs on businesses that pass those costs on to you.
Costs are not reduced simply because you don't pay them. It would undoubtedly be cheaper for me to do without the medications that keep me alive and more vigorous in my old age than people of a similar age were in generations past.
Letting old people die would undoubtedly be cheaper than keeping them alive but that does not mean that the costs have gone down. It just means that we refuse to pay the costs. Instead, we pay the consequences. There is no free lunch.
Providing free lunches to people who go to hospital emergency rooms is one of the reasons for the current high costs of medical care for others. Politicians mandating what insurance companies must cover is another free lunch that leads to higher premiums for medical insurance and fewer people who can afford it.
Despite all the demonizing of insurance companies, pharmaceutical companies or doctors for what they charge, the fundamental costs of goods and services are the costs of producing them.
If highly paid chief executives of insurance companies or pharmaceutical companies agreed to work free of charge, it would make very little difference in the cost of insurance or medications. If doctors' incomes were cut in half, that would not lower the cost of producing doctors through years of expensive training in medical schools and hospitals, nor the overhead costs of running doctors' offices.
What it would do is reduce the number of very able people who are willing to take on the high costs of a medical education when the return on that investment is greatly reduced and the aggravations of dealing with government bureaucrats are added to the burdens of the work.
Britain has had a government-run medical system for more than half a century and it has to import doctors, including some from Third World countries where the medical training may not be the best. In short, reducing doctors' income is not reducing the cost of medical care, it is refusing to pay those costs. Like other ways of refusing to pay costs, it has consequences.
Any one of us can reduce medical costs by refusing to pay them. In our own lives, we recognize the consequences. But when someone with a gift for rhetoric tells us that the government can reduce the costs without consequences, we are ready to believe in such political miracles.
There are some ways in which the real costs of medical care can be reduced but the people who are leading the charge for a government takeover of medical care are not the least bit interested in actually reducing those costs, as distinguished from shifting the costs around or just refusing to pay them.
The high costs of "defensive medicine" expensive tests, medications and procedures required to protect doctors and hospitals from ruinous lawsuits, rather than to help the patients could be reduced by not letting lawyers get away with filing frivolous lawsuits.
If a court of law determines that the claims made in such lawsuits are bogus, then those who filed those claims could be forced to reimburse those who have been sued for all their expenses, including their attorneys' fees and the lost time of people who have other things to do. But politicians who get huge campaign contributions from lawyers are not about to pass laws to do this.
Why should they, when it is so much easier just to start a political stampede with fiery rhetoric and glittering promises?
Although it is cheaper to buy a pint of milk than to buy a quart of milk, nobody considers that to be lowering the price of milk. Although it is cheaper to buy a lower quality of all sorts of goods than to buy a higher quality, nobody thinks of that as lowering the price of either lower or higher quality goods.
Yet, when it comes to medical care, there seems to be remarkably little attention paid to questions of both quantity and quality, in the rush to "bring down the cost of medical care."
There is no question that you can reduce the payments for medical care by having either a lower quantity or a lower quality of medical care. That has already been done in countries with government-run medical systems.
In the United States, the government has already reduced payments for patients on Medicare and Medicaid, with the result that some doctors no longer accept new patients with Medicare or Medicaid. That has not reduced the cost of medical care. It has reduced the availability of medical care, just as buying a pint of milk reduces the payment below what a quart of milk would cost.
Letting old people die instead of saving their lives will undoubtedly reduce medical payments considerably. But old people have that option already and seldom choose to exercise it, despite clever people who talk about a "duty to die."
A government-run system will take that decision out of the hands of the elderly or their families, and thereby "bring down the cost of medical care." A stranger's death is much easier to take, especially if you are a bureaucrat making that decision in Washington. At one time, in desperately poor societies, living on the edge of starvation, old people might be abandoned to their fate or even go off on their own to face death alone. But, in a society where huge flat-screen TVs are common, along with a thousand gadgets for amusement and entertainment, and where even most people living below the official poverty line own a car or truck, to talk about a "duty to die" so that younger people can live it up is obscene.
You can even save money by cutting down on medications to relieve pain, as is already being done in Britain's government-run medical system. You can save money by not having as many high-tech medical devices like CAT scans or MRIs, and not using the latest medications. Countries with government-run medical systems have less of all these things than the United States has.
But reducing these things is not "bringing down the cost of medical care." It is simply refusing to pay those costs and taking the consequences.
For those who live by talking points, one of their biggest talking points is that Americans do not get any longer life span than people in other Western nations by all the additional money we spend on medical care.
Like so many clever things that are said, this argument depends on confusing very different things namely, "health care" and "medical care." Medical care is a limited part of health care. What we do and don't do in the way we live our lives affects our health and our longevity, in many cases more so than what doctors can do to provide medical care.
Americans have higher rates of obesity, homicide and narcotics addiction than people in many other Western nations. There are severe limits on what doctors and medical care can do about that.
If we are serious about medical care and we should be serious, since it is a matter of life and death then we should have no time for clever statements that confuse instead of clarifying.
If we want to compare the effects of medical care, as such, in the United States with that in other countries with government-run medical systems, then we need to compare things where medical care is what matters most, such as survival rates of people with cancer. The United States has one of the highest rates of cancer survival in the world and for some cancers, the number one rate of survival.
We also lead the world in creating new life-saving pharmaceutical drugs. But all of this can change for the worse if we listen to clever people who think they should be running our lives.
One of the strongest talking points of those who want a government-run medical care system is that we simply cannot afford the high and rising costs of medical care under the current system.
First of all, what we can afford has absolutely nothing to do with the cost of producing anything. We will either pay those costs or not get the benefits. Moreover, if we cannot afford the quantity and quality of medical care that we want now, the government has no miraculous way of enabling us to afford it in the future.
If you think the government can lower medical costs by eliminating "waste, fraud and abuse," as some Washington politicians claim, the logical question is: Why haven't they done that already?
Over the years, scandal after scandal has shown waste, fraud and abuse to be rampant in Medicare and Medicaid. Why would anyone imagine that a new government medical program will do what existing government medical programs have clearly failed to do?
If we cannot afford to pay for doctors, hospitals and pharmaceutical drugs now, how can we afford to pay for doctors, hospitals and pharmaceutical drugs, in addition to a new federal bureaucracy to administer a government-run medical system? Nothing is easier for politicians than to rail against the profits of pharmaceutical companies, the pay of doctors and other things that have very little to do with the total cost of medical care, but which can arouse emotions to the point where facts don't matter. As former Congressman Dick Armey put it, "Demagoguery beats data" in politics.
Economics and politics confront the same fundamental problem: What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs when presented with prices that convey those costs. That leads to self-rationing, in the light of each individual's own circumstances and preferences.
Politics deals with the same problem by making promises that cannot be kept, or which can be kept only by creating other problems that cannot be acknowledged when the promises are made.
Price controls are a classic example. At various times and places, in countries around the world, price controls have been put on any number of goods and services going all the way back to the days of the Roman Empire and ancient Babylon.
Price controls create lower prices for open and legal transactions but also black markets where the prices are higher than they were before, because the risks of punishment for illegal activity has to be compensated. Price controls also lead to shortages and quality deterioration.
But politicians who take credit for lower prices blame all these bad consequences on others. Diocletian did this in the days of the Roman Empire, leaders of the French Revolution did this when their price controls on food led to hungry and angry people, and American politicians denounced the oil companies when price controls on gasoline led to long lines at filling stations in the 1970s. It is the same story, whatever the country, the times or the product or service.
The self-rationing that people do when prices are free to convey the inherent impossibility of any economy to supply as much as everybody wants is replaced, under price controls, with rationing imposed by government, which cannot possibly have the same knowledge of each individual's circumstances and preferences least of all when it comes to medical care, where patients differ in innumerable ways.
Here, as elsewhere, there is no free lunch even though politicians get elected by promising free lunches. A free lunch in medical care is one of the most dangerous illusions of all.
Waiting in long gasoline lines at filling stations was exasperating back in the 1970s, but waiting weeks to get an MRI to find out why you are sick, and then waiting months for an operation, as happens in countries with government-run medical systems, can be not only painful but dangerous.
You can be dead by the time they find out what is wrong with you and do something about it. But that will "bring down the cost of medical care" because you won't be around to require any.
What is so wrong with the current medical system in the United States that we are being urged to rush headlong into a new government system that we are not even supposed to understand, because this legislation is to be rushed through Congress before even the Senators and Representatives have a chance to read it?
Among the things that people complain about under the present medical care system are the costs, insurance company bureaucrats' denials of reimbursements for some treatments and the free loaders at hospital emergency rooms whose costs have to be paid by others.
Will a government-run medical system make these things better or worse? This very basic question seldom seems to get asked, much less answered.
If the government has some magic way of reducing costs rather than shifting them around, including shifting them to the next generation they have certainly not revealed that secret. The actual track record of government when it comes to costs of anything is more alarming than reassuring.
What about insurance companies denying reimbursements for treatments? Does anyone imagine that a government bureaucracy will not do that?
Moreover, the worst that an insurance company can do is refuse to pay for medication or treatment. In some countries with government-run medical systems, the government can prevent you from spending your own money to get the medication or treatment that their bureaucracy has denied you. Your choice is to leave the country or smuggle in what you need.
However appalling such a situation may be, it is perfectly consistent with elites wanting to control your life. As far as those elites are concerned, it would not be "social justice" to allow some people to get medical care that others are denied, just because some people "happen to have money."
But very few people just "happen to have money." Most people have earned money by producing something that other people wanted. But getting what you want by what you have earned, rather than by what elites will deign to allow you to have, is completely incompatible with the vision of an elite-controlled world, which they call "social justice" or other politically attractive phrases.
The "uninsured" are another big talking point for government medical insurance. But the incomes of many of the uninsured indicate that many if not most of them choose to be uninsured. Poor people can get insurance through Medicaid.
Free loading at emergency rooms mandated by government makes being uninsured a viable option.
Within living memory, most Americans had no medical insurance. Even large medical bills were paid off over a period of months or years, just as we buy big-ticket items like cars or houses.
This is not ideal for everybody or every situation. But if we are ready to rush headlong into government control of our lives every time something is not ideal, then we are not going to remain a free people very long.
Ironically, it is politicians who have already made medical insurance so expensive that many people refuse to buy it. Insurance is designed to cover risk. But politicians have mandated that insurance cover things that are not risks and that neither the buyers nor the sellers of insurance want covered.
In various states, medical insurance must cover the costs of fertility treatments, annual checkups and other things that have nothing to do with risks. What many people most want is to be insured against the risk of having their life's savings wiped out by a catastrophic illness.
But you cannot get insurance just for catastrophic illnesses when politicians keep piling on mandates that drive up the cost of the insurance. These are usually state mandates but the federal government is already promising more mandates on insurance companies which means still higher costs and higher premiums.
All this makes a farce of the notion of a "public option" that will simply provide competition to keep private insurance companies honest. What politicians can and will do is continue to drive up the cost of private insurance until it is no longer viable. A "public option" is simply a path toward a "single payer" system, a euphemism for a government monopoly.
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