Supply and Demand: Reviewing the Unbreakable Theory That Shall Doom ObamaCare in Short Order
When President Obama spoke to House Democrats the day before the House voted on his health care reform bill, he said:
I am convinced that when you go out there and you are standing tall and you are saying I believe that this is the right thing to do for my constituents and the right thing to do for America, that ultimately the truth will out.
Now that Congress has voted to approve his bill, the truth will out. We can only hope that it won’t be too late to repair all the damage that will have occurred by the time it finally does.
A topic noticeably absent from public discussions of bending the health care cost curve down has been the economics of health care supply and demand. The phrase “supply and demand” is often misunderstood. What supply and demand curves measure is the effect of price changes on quantity supplied and quantity demanded. Higher prices encourage greater quantity supplied, while lower prices encourage greater quantity demanded. A professor might illustrate this in an economics class by posing a couple of hypothetical situations.
He might say: “I want to buy a car. Right now. Is there anyone in this classroom willing to sell me theirs? I don’t care what it is.” Then the professor would make an offer. A lowball offer, maybe $100. No takers.
So the professor would start to up his bid. In the $1,000 to $5,000 range, a few hands might go up. When he gets to the $20,000 to $30,000 range, more hands go up. No surprises there. But if he continues increasing his offer there will come a point, maybe when he gets into the hundreds of thousands of dollars, where everybody in the class will have a hand in the air.
When you plot this phenomenon on the Cartesian plane, you get a line starting in the vicinity of the intersection of the X-axis, which represents quantity supplied, and the Y-axis, which represents price. The supply curve extends upward as you go from left to right — graphically illustrating that as price goes up, quantity supplied tends to go up.
The inverse is true on the demand side.
The professor might offer to sell his car to anyone in the class who is willing and able to buy it. For the sake of argument, the professor offers his 2010 Porsche Panamera which retails in the $89,800 – $132,600 range.
Offering a Porsche at anything under $10,000 is likely to have every hand in the class up in the air, since it would make wonderful sense to just buy it and flip it. As the price gets closer to $50,000, still well under the retail price, the entire class might still be willing buyers, but not all will be able buyers. Some, maybe most, won’t be able to swing it financially. And when the price gets into the suggested retail value range, if there are any takers left they will ask: “OK, so what’s in this car? Is it still a good deal at this price?” It’s not a good deal once the asking price gets above the suggested retail value, and when it gets significantly higher buying it makes no sense to even consider.
A graph of the demand curve starts in the upper left hand side where price is high and demand is low, extending downward as you go from left to right. This illustrates that as the price goes down quantity demanded goes up, since there are more people who are willing and able to buy.
The fun begins when we superimpose the supply curve over the demand curve and find an “equilibrium point” at their intersection. In a free market the price at the equilibrium point represents the value of whatever thing you’re tracking, as determined by buyers and sellers, often numbering in the millions, who have voted on it with the dollars they spend. The equilibrium point has another noteworthy characteristic: at equilibrium, quantity supplied and quantity demanded are roughly the same.
The equilibrium point tends to be a fairly accurate indication of both the value of a thing and how much of it sellers can expect to move. But that doesn’t necessarily mean everybody will by happy with that situation.
When OPEC members are unhappy with the low price of oil, they will occasionally try to influence it by agreeing to cut production. Fortunately, the oil market is competitive and OPEC members have a hard time staying in agreement. When OPEC members successfully maintain solidarity, they can be fairly effective at forcing a price change. At least in the short run, since it usually doesn’t take long for one of them to feel the pinch from reduced revenue and boost production.
In the discussion of supply and demand it is important to recognize that an OPEC production cut, which is a change in quantity supplied, does not represent movement along the quantity supplied curve. It is a shift of the entire curve. OPEC’s production cuts shift the supply curve to the left, creating a new supply curve, and along with the new supply curve we get a new equilibrium point with a higher equilibrium price and lower quantities demanded and supplied.
What we ought to be trying to achieve with health care reform is just the opposite of what OPEC does. For health care reform to have any hope of success at bending the cost curve down there must be something in it that encourages a greater supply of health care services. We need to shift the health care supply curves from left to right. Without some technological leap — which is not something that can be legislated — this means increasing the supply of doctors, nurses, medical technicians, and other providers.
It so happens, the health care reform bill just approved contains a provision for a fairly significant personnel increase. Unfortunately, it does not call for more trained medical talent.
The other thing that the price curve does is to provide incentive for innovation. If the hypothetical professor performs his exercise long enough, sooner or later somebody’s going to notice: “hey, there’s a market for a Porsche-style car for less than $60k” – and find a way to build one. I’ve seen a lot of Smart cars around here; it’s not only because they’re “ecologically friendly” but because they make since in this area: they’re good around-town commuter cars, easy to park and boasting high gas mileage.
If Carter had just let gas prices soar in the 70′s, somebody would have soon said: “hey, there’s a good market out there for high-mileage/alternative fuel cars, let’s go make one”. Government price controls only stifled innovation. Similarly, the reason that the U.S. has the best medical care in the world ultimately results from the fact that we’re willing to pay for it, and companies can make money providing it.
A marvelously clear explanation of Econ 101 – Micro. Congratulations. Supply side rationing in medical care is ugly. I’ve lived it in Canada and the UK. Dare we introduce the concept of elasticity / inelasticity of demand for this good?
There are two major differences between the price controls of the 1970′s and Obamacare.
First, nobody died because they had to wait in line for gas. Lots of people are going to die waiting for medical care especially seniors. In part that is what the bill is all about. The goal is to reduce life expectancy and save money on both Medicare and social security.
The second major difference and ultimately the most important is the intensive human capital required to sustain our current level of medical care. It takes 8-12 years of training to become doctor. Obamacare will reduce the expected income of future doctors and fewer people will go into the field. It will induce late baby boomer physicians to retire early. This bill reduces the supply of doctors both now and in the future.
It will also reduce the profitability of developing new drugs and treatments. Any new procedure or pharmaceutical will have to pass the gauntlet of the comparative effectiveness test. Drug companies will shut down their US R&D operations and move elsewhere just like the Canadians and the Europeans did. People will stop going into those fields because there will be no jobs in the United States.
This bill destroys the accumulated physical and human capital associated with medical care. If the bill is not repealed or neutered in the next three years our medical system will irrevocably damaged and hundreds of thousands of will die every year that previously survived as our cancer survival rates fall to European levels.
Tom, your analysis is almost always flawless, but this time you’ve missed a very crucial element.
The analogies your fictional professor uses to explain supply and demand assume a very critical phenomenon: a direct economic relationship between provider and consumer. That relationship is what makes the S/D theory work. Relentlessly.
Thus, in every commodity market where the basic necessities of life are provided and consumed, price is kept relatively affordable because of this relationship and the subsequent tendency for supply and demand to reach an equilibrium.
The single exception to this rule is health care, where costs have skyrocketed for decades at varying multiples of inflation – every phase of which tracks perfectly with intentional government meddling in the health care market. The reason? Innovation? No – all other sectors of the economy have seen at least as explosive innovation, and the cost-per-improvement has typically gone down, not up. Regulation? Nope – most other commodity sectors are just as over-regulated as health care.
The one and only difference has been staring us in the face for decades. But because we have come to conflate health CARE and health care INSURANCE so blindly, we simply can’t see it. The reason is that with health care there is NO economic relationship between provider and consumer; it’s a brokered market where all price negotiation is mediated (and, in practice, controlled) by the accidental cartel of comprehensive group health care insurance companies. These companies essentially form a proxy monopoly, controlling both the price of and access to health care. Meanwhile, the consumer never has any clue what the goods and services cost, nor is there any incentive whatsoever for him to care BECAUSE the insurance company issues a NO-LIMIT HEALTH CARE CREDIT CARD (aka ‘insurance card’). Both patient and doctor are encouraged to over-consume as a result of this arrangement – “insurance will cover it” – artificially driving up both the cost and price of health care overall.
The problem is this: INSURANCE IS A TOOL FOR MITIGATING FINANCIAL RISK. It was never intended to be used as a payment scheme for large-scale funding of the basic necessities of life, like routine health care. Abusing insurance in that way has destroyed the economic relationship between provider and consumer, destroying with it almost all downward pressure on price. So the professor’s analogies simply do not apply here.
Worse, abuse of insurance has resulted in an economy where we “spread the costs around” (sound familiar?), i.e., price is actually encouraged to increase because the market resources – 100 people paying group premiums – are being used to pay for health care consumed by only a subset of that market. Since commodity prices are like a gas, and expand to fit the resources of the space they’re in, the collectivizing aspect of group insurance – when applied to large-scale, commodity consumption – distorts that space to make it appear much larger than it really is. The inevitable result is exactly what we’ve seen since the early ’70s, when the use of comprehensive, group policies became a federal mandate: skyrocketing health care costs.
All of this is to say that increasing the Supply in this broken market – i.e., “increasing the supply of doctors, nurses, medical technicians, and other providers” – will do NOTHING to bring down price, or overall cost. The critical aspect of the supply/demand mechanism required to do that – a direct economic relationship between provider and consumer – doesn’t exist.
Meanwhile, it’s true: adding 32 million new consumers with NO-LIMIT HEALTH CARE CREDIT CARDS (aka “insurance cards”) will absolutely increase demand and, therefore, price – or, at least, overall cost. In effect the mechanism at work there is hardly different from the phenomenon which artificially added millions of previously unqualified buyers to the housing market, through Taxpayer-backed, “affordable mortgages”. That phenomenon, combined with artificially low interest rates that were counter to market realities, led to the housing bubble and, eventually, to the credit meltdown in 2008. We will see the same in health care… until it, too, melts down completely.
Great article, but I am afraid even the simple demand/supply curves will not be able to overcome the bias of the politics. Economic reasoning will not work, and this “model” doesn’t fit the real intent of the Left Wing of the Democratic party.
I am completely convinced that the desired results of health care reform do not derive from the goodness of the heart or love for their fellow man, but to acquire power – to create another dependency that will ensure large groups of dependable voting blocs for years to come. And I use social security and Medicare as prime examples for my proof.
When I hear of the successes of SS and Medicare, I ask for whom? No doubt that they’ve been a real boon to those that received it first and possibly receive it now. But what about when the funds aren’t there? The politicians that established the scheme are long gone, the main benefactors will have passed, yet the succeeding generations are stuck with the bill. And yet, even those who will get the biggest screwing are so indoctrinated with the propaganda, they too will brag of the successes. Doubt me, talk to a typical new college graduate about “wonderful” government programs. It’s as if manna from heaven.
We might be able to stop this, maybe at the very least delay it, but I am afraid that the excesses of 50 years ago have already caught up – and our days are numbered for life as we have known it.
Hope I am wrong.
When the economy collaspses in the near future and a new government restores some semblance of sanity, it should consider repealing the 19 th amendment to the constitution.
The children killed by federally funded abortion and the elderly that have to pass through the death panels will not be in any line.
Vote in November: NO demomarxist elected, not one.
Goy, excellent post. The best I’ve seen on PJM.
Being I was just in medical school as a second career and came from the corporate world, I feel like I have a pretty good idea of what is required and what I perceive the limitations. I will tell you that the current situation finally convinced me the pursuit a mistake considering my age. I left before completion.
I do wonder if people realize that even for the least specialized of practices, there are a minimum of 11 years of education required before one receives a real paycheck, the typical M.D. degree in conjunction with four years of undergrad will cost approximately $300-400K, and that only about 3-5% of college graduates deemed capable of the handling the curriculum?
So if we place price controls on the salaries of the doctors, if we add the additional burden of government approvals for patient care which already frustrates physicians, many whom have left the practice for that very reason, and if consideration given to being highly indebted in starting a career, I am puzzled how do we propose to provide the incentive to attract the best and brightest to the practice?
By lowering the standards of the practice? Anybody feel comfortable utilizing that model when they are serving your loved ones?
I am having second thoughts about my own daughter currently being in med school, and if I gave her really bad advice.
Tex:
It effects more then doctors. It will reduce salaries and opportunities for those in supporting fields as well. This bill will kill the drug industry as far as R&D goes. Where will new drugs and treatments come from?
My son was planning a career in pharmacology but we won’t be doing much drug research domesticly in the future. It turns out that his decision to have a double major in Chemistry might be the right one in the end. There are a lot things that an organic chemist can do besides drug research.
@7. Tex Taylor: – … there are a minimum of 11 years of education required before one receives a real paycheck, the typical M.D. degree in conjunction with four years of undergrad will cost approximately $300-400K, and that only about 3-5% of college graduates deemed capable of the handling the curriculum?
Interestingly, much of this is driven by the exorbitant salaries specialists have come to be able to demand (see p. 3) under the current broken market, where there is literally NO downward pressure on price.
Extended years of education are required for a specialty, and that becomes the default because specialists are more highly-compensated. Plus, as the cost of education has increased – because the graduate will be able to afford it – the quality of that education has substantially decreased. And Tom’s absolutely right about one thing: wage and price controls intended to “correct” this are functionally equivalent to trying to push a rope. Price has to come down at the other end, by reinstating a functional, free market for health care and allowing that market to determine the equilibrium point. We haven’t had that since the feds passed Medicare. And it’s something this administration and this Congress – dead set as they are on controlling ALL economic activity – will never allow.
It’s the Law of Supply & Demand, not the theory. You can’t find a single exception to it only actions that delayed it for a while. Goy is absoulely right that providers of medical care being isolated from the consumers is the root of the problem.
When the government can dictate can refust to pay more than the actual cost of care and insurance companies can make all sorts of deals with providers to isolate themselves from the real cost of delivering care, it’s all just a racket where providers lose money one year due to the fixed prices, and make it up the next by making up their losses on things that haven’t yet been negotiated. Add to that the horrible defensive practices forced on providers, and you can’t argue that the market failed, if anything, you have proof that ignoring supply and demand drives prices up.
Regards
Yeah, and then came 85 and the oil price crash when prices reverted to 5 dollars a barrel. All those synthetic oil production schemes in Canada and the US closed shop. Some how I don’t expect Doc in the boxes to be charging five dollars for physicals and 50 dollars for a cat scan, but anything is possible when fee for service medicine ends. I guess the doctors will pretend to be physicians and we’ll pretend to pay them, but I’m sure the political elite will get gold plated health care.
You spout white oppressor gibberish. You are a racist bigot.
@12. don: – I guess the doctors will pretend to be physicians and we’ll pretend to pay them, but I’m sure the political elite will get gold plated health care.
That may very well be the most likely scenario, given economic reality and recent experience.
Goy,
One of my biggest complaints during the pursuit was the exorbitant salary differential say between internal medicine and specialists. It was my opinion there wasn’t that much difference in talents from individuals (there is real truth that everyone arrives an “A” student in med school; a humbling personal experience), yet salary differentiation says otherwise. It certainly wasn’t rocket science was medical students generally tend to pursue specialties, considering the cost.
Do you or the author have a suggestion for increasing the number of family practice physicians? I’d be interested in your opinion and realize that they’ll allow me about one personal question before booting me to oblivion
tdiinva
Congratulations – smart kid as there is nothing easy about organic chemistry, and I’m happy for both you and your son. Still, if it was his wish to practice pharmacology, it saddens me that because of our “broken system”, he won’t get to pursue his first wish. Hopefully, he will find satisfaction is whatever he chooses.
Excellent analysis, goy. I’ve said the same thing that you have, except in shorter form: unless and until you put the price tags back on the items that people are consuming and tell them that they need to pay, then no amount of reform is going to fix our problem. You are also correct that just increasing the supply of services and service providers isn’t going to do much of a thing. The only true reform is one where we gradually put the patient back in charge and have the doctors be accountable to patients and not to insurance companies or (and especially) the government.
Tex Taylor @ #5 said:
“I am completely convinced that the desired results of health care reform do not derive from the goodness of the heart or love for their fellow man, but to acquire power – to create another dependency that will ensure large groups of dependable voting blocs for years to come.”
While I agree with the overall point, I must add a caveat. I genuinely believe that many of layfolk believe that having the government provide healthcare, in whatever form, is good. They honestly think that when the government provides healthcare it will relieve them of their burden of having to care for a loved one and they’ll be able to go on about living their lives uninterrupted. You and I and most everyone here knows that is wrong, but being wrong is not the same as wanting power.
However, where I wholeheartedly would agree with the above statement is when it comes to the pols at all levels. The pols only care about justifying their own existence and the means with which to carry that out is by offering people benefits for free and then taxing someone else to pay for them. For the pols it IS all about power and even though some GOP’ers will disagree, the GOP even falls victim to it. This will not stop until the American people begin to believe again that only they can provide for themselves and EVERYTHING the government says it will do for the citizen is completely ephemeral and based on falsehoods in the aggregate.
This is great, but the underlying problem is that Obamacare has nothing to do with health care. It’s sole purpose is to increase the power and scope of the federal government. From that standpoint, it is a magnificent success.
“Do you or the author have a suggestion for increasing the number of family practice physicians?”
Primary care doctors incomes are effectively controlled by Medicare payments — held down by the govt. to save money. Being a PCP these days is madness. The effort it takes to do a good job is too great for the money we’re paid.
Last time I checked, only 2% of US medical grads go into primary care. And 50% of internal medicine doctors in training are Foreign Medical Graduates.
I haven’t had health care since 2007 when my job went from the USA to India. Due to my health conditions, in order to buy a private policy it would cost $1000 a month with a $5000 deductible. Not too attractive so I do not have a health policy. With the health care reform, it is not going to help me and I am sure it will not help alot of other people. Fortunately for me I am a year away from Medicare. I am sure there are alot of family’s with the bread winner in his 30′s or 40′s who are not insured. They have a lot bigger problem than I do. Thanks Mr President……..for nothing.
@15. Tex Taylor: – Do you or the author have a suggestion for increasing the number of family practice physicians?
I don’t know about the author, but I can speak from my wife’s experience as a psychotherapist. She doesn’t even consider accepting insurance. Now in her case the reasons are mostly outside the financial realm (e.g., having to do with the spectacular failures of HIPAA to really protect ANYONE’s health information), but it completely changes one’s business model, as it were. That choice changes which patient she sees (and doesn’t), her motivation, treatment approach, the time she can reasonably spend with patients, etc. She doesn’t need to worry about a meaningless licensure (required for insurance reimbursement, at least in our State) and she can choose professional standards of care that make sense to her (insurance organizations typically hew solely to the APA’s politically-motivated “standards” which, in turn, are driven largely by the pharmaceutical companies’ goal to medicate every individual on the planet, at Taxpayer expense). So ultimately, I think the answer comes down to UNDO-ing this pervasive mindset that health care and health care insurance are one and the same.
In a free health care market, where prices of routine health care are determined by agreement between provider and consumer – and not some bureaucrat or actuary in an insurance company cubicle – med. schools could NOT demand such ridiculously high tuitions and fees. They would be pricing themselves out of the market. Also, those going into medicine wouldn’t feel compelled to push for a specialty just so they could land a salary that gave them a slim chance of repaying their school loans by the time they retire. I think that would be enough right there. Again, IMHO, the answer lies in restoring the free market for health care.
I firmly believe there are (still) plenty of people who want to go into medicine, but because the liability exposure (which the feds adamantly refuse to address), debt exposure and hassles of dealing with insurance companies and Medicare are just so overwhelming, anyone who thinks things through has to really, REALLY want to become a doctor.
.
@16. Chris Bolts Sr.: Excellent analysis, goy. I’ve said the same thing that you have, except in shorter form: …
I try to be thorough. Plus I type 110wpm, which doesn’t help in the brevity department.
- … have the doctors be accountable to patients and not to insurance companies or (and especially) the government.
IMHO – within the constraints of the law, of course – I think the patient is the one and only person a doctor should ever be accountable to. Not ambulance chasers, insurance companies, government or even administrators. Furthermore, I think most doctors WANT to be held accountable by their patient (and vice versa) – at least those who go into the field because they see it as a fulfilling career and not just a lucrative one.
Goy, you make an excellent point that health care consumers are insulated from the actual costs of health care by insurance. This has the effect of distorting demand, increasing it, since insurance companies have something of a vested interest in higher medical costs. Would we need insurance without those higher costs?
That said, I disagree with your statement that increasing the supply of medical talent “will do NOTHING to bring down price, or overall cost. The critical aspect of the supply/demand mechanism required to do that – a direct economic relationship between provider and consumer – doesn’t exist.”
Just because there is no direct relationship to the health care receiver, doesn’t mean there isn’t a consumer in the picture. Though the demand curve might look different for a insurance company than it will for an individual, there’s still a demand curve, and there’s still a supply curve, and increasing supply will still tend to lower costs. It just won’t be as much as we might like.
Putting the health care decisions back in the hands of consumers is another of those things that we have to do to get control of rising costs, and we can do that by promoting health savings accounts as an alternative to insurance for routine health care.
But that’s another story.
If you can’t beat ‘em, join ‘em. Time to buy a black shirt and start shouting ‘down with capitalism.’ The fascists are in.
Or on the other hand you could vote Republican and buy ammunition. I think the Libertarian talking point that there’s no difference between (D) and (R) has now been conclusively disproved. The GOP spent the 12 years it had the House with razor-thin margins, and never had a real working majority in the Senate. There were always the RINOs in the way, and compromise was always necessary to get anything at all done, from tax cuts to earmarks to combat pay. I consider myself only in a temporary alliance with the GOP so long as they suit my purposes, but it cannot be denied that what we see now would never have happened if they had kept more seats.
Still a good idea to have the extra ammo though. As most of us start paying the $750 penalty instead of buying $5k/year insurance, they’ll have to start rounding us up for reeducation. Hopefully they’ll use new Mental Hygiene Police (aka IRS Health Care Enforcers) instead of locals, so you won’t have to feel guilty shooting at them. Anybody who takes one of those 16,000 jobs is an enemy of all humanity.
So with all this income that the Government is going to collect from We the People . . . where do you think it is going to go? Is it going in a big box under the bed in the White House . . . or maybe into the “General Fund” . . . what are the restrictions now on pilfering the money . . . we will get a bankrupt program for sure.
Seriously, does the bill address where the money is going? (PS; Just to damned lazy to read the 2600 pages . .. I think I will run for Congress!!!)
Dr. Smith,
Interestingly, when I left corporate America with a decent job seven years ago, the only two people to question my sanity were my mother and my primary care physician. Even the wife gave approval. I wish I had the sense to listen to mom and your partner in practice. I will tell you I was somewhat disappointed with the mindset of medical school students, though overall I enjoyed the experience.
I shall forward that information to my daughter, doctor in waiting. I hope she demonstrates better sense than her old man.
Jim Wilson @ 23 said:
“I think the Libertarian talking point that there’s no difference between (D) and (R) has now been conclusively disproved.”
I am by far not a libertarian, however, I think this talking point has merit. Standing against a social takeover of the system is one thing: allowing it to take root is another. By the way, it was the GOP that took a stand against this in the first place. Were it not for the angry reaction seen at the town halls the GOP would not have stood against it. And to add insult to injury, looking at Bob Corker on “America’s Newsroom” say that there are some good things in the bill kinda makes it hard to stand against a blatantly bad bill.
I will be interested to see how the GOP respond over the coming years.
Chris Bolts Sr.,
You are correct. I was speaking strictly of the elected representatives that hold the keys to power. I should have been more specific.
Obama’s right-hand man Rahm Emanuel’s older brother, Ezekiel Emanuel, is Obama’s health policy advisor is a euthanasia advocate. Worse than Jack Kevorkian, because Jack’s motive was “mercy.” Zeke, however, limits medical coverage for the the elderly and disabled to serve the common good! Not quite like it was in Nazi Germany, where they murdered them outright, but close. Obamacare’s cruel, draconian cuts to Medicare and Medicare Advantage for the common good will before long result in a grisly death toll among the elderly in America, in numbers to rival even the Holocaust.
goy
Plus I type 110wpm, which doesn’t help in the brevity department
LOL, I know exactly how you feel. Since I read pretty fast, I hadn’t noticed your posts were all that long anyway. Like you say, just thorough.
Regards
@22. Tom: … there’s still a supply curve, and increasing supply will still tend to lower costs. It just won’t be as much as we might like.
I would have to disagree, and my reason is simple: insurance companies in no way consume health care as a part of their business model. They may consume other goods and services – like computers, office space, etc. – but they do not function as a consumer in the health care market. In that market they do only three things: “negotiate” price in place of (N.B. – not on behalf of) the consumer, pass cash between provider and consumer, and add their own staggering burden to the overall cost of health care (N.B. again – that burden is NOT just their profits). Therefore, there is no aspect of the S/D Law in which they play a normative part. Their part, rather, is 100% distortional.
First, comprehensive, group health care insurance encourages health care consumption. And I would add, over-consumption. RAND determined this decades ago. This artificially increases demand and, with it (per the S/D curve), price.
When “insurance will cover it,” hardly a second thought is given to trotting off to the ER or doctor for a flu that will otherwise blow itself out in a week, or to questioning the need for those extra blood tests, pain meds or X-Rays during a hospital stay. When “insurance will cover it,” little thought at all is given to accepting an Rx for a $150/mo. “sleep aid” (e.g., Lunesta – one of the most widely D-T-C advertised drugs). Same for a costly antidepressant (e.g., in place of, say, physical exercise or ongoing psychotherapy which must be largely paid for out-of-pocket). Same holds true for questioning the prescription of a statin to arbitrarily and artificially lower one’s cholesterol, even though no causal connection exists between cholesterol and heart disease.
Also, when “insurance will cover it,” there is little to argue against a doctor practicing “defensive medicine” – especially in the face of potentially crushing liability made possible by gutless politicians who refuse to address tort issues. “Legally advisable” care is just as easily justified, if “insurance will cover it” and it poses no additional financial burden on the patient or the provider, as medically necessary care.
Meanwhile, prices for these goods and services continually rise – due to the artificial increase in demand created by over-consumption – simply because they can. There is minimal downward pressure on price increases; they are almost universally absorbed rather than suppressed. Witness Anthem’s recent 40% hike in rates. This is the norm, over time, and it’s made possible largely because of the collectivizing quality of group insurance.
So, insurance companies maintain a unique position as broker and quasi-monopolistic player controlling both access and price. Rather than acting as consumer in a S/D scenario, insurance companies encourage BOTH increased demand AND increased price. In that regard, they incite health care costs to literally break the Law of Supply and Demand. And that is directly reflected in the aberrant, skyrocketing rate of health care cost increases we’ve witness these last 4 decades.
Carl:
A Nazi-like euthanasia policy follows directly from Ezekiel Emanuel’s ordering of the medical system. It won’t happen by direct government diktat but it will gradually creep in to the system. Why keep a cancer victim alive for a year if you are not going to offer effective treatment. Like the Netherlands, doctors will take the step on their own and then it will be validated by the government later.
Emanuel shows a psychological pathology known as identification with the oppressor. He whole life model of medical care comes right out of the Nazi playbook where useless feeders need to be eliminated for their own and society’s good. Like many Jews who are wedded to socialism, he thinks if acts like a Nazi then he will be held in esteem by the anti-Semite. There have been many neo-Nazis who have been unmasked as Jews when the light of publicity has shown on them. The leader of the neo-Nazi group that marched in Skokie, Illinois in the 1970′s was one prime example. Ezekiel Emanuel sees himself as someone like Joseph Mengele and as such he is unfit to hold a medical license.
The other side of the supply/demand curve is if and when medical professionals quit because of the inevitable bureaucratic and paper work crush; audits of medical necessity by non-medical federal employees, punitive measures for cost control, litigation, litigation, litigation. What doctor would want to work in the atmosphere of state service and charity by bayonet?
Another increase, potential imbalance, of the supply curve is free medical service to that famous 30 million uninsured.(How did they derive this number?) The potential for shear abuse of the system is enormous. Offer free beer and you get drunks, offer free surgery and there will be a load of cut ups. Obesity can be offset with liposuction, for example, at tax payer expense.
Was there ever a government mega-program that did not have cost over runs?
Many Americans have no idea the calamity they’ve let loose among themselves through the nefarious dealings and deceptions by the Demon-cratic party under the guise of altrusim for the “public benefit” via the high-jacking of the health care system into the control and ‘oversight’ of Government.
#4 Goy. There is another way to summarize your remarks about the past mis-use of medical insurance. The US Government has consistently planned against competition instead of planningfor competition. in the provision of medical services.
goy, I agree with your #4. Specifically: Insurance is a tool for mitigating financial risk. Were health insurance truly “insurance” then we would be paying for catastrophic health only. The high deductible plan was, I think, an attempt to change the consumer mindset to recognize this truth, but the employer sponsered health savings account pretty much prevented it from having an impact.
@34. westerncanadian: – The US Government has consistently planned against competition instead of planningfor competition. in the provision of medical services.
If by this you mean that the government has worked actively to suppress health care provider competition, I would completely agree. That’s something that has been lobbied by the AMA since back in the days when they originally supported the formation of BCBS. I discussed that a bit years ago here.
Many conservatives support the ludicrous idea that if we allow insurance companies to compete across State lines, that this will somehow make health care providers competitive and thus bring health care costs down. It may bring premiums down nominally, but it will do nothing to control skyrocketing health care costs, which are the real problem.
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@35. spastictoad: – The high deductible plan was, I think, an attempt to change the consumer mindset to recognize this truth, but the employer sponsered health savings account pretty much prevented it from having an impact.
Actually, so-called “catastrophic” plans – high-deductible / low-premium plans – were the earliest type of health care insurance. They were essentially created to fill a market need for a risk management tool that would prevent financial ruin in the case of catastrophic illness or injury. So, strictly speaking, they were a response by the free market to a genuine consumer need at a time when ALL health care was paid for directly, out-of-pocket.
Furthermore, any kind of health savings account would work synergistically with a high-deductible / low-premium plan. The idea is to subsidize health savings (through tax incentives) and use that savings to pay directly for health care services and goods. This will re-establish an economic relationship between provider and consumer.
Incidentally, this will also have a HUGE impact on our economy. Right now credit is still very tight because banks have to borrow in order to lend. Borrowing from the government is now, let’s say, not the best business move. Increased savings held by banks gives them a reserve from which to lend, which would have an enormously positive effect on business growth, job creation, increased standard of living, etc.
Anyway, high-deductible / low-premium plans, coupled with an HSA would actually be the ideal, and that’s a facet of both my suggestions and Paul Ryan’s recent Roadmap. Perhaps you meant “employer sponsored health care insurance“? That definitely had a disruptive impact on the more sane use of “catastrophic” plans – it essentially made them unnecessary because federally subsidized, employer-provided comprehensive plans cover from the very first dollar spent.
The problem is this: Americans have allowed themselves to become addicted to ostensibly “free” health care, where they’re handed a NO-LIMIT HEALTH CARE CREDIT CARD (aka ‘insurance card) and the only actual money that ever leaves their wallet is the nominal co-pay they may or may not shell out at a doctor’s office or pharmacy. That co-pay has absolutely no relationship to the value of the health care consumed. All other costs for the system we have now are completely hidden in the form of employer-paid premiums, payroll deductions the employee never sees, etc. This addiction was not by accident. It’s a result of social engineering that’s been going on since Medicare was created.
The closer this thing comes to full fruition, we will begun to have seen how many health insurance companies choose to leave the business entirely rather than play the government’s rigged game for little or no profit. Those who do stay in the game will offer fewer choices to consumers for drastically higher prices due to federal coverage mandates. Those who can afford it will pay through the nose and be taxed on top of that. Those who can’t will fall into Medicaid.
At that point, single-payer will be presented as the fix to a lack of insurance supply and Obama gets what he’s wanted all along.
At that point, single-payer will be presented as the fix to a lack of insurance supply and Obama gets what he’s wanted all along.
I’m stubborn, I think control of the assets the Insurance companies control is what he wanted all along even more than the direct control over people. Unless it’s changed dramatically in the past couple of years, Insurance companies control a huge amount of stocks and bonds which gives them an awfully big say so in how the companies they hold are run, often, the deciding say so. You described exactly how those companies could go out of business, but since it’s a regulated industry, Barry can take it over the same way he took over GM and when he does, he controls an awfully lot of other things without ever going after any of the directly.
Regards
While I do agree with your theory re: Obamacare, your classroom example is flawed for several reasons: 1. It’s a closed demand market (the students), with 2. A seller limited to the number of cars he has already acquired with no ability to manufacture more. When the professor offers a car for sale, you do not take into consideration whether he has other cars he would be willing to sell, or whether he has the ability to acquire other cars, either by manufacturing them, or buying them from others not in the class. If the car the professor is selling is the only one he has, and the students have zero cars, it changes the whole equation. If the students have an unlimited number of cars, regardless of whether they’re Porsches, that has a bearing on how much they’d be willing to pay. Plus, the prices quoted seem to take into account the “suggested retail value range,” which presumably, factors in the entire external market, not just the students in the class.
While I certainly understand and appreciate the example, it’s artificial, simplistic, and fails to take into account many other things that affect supply and demand, just as Obamacare does. In the end, Obamacare will fail, b/c it stretches the supply too thin and pushes the demand too high, not to mention other factors as other posters have done, one example being that people may think they’re off the hook on taking care of Grandma, and just stick her in a nursing home – with little or no negative effect on Grandma’s bank account (i.e. their inheritance). Another factor is whether doctors be willing to work extraordinary hours for pittance govt. fees, or will they only provide services to those who are willing and able to pay higher (market) fees, black market or otherwise. The siren song of Obamacare is a pipe dream – alluring but never to be reached.
@36 Goy. Yes I mean they have worked to suppress competition. In fact they have worked to create a monopolistic system. Of course in Canada, our government simply eliminated all forms of competition by creating a Government monopoly.
The standard statist argument is that modern society and modern medicine are so complicated that free competition won’t work. Only central planning will be able to deal with the complexity.
The flaw in the central planning argument is that this very complexity cannot be effectively co-ordinated by conscious control of state agents. All the details of the changes constantly affecting the conditions of supply and demand in medical services can only be efficiently co-ordinated by the price system operating under free competition.
This doesn’t mean that only an uncaring, jungle law system will work. Things like providing care for people with pre-existing conditions can be taken care of as long as every provider in the system is working under the same set of rules. Providing “social justice” rules doesn’t exclude competition. It just means that the system won’t be as cost efficient as it could be. If people believe that the social benefit outweighs the cost then go with some agreed-upon social justice rules, but make sure that they apply equally to all the providers.
@36 Goy. I forgot this part of my elevator speech. The other part of a competitive system is that the consumers must all have equal access to the market. That means relying on employer paid plans is a goofy idea. Universal access to the services by individuals is a necessary condition. Insurance plans should be bought by individuals or families. That way medical insurance would be completely portable and people wouldn’t be afraid to move around the country to find employment. Strike that – it would be true if the housing market hadn’t been grotesquely distorted by the social engineering army.
@ 31 tdiinva
Thanks for a fascinating psychological profile.
I wouldn’t be surprised if big-brother Ezekiel’s mentality is a form of post-Holocaust trauma, but if true, it makes him a victim according to today’s “abuse-excuse” criteria, and let’s him off the hook.
Whatever the case may be, he, his kid brother, their boss, his czars, advisors, mentors, and the rest of that dysfunctional retinue in the White House now are purposefully, assiduously up to no good.
My theory is that (unless we can wreck ObamaCare) the government will begin training physician’s assistants on the taxpayers’ dime and the closest thing to a doctor most of us will ever see will be a unionized government worker otherwise known as the dull-eyed physician’s assistant. Doctors? We don’t need no stinking doctors. But we sure as the devil will need more undertakers.
I want to join the conversation, but I have to go to work. Instead, I’ll share this piece I wrote last night. It’s related, in a way, because it’s about the obamacare world.
what happens if obamacare comes to pass?
As a long-term cyberpunk junkie, I have often had occasion to wonder about what could set up a situation where Gibson’s black market surgeries as described in Neuromancer could come to be. And then, while walking to work this morning in the aftermath of the passage of obamacare, it hit me: a world-wide system of government-run health care system. Why? I realized that, historically, when government tightly controls an economy, a black market organically arises. Think Cold War era USSR and even modern-day Cuba. Control the health care economy and a black market in health care will naturally arise and, presto!, in the gaps between the government systems we end up with the societal backdrop of Gibson’s thrilling cyberpunk genre.
Putting on my fortune teller’s hat: taken as a given is that a black market in health care will arise, what form will it take? More importantly, though, is who is going to regulate it? NOBODY, that’s who. It’s a black market! By definition black markets exist outside the law. When it comes to health care, one can be certain that those who are able to pay for ANYTHING will be able to get it.
There will be a surfeit of talent as those health care practitioners disgusted by obamacare’s infringement on their liberty drop out, removing their skills from the government health care industry. But not from the market. Some will retire, others will find ways to continue their work. Some will find legitimate footing in the new environment and the others, well, the others will do what they must.
Later, dystopia fully realized, the economy stagnates in the deeper, second dip of the CRA-induced-housing-market-collapse-caused recession, and serious hard times have settled in. Some of these practitioners will find that they are not as well-off as they perhaps thought they were. They will look to returning their services. But they are still disgusted by obamacare, so what do they do? Some will bite the bullet and return to the system, beaten but not broken, as slaves. Others will look into the black markets, offering their skills to those able to exploit them.
Ironically, the black market will be, in fact, a free market. And all of it illegal. Sadly, all of it preventable.
Sadder and scarier still are some of the implications. Once governance is removed, and in a black market there is no governance BY DEFINITION, there is no limit to what can be done by those with the skills and lack of moral constraints when unlimited resources are unleashed under the direction of a person dedicated to his goal. Imagine what could happen if an evil genius teamed up equally alienated plastic surgeons, neurosurgeons and biomechanical engineers in an environment devoid of constraints. And tasked them with anything. Since there are no constraints, why not throw in a bioweapons expert.
Okay, scratch the bioweapons guy. Such a combination driven by a beneficent leader could produce enormous breakthroughs when relieved of all constraints on their development. Most of the man/machine interface gear described by Gibson and others in the genre could come to fruition under such a scenario. With the “privatization” of the space effort that preceded obamacare a lot of specialists in esoteric fields will suddenly be cut free from the umbilicus of big government and hungry to continue their work. Or related work. Personally, I’d love a neural interface with my Macintosh. I can forsee a whole population who would be interested in “upgrading” their physiques. Surgical steel bones, anyone? Video cameras for eyes?
Add back in the bioweapons guy and make the leader malevolent.
In the background the impending singularity lurks.
Nanotechnology, now about 15 years old, is beginning to produce viable technology. Results from early CERN experiments yield profound quantum understanding, unleashing a wave of new technologies as transformational as the transistor. Computer technology continues advancing according to Moore’s Law, basically doubling in power every two years or so. All have obvious off-shoot technologies in the health care field. Nano-probes. Quantum fields. Advanced “expert systems” (“artificial intelligence”-based computer systems).
The singularity marks the date when we remove the quotation marks from “artificial intelligence.” How many times more need computing power double before the quotation marks are a thing of the past?
obamacare has all but set up the scenario where the onset of the singularity will occur in the black market, the health care black market to be specific. A lawless environment where all constraints are off.
Forget about the issues of how such an intelligence would be treated were it to come into being as the result of a black market operation. Forget about the philosophical questions of “life” and the societal questions arising from having a sentience other than human amongst us. Think instead about how it could be used against us.
Introducing a new, non-human sentience into the world in an environment that is outside the boundaries of legitimate control is preventible. obamacare must be expunged and proper oversight off quickly technologies instituted.
Gee, that’s a sad thought.
My advise to anyone here in the USSA is to practice good health habits because if you don’t you could become Soilent Green.
@40. westerncanadian: – In fact they have worked to create a monopolistic system.
I have to agree. Whether intentional or not, the accidental cartel of health insurance companies spawned by decades of government meddling in health care forms the equivalent of a monopoly (by proxy, if you will). That monopoly controls the price of health care, access to it, and virtually all transactions for it. This monopoly includes the government here in the USA too, at least inasmuch as Medicare is one of the largest “insurers” (read: wealth redistributors, since it’s not managing risk, per se, but rather confiscating my income to pay for some retiree’s health care) and has the highest claim rejection rate of all insurers.
- Of course in Canada, our government simply eliminated all forms of competition by creating a Government monopoly.
Japan did effectively the same thing. The result: the Japanese over-consume health care at a rate FOUR TIMES HIGHER than Americans, and it’s overwhelming their system. In Japan, health care prices are set by the government and neither insurance companies nor health care providers are allowed to compete. As such, the government controls ALL economic activity in the health care sector (read: straight-up Socialism). That’s been the Democrats’ endgame here in the USA since Medicare was passed. When socialists use the apples-to-oranges method to compare Japan’s and America’s systems, they always claim that the Japanese get “better” health care (i.e., they see doctors more often, which is a code phrase for ‘they over-consume’) and that it’s “cheaper”. They of course leave out the detail about the cost being artificially suppressed by socialist price controls and the fact that Japanese diet and lifestyle makes the very homogeneous Japanese society nominally healthier than Americans in the first place.
The socialists also leave out the detail that the Japanese system is presently failing, as their population ages and as both the system and Japanese health care providers become overwhelmed by over-consumption, artificially suppressed prices and a stagnating economy. Meanwhile it has helped to drive Japan’s public Debt-to-GDP ratio to almost 200% – second only to Zimbabwe’s.
As our own economy continues to stagnate, like Japan’s, our population ages, like Japan’s, our debt continues to skyrocket, approaching Japan’s, and inflation becomes a factor in response to the deteriorating US bond rating, we can look to Japan as a model if we want to know how the Democrats’ socialized medicine policies will work out here. The word meltdown is as good as any.
- The standard statist argument is that … [o]nly central planning will be able to deal with the complexity.
I don’t know… since collectivism and statism were debunked as viable ideologies, decades ago (at great human cost), the standard statist argument I encounter these days boils down to: “Shut Up!”
- This doesn’t mean that only an uncaring, jungle law system will work.
Back when health care consumers had a direct economic relationship with providers, the cost of routine health care was relatively affordable, just like every other commodity. This meant that community organizations, charities and local welfare programs could easily handle the cost of health care for the truly needy. And by truly needy, I’m of course NOT referring to the congenitally and/or pathologically dependent classes who being supported by Taxpayer dollars today as a way of purchasing votes for Democrats.
Back then, high-deductible / low-premium plans prevented “medical bankruptcy” through the appropriate mitigation of financial risk. So, overall, collectivism wasn’t needed in order to ensure universal access to health care – or any OTHER commodity necessity of life, for that matter.
All that changed as government corrupted the health care market by corrupting the way we pay for health care. If we lived in the universe where leftists were capable of being intellectually honest, they would simply look at the history, recognize the ONE THING that is NOT like the OTHERS, and realize that what’s needed is to restore the free market in health care, which means getting the State OUT of the health care sector, pronto.
- The other part of a competitive system is that the consumers must all have equal access to the market.
We already have that. We just need to understand that the market is HEALTH CARE, not insurance. EVERYONE has access to health care, all one needs to do is accept the individual responsibility to pay for it in the same way people seem to find ways to pay for food, water, heat, electricity, a car (or three), designer jeans, Nikes, Skechers, iPods, bling, tattoos, cigarettes, fast food, drugs, cell phones, Rottweilers and HBO.
Meanwhile, Paul Ryan agrees with you, and proposes “shifting the ownership of health coverage away from the government and employers to individuals.”
It will take more than the House and Senate in GOP hands along with the Presidency. It will take common-sense conservatives leading both houses and Sarah Palin’s courage at the helm.
Palin/Ryan 2012
Fiscal Sanity
One thing that has often bothered me with the present system, and not mentioned in the article, is the “Certificate of Need.” In my state (and I believe many others if not nationwide), entrepreneurial medical practitioners can’t just open a new hospital, or new imaging center, or surgery center, etc. They have to show a need in the community and receive a “Certificate of Need” (CON) from the state allowing it — a complex bureaucratic process. I can only imaging that this restriction of supply is to a great degree responsible for high costs — why can’t we let these people compete freely and bring down the price of an MRI (and ultimately of the machine, since more will be sold)? How do you think this restriction affects the system?
The only way the doctor-patient relationship stays 100% pure is if doctor provides a service and patient pays for it – i.e. doctor does what’s best for patient and patient is ready, willing & able to pay the bill. Inserting a third-party payor into the equation distorts & contaminates the relationship b/c of the simple facts that the third-party payor (private insurance, govt – doesn’t matter) is always looking to save on costs and doctor is always looking for a way whereby the third-party payor pays as much as the system will allow.
Doctor has an interest in keeping his fees affordable and not charging the self-pay person too much (although that’s exactly the opposite of what happens in most self-pay situations today) b/c they know that would keep the patient away, the consequences be damned.
We should be working towards returning to self-pay, through health savings plans and other methods, whereby costs can be contained and kept in check by a vigilant consumer of the service. Instead, we are moving in the opposite direction, and towards catastrophe.
Ask yourself, when you pay an insurance premium, will you ever see that money again – whether you eat right, exercise & remain fit as a fiddle, or whether you’re a slovenly couch potato smoker eating triple cheeseburgers and flatliner fries everyday. No, you will never see a dime of that money again either way.
With self-pay, patients have an interest in staying healthy and keeping costs (& demand) down. Both parties in the equation have an interest in balancing supply & demand to keep the service(s) affordable.
With third-party pay, patients have zero interest in staying healthy and keeping costs in check – somebody else has to sacrifice in order to get the necessary training to provide the service (supply), and somebody else picks up the tab. No incentives to contain costs (price) on either end.
#48 RJL makes a good point – requiring people to obtain CONs (an appropriate acronym if ever there was one) is one way that bureaucrats (and industry insiders – i.e. hospital CEOs, doctors, nursing homes, etc.) keep competition down, prices high and the bucks rolling in for those who got in the game before CONs became a requirement.
For everyone else, even those who find a better and cheaper way, tough luck – you’re out. If someone is willing to risk their own money and offer a service, they should be allowed to do so, which hopefully will improve the service and keep prices competitive – but not so with CONs. With CONs, there is a gatekeeper who says “you can’t come in – we’ve got enough right now, they’re doing just fine so leave them alone, and we don’t care if you do have a better and cheaper way.” It’s called protecting their turf – and it works very effectively, I might add. Little difference between that and Chicago-land gang turf battles. And with Obamacare, it’s only going to get worse.
If you like the way you’re treated at airports, and the service you get at the Post Office, the IRS, & the DMV, you’ll love Obamacare.
This bill is not about bending the cost curve, it is about increasing coverage, getting rid of rescission and such. Most of it will be quite popular as it becomes law.
The endpoint is clear: more doctors making less money but having better lives (less work, more flexibility and more respect from society). Getting there will be a bit rocky because so many things have to change fundamentally, but the process has now started. With no way to hide from change, even the most fearful will have to start thinking of how to make things work. The RNC won’t talk about repeal for long (or it will get hammered in the elections) and it will start talking about how many new doctors will be needed and how they plan to get them.
The Democrats already made a start on their plans by reworking the student loan program and expanding it. But it will take much more than that. Medical studies (and other degrees that are in short supply, such as engineering) will be heavily subsidized.
A more Republican way to increase the supply of doctors could be to make it easier to qualify foreign-educated ones. It’s a relatively easy change that should be a no-brainer. Already about 25% of physicians are foreigners. Let’s double that…
Market economics, it is a pain. You can either work to have more doctors, or to have less patients. The RNC has to chose, and propose a plan.
#51 endorendil: “This bill is not about bending the cost curve, it is about increasing coverage, getting rid of rescission and such. Most of it will be quite popular as it becomes law.”
That’s a good one! I’m still laughing. By increasing coverage, you can’t help but bend the cost curve. With increased coverage comes increased demand, increased costs, and resources spread thinner to provide the service. Most of it quite popular? I’d guess about as popular as having a root canal. You’ll see services cut, higher co-pays and deductibles, i.e. more and more costs shifted to patients, rationing and worse.
Make it easier to qualify foreign-educated doctors? Yeah, that’s a good idea – I’m sure most Americans want a doctor they won’t be able to communicate with, not to mention the cultural biases against women many of them share, not to mention the possibility of them using our money to fund terrorism. That’s a doozy of a no-brainer alright!
And last but not least, more doctors making less money? The fact is, there’s already a shortage of physicians and it’ll only get worse as baby boomers move into their golden years, and considering the fact that many physicians will walk away when they discover what a nightmare Obamacare will be to deal with.
Nice gloss over of the painful start (“Getting there will be a bit rocky”). That’s got to be one of the biggest understatements of the year.
Had a spouse with (both) kidney failure at a young age and had to live for decades with frighteningly large medical bills and endless fights with our insurance company. We were always maxing out on some aspect of our coverage due to one formula or another and pretty much unable to ever accumulate savings nor live a lifestyle commensurate with my occupation.
Now you may think I am going to sing Obamacare praises here but in fact I agree completely with the author and especially with Goy’s focus on the difference between disaster insurance and care.
My wife’s illness easily qualified as a disaster and with a system of true “insurance”, she would have been completely covered. Instead, you may as well have painted a target on her back drawing the aim of the insurance company administrators continually trying to reduce payouts by attacking them where most concentrated. This is a very heartless characteristic of our current health “care” system that will be exacerbated by Obamacare.
The answer always seemed to me to lie in the “insurance” concept – many people ban together and agree to pay a relatively small amount into a pool that covers those in the group who are struck with a disaster of some kind. The ideal system is almost exactly analogous to car insurance. You do not ask your insurance company to pay for your routine service. You do not get paid for an engine that blows up due to your failure to change the oil change or for new rotors because you let you brake pads wear down. The system works because people know that car “care” is their own responsibility and furthermore have no one but themselves to pay for their own bad habits. But if disaster strikes, they are covered and with that knowledge can plan their lives without fear.
I roughly figure that the government could cover disaster insurance for the 31 million uninsured for about $150 billion per year – without any increases in taxes. Anyone want to bet that red ink from Obamacare will ever be less than $150 billion per month?
The only problematic area is end of life care where you could say that “disaster” strikes almost everyone in some form or another. I don’t know the answer there but I do know that it is not right for a person to protect and preserve the assets of their soon-to-be estate, while demanding that everyone else pays their end of life care.
#52 endorendil: “With increased coverage comes increased demand, increased costs, and resources spread thinner to provide the service.”
Not that simple. Millions that couldn’t access medical services except in emergencies will be able to get care. That will free resources in emergency rooms and reduce overall costs by improving detection of problems before they become unmanageable. So you reduce the need for ER services (expensive) and specialists (ditto), but increase it for GPs and RNs. It’s not a switch the system can respond to in less than 10 years (except by attracting foreign doctors), but it is clearly necessary to reduce costs and improve general health.
“You’ll see services cut, higher co-pays and deductibles, i.e. more and more costs shifted to patients, rationing and worse.”
No, that was the last decade. In the following decade this will start to abate.
“Make it easier to qualify foreign-educated doctors? Yeah, that’s a good idea – I’m sure most Americans want a doctor they won’t be able to communicate with, not to mention the cultural biases against women many of them share, not to mention the possibility of them using our money to fund terrorism.”
Many Americans don’t speak English as their first language anyway, and I’m not sure I care much about someone who refuses to see a female doctor based on prejudice. Your idea that doctors would come to the US in order to make money for Al-Qaeda is just bizarre. Kitchen sink approach?
“And last but not least, more doctors making less money? The fact is, there’s already a shortage of physicians and it’ll only get worse as baby boomers move into their golden years, and considering the fact that many physicians will walk away when they discover what a nightmare Obamacare will be to deal with.”
Sorry, it is the law of demand and supply. There is no way you can keep salaries in the stratosphere if you increase supply, and we all agree that healthcare will only become better if there are more doctors.
Specialists will be needed less if access to basic healthcare is improved. So their numbers will decrease and/or their workload reduced. GPs and RNs will continue to be highly paid professionals, but in the medical realm, their wages are relatively low. Since there are going to be many more of them in a decade, the average salary cost for medical personnel will decrease. In addition, as more GPs and RNs continue to be trained, their average workload will drop, and thereby their salary. Doctors may find out what European doctors already know: it’s nice to have some say in your work/life balance. Easier working conditions and a lower barrier to entry (cheaper schooling) are a big reason why so much more European youngsters decide on medical careers. And because there are so many doctors in Europe, their salaries are lower. The market strikes a new balance, which is healthier and cheaper for society, and more rewarding for most doctors.
“Nice gloss over of the painful start (“Getting there will be a bit rocky”). That’s got to be one of the biggest understatements of the year.”
Thanks. Fixing problems is always harder than just wallowing in fear or pretending that the current system is the best there is (or even remotely competitive).
#54. Are you smoking something or just on cleanup detail for the Progressive movement? You make rebuttals to serious analysis by just saying “no that’s wrong” or making Obama-like obfuscations designed to appeal to people who won’t think things through.
It’s become a Progressive tradition: make nonsensical utopian statements with passion, throw in a few rhymes if you can, appeal to class envy. And always call the other side “bizarre” or “ridiculous without saying why. In reply to you I guess all I can do is to quote Pee Wee Herman: “Yes you are but what am I?”
Save your post and let’s talk about it a few years down the road. Meanwhile I am going to try to get a Government Union job so I can avoid all trouble that this administration is going to visit upon our Nation. That will work until we devolve into Cuba and then I will have to figure out how to get into the real inner circle. Do you have any connections?
Doesn’t this also at some point create a blackmarket and/or off shore market. This is much easier with services than many “products” such as gasoline.
#54 ” . . . and we all agree that healthcare will only become better if there are more doctors.” Really? Well, excuse me if I disagree.
” . . . a lower barrier to entry (cheaper schooling)”
Opening med schools to every moron out there will actually lower the quality of care – there’s a reason healthcare in the U.S. in the best and most innovative: high admission standards to med school and high standards of practice. I don’t know about you, but I don’t want the guy (or gal) who barely made it through biology class doing surgery on me.
By your logic, perhaps we should just let people get their medical degree online and voila! More doctors, better care. Sadly, that may be where Obamacare takes us.
# 56 “Doesn’t this also at some point create a blackmarket and/or off shore market.”
An interesting possibilty is the creation of off shore medical facilities that run on their own insurance provided by an agglomeration of such medical companies. Think in terms of the US automobile manufacturing industry that set up maquiladoras south of the border. Lower overheads by a mile.
A similar service already exists in India but it is not blackmarket. Highly trained US qualified doctors providing quality medical services way below US “market” prices. The cost of the airfare accomodation and post op care care beats the costs of similar services in the US by miles. Hook that service up with a pool of customers who will pay insurance and who are (will be) dissatisifed with health care in the coming years and you have a new business model. The best part about it is that you may not have to fly out of the US or drive across the border. Apply the Indian Casino business model and presto – you have plethora of quality quasi-public medical facilities located on 1st Nation Reservations that could operate outside the reach of the grabby hands of the Federal Government and theoretically out of the grasping hands of ambulance chasing lawyers. You could even do a little gambling during your recovery phase. If the Federal Government raises a stink then just move it south the border. There are extremely well equiped and staffed facilities operating in Mexico. The prices realistic and attention to patient care is equal to anything I have experienced in the US. I lived in Mexico for more than 10 years.
Imagine hospitals and doctors 1)free from crushing legal costs, 2)having to practice defensive medicine, 3)free from government intervention and intrusion into the doctor patient relationship, and 4)free from irrational pricing driven by the current insurance costs not being determined by the people running the medical facilites.
It will not help the US system but I bet there are 100 000 people willing to pay 5K per year insurance for an all inclusive service. 500 million per year builds and maintains a pretty decent medical facility able to attract qualified medical proffesionals intersted is practicing medicine only. They may even make enough to do 10% as charity services which incidently is the numer of uninsured Americans according to some estimates. They may even treat day dreamimg, a condition which afflicts me and apparently most of the currently elected officials who think socialized health care cures everthing.
I wouldn’t be surprised if big-brother Ezekiel’s mentality is a form of post-Holocaust trauma, but if true, it makes him a victim according to today’s “abuse-excuse” criteria, and let’s him off the hook.
goy
Sorry, but someone who is a coward, fraud, and a liar cannot be taken seriously. In the article linked below:
http://pajamasmedia.com/blog/high-drama-amid-obamacare-threats/#comments-72
you were caught lying several times. The worst time was in post #72 where you suggested that you are a veteran. I’ve asked you repeatedly to name when and with what unit you served. You’ve repeatedly refused to answer those questions. A real veteran would be able to do so. It’s pathetic that you could be so cowardly as to pretend to be a veteran. Your comments cannot be taken seriously.
@60. Mr. Independent: – … someone who is a coward, fraud, and a liar cannot be taken seriously.
That’s probably why your Concern Troll B.S. isn’t really taken all that seriously.
Again, since you missed it the first time:
I’m not obligated to answer your questions.
Your silly fantasies ⊄ my concern.
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