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The Rosett Report

We Liked Our Doctor

December 19th, 2013 - 1:07 pm

If the aim is to subsidize the poorest members of society, or ensure that no one need go without catastrophic coverage, it would be far cheaper and more effective to tax the working folks directly and forthrightly, and turn over the money to the neediest — and let them buy their own health insurance. If the government fear is that they would choose to spend the money on something else, then give them vouchers for medical care. But keep it simple. As an act of redistribution, that would at least have the virtue of being transparent, reasonably predictable and minimizing the cut for bureaucratic or politically well connected middlemen. By contrast, it is vastly more expensive, uncertain, corrosive to choice and destructive to freedom to embark on redistribution via a vast machinery of state planning and regulation. An analogy might be the old crony state of the Philippines under Ferdinand Marcos. Had Marcos run a free-market economy, levied reasonable taxes, and then helped himself to a multi-billion dollar presidential salary from the state coffers, he might have faced protest for his greed, but he would quite likely have avoided beggaring his country. Instead, he set up crony monopolies, vastly enriching himself and his pals by way of throttling business for the multitude. In the end, he was overthrown, but his country paid — and is still paying — an enormous price for the the system he set up. For every billion he squeezed out of his crony patronage system, the Philippines lost many times that in wealth foregone. Deadweight loss.

Another point, rarely mentioned in all the talk about rising healthcare costs in America over the past few decades, is what those dollars have actually been buying. It is not only the costs that were rising, but the benefits in terms of prolonging life and enhancing its quality. My grandmother died in 1965 at the age of 63, of pneumonia followed by a heart attack. These are things far more readily dealt with today. So are many cancers, chronic diseases, or sheer accidents. We now have scans, heart medicines, laparoscopic surgeries, highly tailored cancer drugs — a host of methods that a few decades back were science fiction. Surely the cost of medical care would have been lower had we skipped all those costly inventions, and stuck with aspirin, penicillin and the surgical procedures of 1952. For that matter, most Americans spend a lot more on computers these days than did their counterparts some 50 years ago — in that broad and misleading sense, computer costs have gone through the roof. But then let’s factor in what a dollar spent on computers will buy now, versus then. In medicine, the question is not solely the unit price of a given procedure, but the tradeoffs and potential benefits involved.

There are a lot of ways to keep costs down. Allowing real competition in a real marketplace is one way — and allows doctors and their patients to choose, thrive and adapt. Smothering medicine with state planning is another — fraught with deadweight loss.

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Top Rated Comments   
The author says her doctor has been "commandeered as a serf of the federal bureaucracy." She nailed it.

In my opinion, ObamaCare is most comparable to Stalin's "collectivization of agriculture." Stalin appropriated, nationalized, or took over the whole peasant agricultural segment, reducing farmers to "a second serfdom" (in their words), and wrecking the Soviet food supply for generations.

Obama has taken over the American medical sector, and he will wreck our medical care forever, besides reducing us all -- doctors, patients, insurance companies -- to serfdom.

Yet Judge Roberts says that's constitutional!
44 weeks ago
44 weeks ago Link To Comment
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All Comments   (19)
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What the doctors need to do is what the telephone companies did - list out all of the costs from regulation and list it separately on the bill as "Obamacare tax".

Of course, I have no doubt that they will be sued, civilly and criminally. What they need is a union, something to defend and negotiate for them. We could call it, I don't know, how about, "the American Medical Association".

Wasn't it in totalitarian regimes where unions represent the government instead of the workers?
39 weeks ago
39 weeks ago Link To Comment

Excellent article. The medical sector in this country will be forever changed by this massive federal intervention. And when things go wrong, as they have and will again, the instinct of the government is to double down, i.e., impose more regulation and control. I fear that we are in for a rough ride indeed.
44 weeks ago
44 weeks ago Link To Comment
The writer hit the main problem - the ACA will kill the last of the Wealth in the Medical system. Why would the best and brightest spend 10 years in post-grad training to earn an ok salary complying with computerized boxes. Careers will be destroyed because the doctor didn't do what was in the multiple choice list but saved the patient.
44 weeks ago
44 weeks ago Link To Comment
When it's said "we liked our Dr. UNTIL" implies we no longer like him. (because of O care)
44 weeks ago
44 weeks ago Link To Comment
Is it just me or are we witnessing a chain of events that will bring us to a world much like in "The Hunger Games", where the government dictates every aspect of your life, while the Washington elites are exempt from the toils of serfdom.
44 weeks ago
44 weeks ago Link To Comment
True free market medicine would bring our health care costs a long ways down, but on the other hand the level of incomes in the health care field would also have to drop by a considerable amount. For example, under our present laws and regulations, doctors enjoy a government enforced monopoly over medical drugs. Which adds significantly to their incomes. Without these laws, people would make far less office visits, have fewer lab tests, as they'd be able to deal with most common medical issues themselves or with the aid of druggists, medical internet websites and such. Amazon.com would sell discounted medicines at lower prices than what drugstores charge. For issues like high blood pressure, high cholesterol, high blood sugar, the more computer knowledgeable who have had better quality educations would be quite competent to deal with many of these problems. There would also be multiple tiers of hospitals, with people selecting the level they actually needed. It would no longer be possible for hospitals to spread out the cost of expensive high tech equipment as they do today. So a lot of our present health care system has to rely upon government regulation in order to survive as the high cost monopoly that it is. Under conditions of true free enterprise, costs fall, and the reason they fall is because of economic incentives. The lowest cost provider eventually drives the higher cost providers out of business. This is why Walmart is today the world's largest retailer. The nature of a true free market always will drive prices to their lowest level. Wages too fall to a much lower level based upon supply and demand. The only way workers could earn wages and salaries above the free market level was through labor unions, which restricted the supply of labor, thus forcing the price of labor services higher than it otherwise would be. The same is true for all the professions. They enjoy high incomes only because of government regulation that grants them a monopoly over services. Without that government regulation, the price they would be able to charge for their services would be much lower, and they would also have a lot of competition from lesser trained people who would provide the simpler services. Medicine is no different. Without government, doctors would earn the level of income that skilled workers earn. A middle class income, no more.
44 weeks ago
44 weeks ago Link To Comment
Remember that anti-Romney/anti-Republican scare-ad of the (Ryan?) figure wheeling grandma over a cliff, suggesting that this is what Republicans wanted to do by privatizing Medicare?

One can imagine a mirror images of it in the next few elections, each tailored to a specific democrat candidate who supported the ACA.
44 weeks ago
44 weeks ago Link To Comment
I saw fear in my doctor's eyes during my physical last week when I asked about the coming storm.

An elephant that needs to be brought out of the shadows is the American Medical Association (AMA). They have been good little Party apparatchiks in all of this.

It is way past time for the physicians of America to burn down the AMA and create something that will represent them.
44 weeks ago
44 weeks ago Link To Comment

There are alternative organizations, the AAPS for one. In my experience with docs, which is considerable, I find they don't much like the idea of collective action and want to be as independent as possible.

But you are quite correct about the AMA; it no longer represents the majority of docs and seems to be heavily oriented to the academics. Many of the remaining practitioners who belong do so in order the receive the JAMA journal.
44 weeks ago
44 weeks ago Link To Comment
If they don't act collectively, they may find themselves bankrupted or in jail.
39 weeks ago
39 weeks ago Link To Comment
Anyone else remember the doctor coming to your house when you needed him? Of course this wasn't a big deal for him since he lived in our neighborhood and was friends with my Mom and Dad but he also made housecalls where ever he was needed. Most of his patients paid cash and got the best he could provide in service. ( Just noticed my spell check thinks I made a mistake with the word housecalls! :) )

Now, what would be wrong with a system much like food stamps for medical care for low income families that can't afford health insurance? Seems like a whole bunch of people don't have a problem applying for food stamps or disability, why can't we make it so they can apply for health care at the same time? The rest of us could just go on with the doctors and insurance policies we have and like. I don't mind helping out someone that needs help when I can afford to loan out a few dollars but I sure don't like being forced to give money out for someone I don't know. Don't they have someone else they can mooch off of? There are plenty of churches and charities that do that kind if thing. I know I'm always getting junk mail from them trying to get me to donate so they can help those that are less fortunate. Of course, since I'm on Social Security and a small VA disability fixed payment, it's a bit hard to find someone that needs my money more than I do. Not much extra for me to be giving away.
44 weeks ago
44 weeks ago Link To Comment
Something like that did exist at one time. Mutual aid organizations would hire a doctor on a retainer to provide medical services to the members. The AMA was strongly opposed to this because it introduced "price competition", and all of the professions are totally opposed to the idea of "price competition" where they have to offer their services in competition against others. At one time retail trade was able to get state governments to pass "fair trade" laws that acted as "price supports" and prevented "price competition" from taking place. These laws eventually disappeared as violations of the Commerce Clause, but when they were in effect, the "Main Street" stores were able to survive. However after the "fair trade" laws were outlawed, people like Sam Walton (founder of Walmart) came on to the scene and sold goods at a discount compared to the Main Street stores. Then when Walmart grew powerful enough, it was able to by pass the "middlemen" and deal directly with manufacturers in obtaining a price lower than what any small business could obtain. International free trade also allowed businesses to obtain both goods and services at a price well below that which American businesses could match. Especially if unionized. The effect of free trade is to lower prices to their lowest possible level. A level so low that effectively we became dependent upon China for much of our own consumer goods. Without "protection", the technology exists that Americans could use computer programs such as Skype to "visit" doctors in low labor cost countries. And obtain medical advice at a price that no US doctor could match. Again this is the effect of a free market, of free trade if government regulation disappears. Some people of course benefit from all this, while others have to accept a much lower standard of living than what they were used to getting before...
44 weeks ago
44 weeks ago Link To Comment
This article captures and states the problem very well with both logic and emotion. However, so much has been said about the disastrous nature of Obamacare but so little heard. Dull witted and ideologically blinded Progressive Party supporters have allowed these aggressively incompetent bureaucrats to take a wrecking ball to the foundations of our society.

And to add insult to injury, we have to put up with all of the smirking smugness and airs of certainty coming from these people as they pull levels and turn dials of a machine that they don't understand at all.
44 weeks ago
44 weeks ago Link To Comment
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