The Unnatural Nature of Government Health Care Spending

The ♡bamaCare!!! fails really stacked up over the break, but many of them had lost their immediacy so I figured I’d look for something fresh for you this morning. Along the way, I ran across a lengthy New Yorker article — a book review, really — by Malcolm Gladwell. Steven Brill, author of several VodkaPundit Endorsed!™ political books, has a must-read new one out: America’s Bitter Pill: Money, Politics, Back-Room Deals, and the Fight to Fix Our Broken Healthcare System, although I plan on waiting for the Kindle edition. Gladwell’s review is lengthy, and worth your time.

Along the way, Gladwell hosts something of a economic debate over the two schools of thought regarding medical spending. One school argues that it isn’t any different from any other kind of spending, while the other argues that due to its nature, medical spending is different and privileged — requiring lots of government to make it equitable. Which leads us to this:

Many state Medicaid programs have, similarly, a rule that says health-care providers cannot charge Medicaid more than the lowest price they give to anyone else. If you run an MRI machine and allow a privately insured patient to get a scan for two hundred dollars instead of a thousand dollars, you have to give all your Medicaid patients MRI scans for two hundred dollars. That’s a classic “health care is different” solution to the problem of excess health-care costs: pass a law guaranteeing the “sale price” to publicly funded patients. So what’s the result? Goldhill asks. Health-care providers behave the way any market participant would under the circumstances. They don’t have sales. What incentive would the Gap have for holding a Boxing Day blowout if, by law, it would have to offer those same low prices every other day of the year?

Goldhill takes a far more radical position than the economic team at the White House does. He believes that most of our interactions concerning health care are actually no different from our transactions concerning anything else: if we trust people to buy cars and houses and food and clothing on their own, he doesn’t see why they can’t be trusted to do the same with checkups, tonsillectomies, deliveries, flu shots, and the management of their diabetes. He thinks that the insurance function—inserting a third party between patients and providers—distorts incentives and raises prices, and has such an adverse impact on quality that health insurance should be limited to unexpected, high-cost occurrences the way auto insurance and home insurance are. These ideas are unlikely to make their way into policy anytime soon. But, in elaborating the market critique of the health-care status quo, Goldhill helps us understand what the argument we’re having right now is about. It is not just a political battle over Obama. It’s a battle over whether health care deserves its privileged status within American economic life.

I think that word “privileged” encompasses everything we need to know about why medical costs are so out of control in this country. Other Western nations spend less, but they also get less — we could be spending less and getting more. The privilege is the problem.

Hollywood celebrities have always been privileged, thanks to an indulgent public and bleeding-edge public relations. The result is, putting it nicely, a cesspool of human behavior, including but not limited to child-rapists like Roman Polanski. “But he’s such a good filmmaker!” Our politicians get away, if not with murder, then at least with manslaughter — isn’t that right, Senator Kennedy? All the while, Hollywood collects billions and Washington collects trillions.

Other examples abound.

In ancient Rome, it wasn’t rape if a member of the aristocracy had his (or her) way with a slave. Same deal with American slaveowners of a slightly more recent vintage. Usury laws give banks legal privileges — and loan sharks a steady stream of victims. Professional licensing schemes, bar associations, trade unions, IRS agents — each is privileged, and each has the power to extract endless streams of money from unwilling suckers.

(I’d feel it would be amiss if I singled out Ted of the entire, privileged Kennedy clan, who have gotten away with everything from rum-running to White House pool sex parties, to trust-funded moral preening, for nearly a century. It’s no wonder that a fourth-generation clansman of no discernible merit thinks he can tell the entire world how to live and work, when he’s spent a lifetime glomming off his family’s privileged position.)

In short, where there is privilege, there is abuse. But it takes government intervention to take abuse from comparatively petty offenses like underage sodomy and elevate it to a trillion-dollar offense against the health and pocketbooks of an entire nation.

So long as medical spending enjoys its privileged position, there is only one way to control costs — and that’s by rationing treatment. It’s been going on in Europe for decades, and now it’s coming to America, via ♡bamaCare!!!.

UPDATE: “Palm Beach Pedophile” really says it all, doesn’t it?