History repeats; Obama to price fix insurance premiums.
Reading the news has replaced for me the need to watch late night comedy, I get all the humor one could handle plus a dash of fright and terror. In today's NYT piece, we learn of our dear leader's new brilliant idea; price fixing! That is right folks, where the brilliant minds of the Soviet Politburo and the crack team of the Nixonian administration have failed, our Harvard Law School graduate (where are those pesky transcripts?) decided he has figured it out all out.
So for those unclear as to how this will work, it went something like this.
HMO: "There are over 90 million people getting care from Medicaid and Medicare at below market prices, how is this being covered?"
Hospital: "Uh...well...we were hoping you would take care of that one for us"
HMO: "Well we have BEEN, but the tax payers are blaming us for price gouging"
Hospital: "Yeah...uhm...just deny coverage randomly and come up with good excuses"
HMO: "What the hell do you think we have been doing for decades now?"
Hospital: "Damn...what a pathetic business you are running, why are you in it anyway?"
HMO: "Oh, ehh...we kind of lobbied Congress to give us some help back in 1973 and boy did they come around"
Hospital: "No kidding? How did you pull that one off?"
HMO: "It was easy, the Medicare/Medicaid wonder twins sent prices to the moon"
Hospital: "I see, well we can't help you now - Medicare is a freaking gold mine and passing the costs off is fun and easy".
HMO: "Fine, we are off to DC again".
I am not suggesting HMOs lobbied for this price fix, but rest assured that they do stand to benefit from something like MassCare and insurance mandates. Generally price fixing is a last resort of a clueless Congress and ends up damaging the industry where the price controls are set. Whether it was the energy crisis in the 1970s or the electricity crisis in California the result is always the same. When you distort the price mechanism the entire supply/demand relationship crumbles. This is why minimum wage creates unemployment, something the unions understand but choose to ignore.
This is by the way, exactly why Canada and UK experience significant shortages and rationed care in some specialized areas of medicine. As the Soviet system of central planning demonstrated it is generally very difficult to plan accurately for adequate supply, but in the realm of medicine it becomes just as difficult to predict how many MRI machines one needs or surgery tables or CAT scanners. So while Canadians can probably get "free" care for a broken leg or a quick stitch, anything requiring specialization and heavy cost will result in wait lines. This is why so many Canadians and Europeans come to the United States for operations, not because their doctors are inept, but because we have supply - especially if you have money, something interestingly enough that can not buy you these services in Canada, because shortages cannot be overcome with money.
So not only is Obama suggesting the creation of another authority that will inevitably create shortages, but it will do absolutely nothing in solving our problem. A problem of massive over-consumption of medicine and a giant layer of insurance bureaucracy that was largely aided by and created by our own damn government! The same government that has now turned it's own creation into a bogeyman harnessing the anger of a public that is using the free market and for-profit insurance companies as a path for universal care. We would be the envy of the world if we ended federal subsidies to employers, shut down government subsidized health programs like Medicare and Medicaid and encouraged people to establish prices with doctors instead of disinterested insurance companies. Whatever happened to insurance companies INSURING instead of trying to meddle in our lives? Ahh, a boy can dream.
The president’s bill would grant the federal health and human services secretary new authority to review, and to block, premium increases by private insurers, potentially superseding state insurance regulators. The bill would create a new Health Insurance Rate Authority, made up of health industry experts that would issue an annual report setting the parameters for reasonable rate increases based on conditions in the market.Nice. Let's pretend that America is just stupid enough to forget the failed and utterly infantile economic approach known as price control. Then again, Americans DID elect Obama thinking they were getting the opposite of Bush so perhaps the collective ignorance of a public can never be underestimated.
So for those unclear as to how this will work, it went something like this.
HMO: "There are over 90 million people getting care from Medicaid and Medicare at below market prices, how is this being covered?"
Hospital: "Uh...well...we were hoping you would take care of that one for us"
HMO: "Well we have BEEN, but the tax payers are blaming us for price gouging"
Hospital: "Yeah...uhm...just deny coverage randomly and come up with good excuses"
HMO: "What the hell do you think we have been doing for decades now?"
Hospital: "Damn...what a pathetic business you are running, why are you in it anyway?"
HMO: "Oh, ehh...we kind of lobbied Congress to give us some help back in 1973 and boy did they come around"
Hospital: "No kidding? How did you pull that one off?"
HMO: "It was easy, the Medicare/Medicaid wonder twins sent prices to the moon"
Hospital: "I see, well we can't help you now - Medicare is a freaking gold mine and passing the costs off is fun and easy".
HMO: "Fine, we are off to DC again".
I am not suggesting HMOs lobbied for this price fix, but rest assured that they do stand to benefit from something like MassCare and insurance mandates. Generally price fixing is a last resort of a clueless Congress and ends up damaging the industry where the price controls are set. Whether it was the energy crisis in the 1970s or the electricity crisis in California the result is always the same. When you distort the price mechanism the entire supply/demand relationship crumbles. This is why minimum wage creates unemployment, something the unions understand but choose to ignore.
This is by the way, exactly why Canada and UK experience significant shortages and rationed care in some specialized areas of medicine. As the Soviet system of central planning demonstrated it is generally very difficult to plan accurately for adequate supply, but in the realm of medicine it becomes just as difficult to predict how many MRI machines one needs or surgery tables or CAT scanners. So while Canadians can probably get "free" care for a broken leg or a quick stitch, anything requiring specialization and heavy cost will result in wait lines. This is why so many Canadians and Europeans come to the United States for operations, not because their doctors are inept, but because we have supply - especially if you have money, something interestingly enough that can not buy you these services in Canada, because shortages cannot be overcome with money.
So not only is Obama suggesting the creation of another authority that will inevitably create shortages, but it will do absolutely nothing in solving our problem. A problem of massive over-consumption of medicine and a giant layer of insurance bureaucracy that was largely aided by and created by our own damn government! The same government that has now turned it's own creation into a bogeyman harnessing the anger of a public that is using the free market and for-profit insurance companies as a path for universal care. We would be the envy of the world if we ended federal subsidies to employers, shut down government subsidized health programs like Medicare and Medicaid and encouraged people to establish prices with doctors instead of disinterested insurance companies. Whatever happened to insurance companies INSURING instead of trying to meddle in our lives? Ahh, a boy can dream.
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