The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Do you trust your doctor? Most patients assume their doctor is working in their best medical interests whenever he or she orders a diagnostic test or recommends a particular treatment. Customers might wonder whether an unscrupulous auto mechanic is being truthful when he recommends a brake job or a new transmission. But most patients trust […]
The faces of the Detroit bankruptcy are the thousands of pensioners whose promised benefits are suddenly part of the restructure negotiation. When Motown filed for Chapter 9 last July, the city had $11.5 billion in unsecured liabilities. The vast majority of this was pension and health care benefits owed to retired city employees.The images of […]
So you’ve maneuvered the Obamacare website, plugged in your top-secret information and found out how much you are forced to pay to avoid a fine.And for some of you, it turns out you qualify for a government subsidy — making the premium sound like a bargain. But signing on that line to accept the government’s […]
The New York Times published an interminable article on health care recently. Plenty of facts — how scrupulous are these journalists! — but the article displayed absolutely no comprehension of the basics of cause and effect. I was left wondering about the whole point.The article details how the health care system rewards specialists to an […]
Dr. William C. Padgett is a retired optometrist who has been trying to bring an elderly care facility to Beaufort County, North Carolina, for over a decade.“Our senior citizens,” he laments, “are finding that it is difficult and in many cases impossible to find an appropriate long-term care facility locally.” Though he has received several […]
Professor John H. Cochrane of the University of Chicago had an op-ed in the Wall Street Journal on Dec. 25, in which he gave a brief description of (among other things) a market in which individuals buy our own health insurance — and not from an Obamacare exchange.According to Professor Cochrane: “…we should transition to […]
A new survey from Harvard University found a large majority of young Americans do not believe the law will save them money, do not believe it will improve their health, and do not intend to sign up for insurance through the new exchanges.
Liberal supporters of the Affordable Care Act specifically, and big government in general, are quick with excuses for all the problems that Obamacare has been experiencing in these early days. We have heard: they did not have enough time, it’s complicated, it’s the insurance companies’ fault, we just need to make a few adjustments, and […]
I opened a new bottle of probiotics this morning, and it had one of those circular seals on the top. You know, the one that reads, “Sealed for your protection.”And that seal got me thinking… how much protection do we need? How much security is enough?How much homogenization, pasteurization, disinfection, national security, etc…. do we […]
As the fallout continues over the cancellation notices sent to millions of people covered by health plans in the individual insurance market, it is becoming clear that millions more workers and their families are expected to lose their employer-based coverage as the Affordable Care Act (ACA) is implemented.According to the Congressional Budget Office (CBO), 156 […]
A president stands disgraced. Congress is scattering. Bureaucrats are baffled. Pundits are reaching. Industry is scared. Politicians are scrambling to do something, anything, to make it better. One political party is in meltdown and the other loving every minute of it, hoping to ride the calamity to electoral gains.The so-called Patient Protection and Affordable Care […]
Any married couple that earns more than 400% of the federal poverty level -- that is $62,040 -- or a family of two earns too much for subsidies under Obamacare. But if that same couple lived together unmarried, they could earn up to $45,960 each -- $91,920 total -- and still be eligible for subsidies through the exchanges in New York state.
The president assures us he is not responsible for the wave of health insurance policy cancellations. The insurance companies are. OK, so where is the other side?
The saying goes that things have to get worse before they get better. But with Obamacare, things just keep getting worse — and then they get worse still. In private, even many critics of the law are at least a bit surprised by how poorly the rollout has gone. The question that many are asking […]
Though the rollout of the Affordable Care Act (ACA) exchanges has dismayed even the law’s supporters, the problem the ACA is designed to address is real enough: Millions of Americans, even those with insurance, lack access to adequate health care. In a voluntary society, civil-sector groups would step up to provide social services, like health […]
It is such a kick to read the transcripts from the White House’s health care “war room” in the first days of release. What a meltdown, and you get to watch it all in real-time.I’m not trying to be cruel to the kindly despots who have wrecked so much of what worked in the existing […]
Obamacare certainly has made history. It has set the record for the fastest-failing Big Government program in world history. This isn’t only about a website flop; it is about the failure of government to accomplish the aims of Obamacare in general, and in a way that has profoundly touched millions of individual lives.“Train wreck” is […]
A handful of reports last week suggested that the Obama administration had moved to delay the health law’s individual mandate — the penalty the law imposes on those who are uninsured. That’s not quite right: Instead, the administration will align the 2014 penalty date, which had been February 15, with the end of Obamacare’s open […]
A common argument made in favor of government-financed health care is that it is inherently cheaper than a private system. Strangely, however, the people who celebrate the government’s ability to hold down health care spending would be horrified at the same argument applied to other public-sector functions. It’s a seriously inconsistent position held by advocates […]
You didn’t want to be the guy chosen to tell Stalin that the wheat crop failed or the production quotas on trucks and cars were not met. Why?Because despots always blame people, not systems.In the same way, you don’t want to be the guy chosen to tell Obama that his health care websites are a […]
Lately, many have characterized this administration as socialist, or having strong socialist leanings. I differ with this characterization. This is not to say Mr. Obama believes in free markets, by any means. On the contrary, he has done and said much that demonstrates his fundamental misunderstanding of and hostility toward the truly free market. But […]
As the health care debate rages on, there is one reality that even the proponents of this hostile takeover of health care by government cannot ignore — and that is money. The government simply does not have the money for a new, expansive, public health care plan.The country is in a deep recession. The last […]
The online Internet exchanges created by the Affordable Care Act are up and running.OK, they’re up. Uhh, OK, some of them are sort of up.It has been almost a week since last Tuesday’s initial launch, and there have been more than a few problems.Website crashes, excessive response times and other problems have plagued the exchanges. […]
Nothing starts a fistfight like the health-care debate. The market for what is just a basic service has been contorted and mangled by government intervention for more than a century. The average person wouldn’t know a free-market health care system if they saw one.
“Life, Liberty, and the pursuit of Happiness” must include health care, say those on the political left. The alternative is barbaric, they claim. Never mind that someone else’s rights must be trampled upon in order to provide the “right” of health care. And never mind that the results will be seriously degraded for everyone but the elite.
But the political right is just as clueless. Who can forget the Tea Party member who protested loudly, “Keep your government hands off my Medicare!”
Health care is a political flash point for a very simple reason. As John C. Goodman points out in his monumental new book, Priceless: Curing the Health Care Crisis, many people are opposed to the very idea of using the price system to allocate medical care. That’s the fundamental point that one hardly ever hears.
Medical care is a scarce good. It must either be allocated by force or voluntarily at a cost of either time or money or both. With the Supreme Court either striking down Obamacare, or not, or something in between, the Independent Institute research fellow focuses on the here and now and the immediate future. The author’s focus is what we pay in time versus money for our health care — and how that denies access for millions of people.
Whether you have paid close attention to the health care debate or not, you owe it to yourself to get this book and absorb its lessons. It clears away the fog of confusion, cuts through the political thicket, and gets to the heart of the economic issue. It deals with economic reality in a way that no other source does and thereby fundamentally changes the terms of debate.
This is more than a policy paper. Goodman has a firm grasp on the deep history of intervention to highlight the American Medical Association-funded Flexner Report of 1910, whereby the medical establishment gained the power to control the supply of doctors by regulating medical school admissions. At the same time, “The hospitals themselves also adopted a code of ethics that saw price cutting, quality competition and quality comparisons as violations of professional ethics,” explains Goodman.
Even that early, the AMA ensured there would never be a glut of doctors. For Americans who think their health care system is just a little left of laissez-faire, this will all come as a big surprise.
“Although many would like to think that our system is very different from the national health insurance schemes of other countries, the truth is that Americans mainly pay for care the same way people all over the developed world pay for care at the time they receive it — with time, not money.”
Those who advocate for universal health care believe we all have the same amount of time, and that those with more money have an unfair advantage in the race for health care, as if there is only so much to go around. Having us all wait for hours in doctors’ offices and hospitals is their egalitarian utopia.
Goodman makes the point that we are trapped in a dysfunctional system that keeps employees trapped in jobs they hate, scared to think they can’t obtain health insurance any other way. America’s health care desperately needs the innovation and inspiration provided by entrepreneurs to free the system and its prisoners. Tragically, what entrepreneurial gains are being made in health care are stifled by third-party bureaucracies that make the payments.
Innovative health care providers are punished for not playing by Medicare’s rules, when taxpayers could be saved millions by their entrepreneurial acumen. The author’s discussion of Medicare billing requirements for treatment of high-cost, special-needs patients will absolutely make your blood boil.
Meanwhile, in areas of health care where the patient actually pays directly for services rendered, technological changes are rampant, service levels are high and costs are decreasing.
“The real price of cosmetic surgery has actually declined over the past 15 years,” writes Goodman. “The real price of Lasik surgery has declined by 30% over the past decade.”
So as much as the president and his followers preach that they want to force down the cost of health care, making it affordable for everyone, the author points out that Mr. Obama doesn’t understand that the price of health care is the symptom, not the problem. “Just as it would make no sense to try to treat a fever by lowering the body’s temperature,” he writes, “it makes no sense to try to control prices while ignoring why they are what they are.”
Goodman illustrates the problem deftly, comparing the cost of knee replacement surgery for a human versus knee replacement for a dog. The technology needed is the same, as is the human skill level, yet a dog can get a new knee at one-sixth the cost. What accounts for the difference are government regulations, malpractice liability and third-party payment inefficiencies.
He makes reference to his previous book, Patient Power, in which he and co-author Gerry L. Musgrave point out that 250-bed Scripps Memorial Hospital had 39 government bodies and seven non-governmental bodies to answer to.
Malpractice liability costs layer on between 2-10% of costs, and the costs of health care payments coming almost exclusively from massive bureaucracies is unknowable, except to say excessive.
Goodman explains that there really is no understandable price system in health care. Nobody really knows what things cost. Doctors are not paid by prices determined by supply and demand, but by various reimbursement formulas. This is not that different from the Soviet Union’s communist glory days.
Mr. Obama would like everyone to be insured. But the legal system provides the incentive for healthy people to go without. Because insurers cannot adjust premiums for risk, rates are set higher than what it would reasonably cost to insure healthy people. These high premium costs force the young and healthy out of insurance, leaving the pools dominated by older, sicker policyholders. Insurance companies have every economic incentive to turn away people with pre-existing conditions. They can’t price for the risk.
The coming tragedy is that millions of Americans are counting on a system — Medicare — that is bankrupt. “For both Social Security and Medicare to be financially secure,” Goodman writes, “we need $107 trillion in the bank right now, earning interest, and it’s not there.” And there is no hope of it ever being there.
The author goes into great detail as to how Obamacare cuts Medicare in order to pay for covering younger Americans. But with or without these cuts, middle-aged Americans, not to mention those in their 20s and 30s, must think of other ways to be cared for in their old age. Like any Ponzi scheme, the first in to Medicare do fine at the expense of the latecomers. Goodman points out that today’s typical elderly person comes out $55,000 ahead with Medicare, while the typical 25-year-old will be a $110,000 loser.
The cure for America’s health care crisis is quite simply the free market. Anything short of that will preserve rather than cure problems. Some steps in that direction: allow patients to choose and pay for services with their own money; allow doctors and nurses the entrepreneurial freedom to actually serve patients in the same way that supermarkets or iPhone providers do; make cost and quality relevant in health care decisions.
I would like to see the entire interventionist apparatus uprooted. But while it’s easy to theorize about free markets, it is much harder to lay out a concrete plan. With Priceless, John C, Goodman has done the heavy lifting, providing not only a clear explanation of a crisis often portrayed as unfathomable, but also providing an understandable road map toward sanity in the healthcare market. It’s a realistic guide that has the market generating solutions while the government gets out of the way.