Why the U.S. Healthcare Systems Costs More (Must read!)
From a comment left on the Cafe Hayek page:
“You are defending the most wasteful and inefficient system in the world.”
What do you expect to happen to a market when:
1) Roughly 50% of all the market’s participants on the purchasing side are relieved of any financial responsibility for their purchases, thereby destroying any incentive to shop for the best value for the dollars being spent or to consider the most cost-effective way of dealing with their condition — and also thereby reducing any incentive to compete among doctors and hospitals.
2) The agency — Medicare and Medicaid — that assumes the financial responsibility for this 50% has access to unlimited government funds (i.e. taxpayer dollars or government debt) and thus has no incentive to police for fraud — no incentive to care what anything costs — and no incentive to tole.
3) That same agency — though it has no actual incentive to police for fraud or to care what anything wants — is nonetheless run by power-hungry bureaucrats who, in the name of “cost control”, push off on the providers (the doctors) over 130,000 pages of Medicare rules and regulations — rules so onerous and complicated that doctors that accept Medicare patients report that they must spend at least ONE FULL DAY per week on nothing but Medicare paperwork and must employ, on average, two additional clerical assistance to help in complying with those rules.
4) Another agency, state governments, gives in to special interest lobbying and forces ALL insurance policies sold by insurance companies in that state to include benefits such as alcohol rehabilitation programs, mental health programs, maternity benefits, etc, and demands that ALL such policies are sold at the same price — which means that those that want these benefits get them primarily at the expense of those who don’t want them.
And if you think you can just buy a cheaper policy from another state — a policy that is cheaper because it doesn’t contain certain benefits you know you’ll never use — well, tough luck, because the states with these mandates generally have laws prohibiting you from purchasing from other states.
5) Another agency, the FDA, adds millions to the costs of new drugs by spending years approving drugs after drug companies have already spent years on double-blind studies proving the drugs work.
6) That same agency — which has zero experience in manufacturing and generally employs people that know nothing about manufacturing — nevertheless promulgates a vast set of regulations known as “Good Manufacturing Practices” that forces those manufacturing medical devices to create thousands of pages of written procedures, audits, etc., thereby driving up the costs of all manner of medical devices.
This massive set of regulations, in addition to driving up the costs of existing manufacturers, also constitutes a huge “barrier to entry” to any new firms that might wish to compete with existing firms, thereby reducing the competition in the field of medical device production.
7) Still yet another agency — the tort court system and the trial lawyers — forces doctors to carry malpractice insurance policies whose premiums may exceed $100, 000 a year — as well as forcing doctors to run numerous medical tests not because they think the patient needs it or has asked for it, but simply to practice what is known as “defensive medicine”.
If you think the economic effect of this tort system is small, ask yourself why the trial lawyer’s professional groups give millions in campaign contributions every election to Democrats sympathetic to the current tort rules.
Still yet another agency, the Federal Reserve, continuously inflates a fiat currency thereby guaranteeing an ongoing, constant decrease in the value of everyone’s dollars.
How, in the face of this onslaught, can you expect anything BUT rapidly rising costs?
And why on earth — in the face of all the evidence that these government interventions are economically disastrous and unsustainable — would anyone think we can put 40 million more people into the system at no additional cost?
How is more of the same poison going to make us well instead of killing us off?
