Dear Friends,
It seems to me that The democratically controlled congress has so poisoned the water regarding health care that they have sealed their own fate.
The Obama administration had as it’s cause celeb health care reform. By health care reform they meant setting up a framework for a single payer system. The democrats realize their improvident tinkering on the market supplied healthcare system and mismanagement of the two major single payer systems in the United States have broken all of them… badly.
Medicaid’s budget is careening to widen the US budget deficit in the next twenty years. The projected costs are astronomical. Medicare is even worse. They are all compounded by the Social Security bell curve in baby boomers. Combined, these three programs, Medicaid, Medicare and Social Security are projected to amount to over 45% of US GDP in twenty years.
This is entirely due to lack of foresight by the Democratic party that has been largely in control of these programs. The Republicans have tried to steer Social Security in a more sustainable direction but have been vilified for it by both the unbiased media and the Democrats. That is not to say the Republicans are not as foolish as the Democrats… they just want to benefit their constituents.
Knowing the dire straights the Democratic party has steered the US economy and the looming results of their poorly thought out great society programs they feel the only way to avoid blame is to take over the entire health care industry. Putting up a smoke screen to their ill-considered management. Then they can institute draconian rationing to drive down costs. Then blame Republicans for the need to ration.
80% of the total costs of health care are born in the last 20% of a person’s lifetime. So if government wants to lower the overall costs all it needs do is ration health care away from older people. Of course, being politically sensitive, this will be phased in slowly. It will take a decade or more to phase in the most draconian after the State seizes control of the industry.
The real driving factors of the double digit increase in the costs of US healthcare are not enough doctors, too much regulation of the industry, fragmented regulation among states, lack of tort reform and lack of market forces driving down costs.
The medical colleges in the US intentionally keep the amount of MDs they produce at a minimum. They claim it is to keep the quality high. The reality may be less altruistic. There is absolutely no reason the United States should import doctors from other countries. That is the hallmark of a third rate country. Not a world leader. The United States, in a more sane world, would be exporting doctors to third world countries, to improve the lot of the people in those countries.
Regulation in the US stifles innovation in insurance delivery. In Vermont the states regulation became so onerous that Kaiser Permanente, the not for profit insurance company, had to leave the state. Fractured regulation drives up the costs of any entity that does business across state lines. (This is why the interstate commerce clause was put into the US Constitution, not to regulate everything from nose picking to bedroom arrangements).
The elephant in the room of any meaningful health care reform in the US is tort reform. It would be an interesting figure to know what percentage of the health care dollar is spent on lawsuits both frivolous and accountable.
Lastly the market model breaks down in the case of healthcare. If told a certain operation will save the life of a persons child that person will rightly pay any amount for it. They are not in a bargaining position. Market forces presuppose that both parties to a transaction have at least some leverage. The buyer need not purchase the product and the seller has a certain cost of doing business. Both have incentives to both do business and to profit in their own way. When someone’s child’s life is in the balance there is necessarily no bargaining power on the part of the parent. The parent MUST purchase the operation.
The most important thing that will be lost with a US single payer system is the loss of innovation… But the Democrats will have avoided blame.
