With the Affordable Care Act exchanges set to begin tomorrow, much has been made about the 1,990-page bill passed in 2010. Recently, one of my colleagues advocated for the effectiveness of the act, or why the change is needed. The gentleman used emotion instead of his economics degree. His real concern was cost, not his injury.
Yet questions still remain, and Republicans have yet to answer them: why the medical system is broken, and how to lower costs while increasing standard of care. The current act does neither.
Generally, I haven’t seen much argument about a more fundamental question: whether government is best suited to run, or even slightly manage, an industry comprising one-third of our entire economy. Or are the benefits of slightly lower forced costs worth the detriment of lower standard of care? No “U.S. official” knows how to price goods and services within the market, much less respond to rapidly changing customer demands, especially if health care “rights” and equality of access are your concern.
We’ve seen a series of government actions to take control of the health care industry since the early 20th century, including Clinton’s failed push in the ‘90s and the second Bush’s prescription drug plan in 2003. Add all of them together and you come to — drum role, please — our official 2010 Act: “requiring” most companies to cover their workers; “mandating” that everyone have coverage or pay a fine; “requiring” insurance companies to accept all comers, regardless of any pre-existing conditions; and “assisting” people who can’t afford insurance.
There has been a pattern of steady, successful pushes for more government requirements, controls and mandates. Not just federal, but state intervention, too — even by our “less Big G” Republicans. And with each new level of control and mandate, not one addresses the real concern of lower costs while maintaining a standard of care. What we do see is Congress, corporations and soon-to-be unions with free passes and exemptions in our new system – those privileged few classes.
Do we so easily forget that just last year, we had our payments to Social Security and Medicare on the line for politicians to “decide” whether they’d like to give them out? Using them as threats to force political hands. Why, oh why, would we want to place another system in their hand to do likewise? Why must we give them more control over basic functions of our society? Indeed, almost all our problems have resulted from the politicization of medicine.
Must we fall prey to Thomas Sowell’s wise words that “only in government is any benefit, no matter how small, considered to be worth any cost, however large?” Every study, every conceivable angle to more equality and access to care for socialized medicine, has resulted in failure. Even Britain and Canada acknowledge this setback but happily state that every problem is one that can be “reformed” away by more bureaucracy.
The real question is why health care costs are so high. Medical prices rise far beyond general inflation. Notice that government doesn’t say we need standard of care improved for the 30 million uninsured. Instead, they say the “costs” are too high for uninsured access. So, if costs were down, no one would need government intervention, right? Instead, we have seen a complete cartelization of the medical field, dating back to 1910.
We can trace licensure back to the Flexner Report in 1910 that gave the medical field their associations (state AMAs) to increase wages of doctors and increase prices in licensed hospitals. Nearly half of all medical facilities were closed post-Flexner Report. For our older readers, do you ever remember in-home doctor visits focused on patient care first with low costs to boot? This is sorely missed with our now-mechanized version of assembly-line care.
For them it’s all about power — power of the medical boards and associations over the field. This hurts consumers and leads to extremely high costs. Similar to the legal field, licensure has proven to be a damaging endeavor — limiting proper supply and demand of medical participants.
In every cartel, producers replace consumers in the seat of power. Removing competing forces like for-profit medical schools and alternative medicines, they created faculty-run institutions propped up by wealthy donors and foundations, governed by perks rather than by the benefit they give to consumers.
Further, the flaws of medical insurance remain prevalent, with the government first encouraging its existence to deal with its previous cost burden. Only in our medical insurance system, unlike fire or other forms, do we see government and insurers pay what doctors or hospitals choose to charge, instead of a fixed sum based on annual fixed premium — thus allowing them to set their own demand.
In economic terms, an unlimited rising demand curve ensures a dramatic increase in prices. Suppliers just set their own demand by unlimited third-party payments. And how the industry howls when caps and increased deductibles are seen as price controls for trying to reduce their indulgences. Not to mention the problem of calculating and preventing moral hazards in defining what “medical care” actually is.
Lo and behold, it appears our entire medical crisis is born, largely from a century of malfeasance. So tomorrow, when government-run exchanges are unveiled, just remember this article.
Don’t let government create an inseparable marriage with your health, for if we let it, only then we will truly utter our vow: till death do us part.
Cory Farraez is a third year law student from Columbus.
