Monday, June 07, 2010

Just A Little Bit On Health Care

I've got the other half of my end of Lost post kicking around, along with a couple of other "big" topics, but while I finish those up I wanted to send me readers in the direction of Reason's Peter Suderman, who's done a wonderful job of covering many of the effects of Obamacare for Reason's Hit and Run. Today's first post hits on the administration's plans for keeping down health insurance costs in private markets: Sending nasty letters to insurance companies, strongly encouraging them to keep prices low and service levels high in the face of escalating health care costs. Today's second post relays the story of a Virginia "consumer-driven" health insurance start-up, put out of business by the regulatory uncertainties of Obamacare.

Just a few points:

1- Regulation of any sort always drives up the cost of doing business and regulatory uncertainty all but ensures that no new competition can enter the market place.

2- If you've paid any attention to the spiraling out of control health care costs in Massachusetts, you've got to see this is where we're headed as a nation. We're headed toward health insurance as a quasi-public utility and that's not good news for consumers. In a way, what we've got is sort of the inverse of what liberals point out as the folly of privatization and deregulation. Markets are wonderfully dynamic things, but putting a private company in charge of a public good does not a market make. Lousy and/or corrupt privatization plans only create the inefficiency of government while taxpayer money goes into someone's pocket. And the more government involvement we get in the health insurance industry, the more you have to wonder what purpose it serves to have private industry making any sort of a profit simply by putting government mandates into effect. If that sounds like an argument for universal health care or a government run system, it is, in a way. And I'm talking off the cuff here, but the problem is that there becomes a point when a heavily regulated industry (or public utility operated as a for-profit business) becomes even less efficient than government. Why? Because at some point, these industries become virtually institutionalized, nearly as protected by law as the government, but less accountable, and retaining a commitment to making a profit.

I know some folks out there think that this was this was the Obama plan all along, to surreptitiously pass universal health care as this supposed private-public partnership failed, but I don't buy such conspiracy theories and would point to a far simpler explanation. It's precisely the same fallacy of central planners that Hayek, Freidman, and countless other economists have been criticizing for decades. Each generation thinks they've learned the mistakes of the past and they can be smarter than the marketplace, but it never works out and you always wind up with the sort of impending disasters we're seeing today.


Anonymous Anonymous said...

How refreshing it is to see a viewpoint that embraces self-determination but does not discount the possibility of a true social healthcare system. Thank You.

2:19 PM  

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