Health Insurance…or Healthcare…Choose One

At least as far back as the funeral societies of ancient Greece, humans have formed co-ops or investment groups to manage the kind of losses that happen to people rarely, without warning, or as in the case of a funeral, only once. Early insurance organizations, like modern ones, averaged and distributed the losses to make them less painful.
These were not comprehensive relief plans. Maybe a best friend would compensate you for the loss of a favorite hat, but the early societies and later insurance policies were intended to minimize only the loss of a ship, a precious heirloom, or a loved one. Such insurance was rarely compulsory because the benefits were clear, and forced participation would change the mathematics of sustainable cost versus periodic benefit.
Imagine what would happen, for example, if lawmakers decided that legal minimum auto insurance wasn’t enough. What if they decreed that insurance companies must pay every driver for regular auto maintenance, new shocks, batteries, and even the cost of gas? Imagine tax money and tax benefits stirred into the mix. The mathematics would go so out of whack that it would no longer be anything like insurance. We’d have only a usuriously inefficient pre-payment scheme for everyday occurrences. The rare collisions and breakdowns for which you’d really want insurance would become insignificant to the total costs involved.
So to stay in business in such a regulatory/fiscal swamp, auto insurance companies would start jacking up premiums and denying claims. Outraged by rising costs and worsening service, drivers would beg lawmakers to enact cost caps and more regulations against the now-vilified mechanics and insurance companies. But the pricing rules, bizarre service regulations, and now-necessary political lobbying would drive some mechanics and insurance companies out of business, while others would learn the game and rake in the dough. On the other hand, even the cleverest shops would have to hire legions of front-office staff to handle the increasingly tricky paperwork and guidelines. Grumbling about long waits, co-payments, changing service providers, and extra charges for high octane fuel, motorists would forgo routine oil changes or new tires, and cross their fingers against the catastrophic breakdown. Some motorists would seek “alternative” car care services from chanting transmission savants who’d burn incense to heal a dying clutch.
Ultimately, the bloated world of automobile services would collapse, leaving only a niche market catering to the elite.
So far, this is only a dream scenario for public transportation advocates.
Now here’s the real question:
Which would you rather have -universal health insurance, or health care? You can’t have both. The numbers don’t work, and we’re already witnessing the result.
In a free market, prices drop and availability improves with every technological advance. That’s not what’s happening in healthcare, is it? Increased demand should lead to increased supply unless somebody uses force to change the rules.
That force has been building against healthcare since the late 1800’s, when Germany’s Chancellor Bismarck made socialized health insurance the latest thing from Europe. Wage and price controls during WWII, along with a tax exemption for employer-provided health insurance sealed a devil’s bargain at a time when technology was revolutionizing healthcare. Costs should have come down, but they were climbing, just as house calls and bartered care were getting pushed away.
And healthcare became tied to employment, because healthcare became one and the same as health insurance. Health insurance was a perk of work with the real costs tax-subsidized into invisibility. This caused a moral hazard, by which people began to use healthcare services differently than if they knew the actual costs. This started the upward climb in real costs. So without a job to hide those costs, healthcare spiraled out of reach.
Then President Johnson signed Medicare into law in 1965. The doctors, businessmen and insurance companies who’d previously opposed socialized medicine hardly dared to speak against this keystone in the arch of the “Great Society.” Almost at once, market logic was replaced by all that’s worst about politics.
Not so long ago, congress started using Medicare money to pay politically savvy teaching hospitals to reduce the number of doctors they trained. As with paying farmers to ignore farming, our congress decided that healthcare needed price supports. Yet Medicare payments for real services have been cut again and again across the board, with the most dramatic cuts yet just ahead.
As you should expect with politics, however, these cuts don’t lower costs…just the opposite, in fact, is happening. Proposed “utilization rate” and “self-referral” rules intended to cut costs and abuse already, for example, force doctors to order more expensive tests using ionizing-radiation instead of cheaper, safer, and sometimes even more-effective ultrasound tests. I’ve personally witnessed this, and a good friend of mine (a medical professional himself) has suffered a far more personal medical imaging horror story in which taxpayers got charged ten times the necessary cost, and my friend suffered serious medical complications.
But there’s more to say about where we’re headed.
It’s been said that blood is thicker than water …and that money is thicker than blood. Your mother is not writing the rules that determine when you get care, and when you die.
We’ve long ago moved past the ideal of patient-centered care, and into cost-accounting for the Common Good. That’s dangerous enough. But we’re so collectivized in risk (while “privatized” in profit) that everyone has a financial hook in you. We all want you healthy enough to work and pay your share of the burden. But just as a transmission can’t tolerate a broken gear, the collective We The People (and the bureaucrats who do our dirtiest deeds) will cast you aside when you’re too weak to work.
Proper pain management is expensive, and doesn’t add to the machine’s bottom line. Prolonging the life of non-productive cogs doesn’t make sense to the Common Good, does it?
And despite what Obama the Chicago politician promises, doctor-assisted-suicide/euthanasia is already in discussion. Seriously.
If you’re up for reading 1018 pages, you can read it for yourself. (I’ll make it easy…read the context before and after page 428 here
And the long run economics are not sane.
For the past hundred years or so, almost every nation on earth has operated on a debt-currency, central banking model that’s, well …a Ponzi Scheme that makes Bernie Madoff look like a petty pickpocket. The true costs of each generation’s debt is deferred into monetary inflation and social re-engineering as a bubble to beat all bubbles.
True, I’d rather go broke on healthcare than on war; and maybe that’s a choice to make. But going broke, in case you haven’t noticed, is a global phenomenon already; and, once again, despite what you’ve been told by the class of people with a 100-year, 100% record of error, we’re just getting started.
The third-party, tax-policy-created healthcare mess we have now must go. But what I see people debating is whether to put out this fire with dry wood, or gasoline.
As every chapter of human history amply demonstrates, politics isn’t the solution, it’s the problem.
We could fall back into funeral societies if we had to. Without cars, we could still get around just fine. I thank God that our politicians haven’t yet proposed food insurance, or a “universal food supply.”
But if we keep letting politicians sell insurance and practice medicine, we’ll see what it’s like to live without health.
By Andrew Horning, orginally posted on his blog We Declare.

Nobel Laureate Economist Milton Friedman explores the unsettling dynamics set into motion when government imposes itself into the health care system.

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