Think

Tell you straight - no intervention
To your face - no deception
--Eurythmics

As myriad points of view w.r.t. the health care debate make themselves known, it is tempting to seek a 'trusted authority' to shape your view for you.

Don't outsource your brain. Your most trusted authority should be your power of reason.

Think through the following questions which form the issues around which the health care debate, and nearly all government programs, are shaped.

1) What is likely to happen to supply if we put a ceiling on price of health care services (e.g., a maximum reimbursement for a medical procedure)?

2) What is likely to happen to demand if we make health care ultra low cost or free to a segment or group of the population?

3) What is likely to happen to time to access services under 1) and 2) above?

4) If government control increases in the health care system, will motivation to improve/innovate likely increase or decrease?

5) Are health care costs likely to increase or decrease under a health care system subject to increased government control?

6) With future liabilities of present government health care programs such as Medicare and Medicaid already estimated at $30 trillion or more, and national debt in the tens of trillions, how do we pay for such a system?

Your power of reason will likely point you in the following directions:

1) Whenever maximum prices are set, supply shortages develop. Less health care services will become available as lower prices discourage providers from operating. Need an excellent oncolologist or orthodontist? There will be less of them available as many bright ones will pursue other careers that promise greater reward.

2) A general rule of thumb: If the price of a valuable good or service is free, then demand for that good or service is unlimited. Segments of the population that get a price break will consume more health care than they would otherwise. This, of course, further restricts availability for others.

3) Less supply, more demand...Time to access the health care system will certainly increase.

4) In market systems, buyers--not sellers--drive innovation thru their search of value. Producers who become more efficient or who innovate for their customers are rewarded with business. When people pay less out of pocket because they are backstopped by the government, they are less driven to shop around and make value-driven decisions. Providers have less incentive to innovate. Add the price caps in 1) and you've further restricted innovation. Top it off with less entry into the industry, as entrepreneurs are turned off by the low prospects of reward by the rigid industry structure, and you have the static condition which has defined government programs through the ages.

5) Less supply, more demand, less efficiency, reduced innovation. Costs have only one way to go.
6) Some combination of what we do already when we fund deficit spending: tax, borrow, print. Because we have no savings, the cost of providing more health care resources today comes at the expense of future living standards. Our kids will pay.

position in USD