Wednesday, July 15, 2009

How to complicate healthcare needlessly


All of this bureacracy in order to replace what would otherwise be a simple transaction between two people: the patient and his or her healthcare provider.

The "solution" to healthcare is to get government out, not give government total control. Government has distorted the healthcare market just as they distorted the housing market, by handing out subsidies (tax-free healthcare benefits) and by directly intervening in the market (medicare, medicaid).

If Congress simply eliminated the tax subsidy distortion, by either doing away with the employer-only tax deduction or by allowing everyone to deduct healthcare costs, and if they also eliminated artificial restrictions on the market such as mandated coverage and barriers to entry, we could probably solve 80% of the healthcare "problem" without creating so much as one bureaucracy. Just let the free market work, and it would fix things just as it has in countless industries every day. How hard is this to understand?

UPDATE: Keith Hennessey has written an excellent explanation of how the new healthcare mandate would end up shafting about 8 million people. "For those who do not or cannot comply with the mandate, they end up in the worst of all worlds – uninsured and paying higher taxes." This is simply outrageous, and it is one more illustration of how the government can't possibly "fix" healthcare by increasing regulations and imposing mandates. The subject is so complex that it can only be handled rationally at the individual level.

ONE LAST UPDATE: As this article explains, a healthcare mandate is unconstitutional.

4 comments:

W.E. Heasley, CLU, LUTCF said...

Love the "flow chart"!

Would that be the same "flow chart" of the …..Must Be Recalled Quasi Stimulus Plan?

Common authors.

Antonio said...

Amazing chart! Just two considerations about public healthcare systems:

a) I don't think there's a full correlation between expenditure and results when you talk about health in aggregate terms. I mean, there's a lot you can do in terms of education (walking a little and eating more fruit is not state-of-the art medical tech, but it works).

b) Never understimate people's aspiration to a better healthcare service. In countries where Social and "free" healtcare is common place, if you can afford, you pay a medical private insurance (paying twice, because you keep on being taxed for the public healthcare system).

Louis Cyphre said...

I still believe that Democrats, and the statists of all kinds that support them, are not trying to "fix" anything with this. They are simply trying to fulfill an ideological agenda. Socialized health care is “good”, even if it does not work.

It is better to be wrong with collectivism than right with market economy.

Scott Grannis said...

I have a really hard time understanding why they want to do crazy things like universal healthcare. Either they are totally ignorant of economic realities, or they are blind to everything but their ideology. Perhaps you're right. Still, it makes no sense.