Tuesday, July 07, 2009

Health Care Democrat-Style: No Reform At All? Samuelson

Uncontrolled health spending is almost single-handedly determining national priorities. It's reducing discretionary income, raising taxes, widening budget deficits and squeezing other government programs. Worse, much medical spending is wasted...It doesn't improve Americans' health...The Obama administration's response is to talk endlessly about restraining health spending...The president summoned the heads of major health-care groups representing doctors, hospitals, drug companies and medical device firms...All pledged to bend the curve...Does anyone believe the American Medical Association can control the nation's 800,000 doctors or that the American Hospital Association can command the 5,700 hospitals?...The central cause of runaway health spending is clear. Hospitals and doctors are paid mostly on a fee-for-service basis and reimbursed by insurance, either private or governmental. The open-ended payment system encourages doctors and hospitals to provide more services -- and patients to expect them. It also favors new medical technologies, which are made profitable by heavy use. Unfortunately, what pleases providers and patients individually hurts the nation as a whole....Wrong Way on Health Care 'Reform', Robert Samuelson, Washington Post, July 6, 2009

What's interesting about economist Samuelson's view is that it reflects some private opinions by the President, that a good model would be the Mayo Clinic, which does not operate on the fee-for-service plan. Everybody at Mayo, including all of the doctors, is an employee. Malpractice insurance is held by a group instead of by an individual. There's no motivation to go the unnecessary, unneeded, or inappropriate mile in surgery or treatment to improve one's bank account.

One thing is clear, not only from Samuelson's article, but from hundreds of studies, essays, and reports on the Democrat plan to pick up the tab for the “uninsured.” The uninsured already get health care; it's subsidized by patients with insurance, and by physician and hospital write-offs. The Democrat plan will raise the cost for providing care to this group, a third of which is made up of illegal immigrants, to far higher than we're already paying now. What this looks like is another variety of cronyism, or of rent-seeking for Democrat constituents.


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