sunset from behind the wire

sunset from behind the wire

Sunday, August 23, 2009

Government Doesn't Reduce Costs

Government efforts to control the cost of healthcare have all failed. Cost control is a feature of decentralized, competitive markets, not of centralized bureaucracy. Incentives, not mandates, reduce costs. Anyone who has ever run a business understands that there are constant variations in costs for labor, facilities, raw materials, etc. In order for any business to prosper, it must respond quickly to market forces. Government bureaucracies carefully set regulations and reimbursement rates through broadly applied rules that are bent based on political considerations. They move slowly. They NEVER respond to market forces.

Medicare costs (overseen by the same government that would manage the entire national healthcare system) enjoy huge market power in purchasing and it should be the easiest to control in terms of managing costs. The truth? Between 2000 and 2007, Medicare's hospital and physician reimbursement rate soared annually by 5.4% and 8.5% respectively.

Medicare was structured as a ponzi scheme. Medicare tax contributions don't come close to fully funding the care it doles out. Today's workers subsidize today's recipients to the extent that it requires 3.7 workers to fund care for EACH Medicare recipient. So if you think that the money you're paying into Medicare today is high, it's about 25% of what it should cost to fully fund it. The Medicare system in America is broke and it will require a massive infusion of tax money to keep it rolling. As the nation ages, the numbers will become even more significant.

Expanding government's inability to come to grips with any major problem or to pay its bills without unrestrained borrowing against future generations should teach us that this is NOT the way to reform healthcare.


  1. Well said, fine sir!!! It really is easy to see using short-term history as an example ... The federal government can't possibly administer a national health care program with any degree of efficiency. What could make anyone believe otherwise?

  2. I work for state government and your little banner above pretty much sums up my concerns about all of this. I've been trying to formulate a blog but I fear I might be off on a few points, since I haven't really kept up with all of it as well as I should.

    With employees, the old saying is true: "you get what you pay for." At least in TN, state employees are paid well below the average income in the private sector for what they do. So you have to ask yourself what kind of person takes a job like that? Mostly people who have reached middle age and are tired of the rat race, plus single moms who want a job that they can make secondary in priority to their lives, PLUS just plain lazy people. I stay because it doesn't drain me of the energy I need in my off hours to write. It's that simple.

    We aren't given raises if we perform well. In fact, you're given the same raise whether you coast all year or work your butt off. There are hard workers but all the work gets dumped on them. All you have to say is, "I don't want to do that" or just screw it up and a supervisor takes it from you and gives it to one of the overloaded employees.

    So no, government can't efficiently handle your healthcare. I could go into more detail -- about how employees LOVE to mire you in red tape because it delays them having to do anything -- that sort of thing, but I think you get the point. Until government employees are paid based on performance and FORCED to work out of fear of being fired, nothing's going to change. And your claim will take MONTHS to process. You could die waiting for something to be approved.

  3. Today, I have to stop by the Department of Motor Vehicles. I'm already getting angry just thinking about it. I'm sure that the clerk woke early this morning just to perfect her distant gaze and demeaning tone of voice.

    And, as always, I'm guaranteed to have gotten into the wrong line. Do I want the government handling my medical care? Guess!

  4. Ooo, sign me up for THAT. Not.

  5. It's like sitting in the VA, waiting to be seen.

    Ten Filipino employees converse in Subato or Tagalog behind the counter while you wait. Thirty minutes later one of them will say, "what you wait?"

    "I have an appointment with Dr. Feel Good."

    "He go lunch, be back two hour."

    So you go to lunch and come back in two hours. You approach the Filipino clerk about your appointment.

    After ignoring you for ten minutes, she comes over, "what you want?"

    "I had an appointment with Dr. Feel Good. Remember? He went to lunch and I came back in two hours."

    "You have an appointment for afternoon?"

    "No, I had one for this morning at 11 am."

    "You need an appointment for afternoon."

    (it's June) "Can you come back Tuesday, September 15 at 9 AM?"

    That's what I want for the nation. The Veteran's Administration level of concern and care....

  6. AND if you took a bullet or two for the country and they showered you with medals, this administration brands you as a "potential terrorist" because you might be pissed off about the socialist take-over.

    Welcome to the ObamaNation.


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