Counterpoint: Obamacare and Free Market Solutions

Off the keyboard of Eddie

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Published inside the Doomstead Diner on October 7, 2013

Discuss this article at the Economics Table inside the Diner

The Affordable Healthcare Act really doesn’t represent a government takeover of healthcare, nor does it represent what the John Lounsbury claims in Obamacare and Free Market Solutions, that it is ” a step toward eliminating major sources of waste in health care.”

What it represents is possibly the nail in the coffin of healthcare as we know it, at least as far as healthcare delivered at the level of service we have been led to believe we deserve. It really represents an almost complete corporate takeover of healthcare by the insurance industry.

They (insurance corporations) now have the best of both worlds. The government has mandated that ALL citizens will pay them a premium (albeit a subsidized one for the poor), and the government has handed them the reins with regards to determining HOW to allocate the money.

The expected result is that (a) the insurance companies will make out like bandits and (b) the actual providers of care (doctors) will get screwed, and (c) the patient will be taught to accept a lower level of care.

It’s a David vs. Goliath fight, and it’s already all over but the crying. Goliaths always win in the real world. truth is that single payer would be a far more efficient system than the one we are about to receive. So-called “managed care” is really a shell game perpetuated by insurance companies, one in which the rules for getting paid are constantly changing, fees are constantly being downgraded in an arbitrary manner, and under which systems that work are abandoned and replaced by ones that funnel more money to the middle man.

Don’t get me wrong. I greatly favor a healthcare system in which the patient is the “economic arbiter of his own healthcare”. I just think the author is naive about the chances of that happening.

In my opinion, if patients were paying for their own care, they would demand a lot less of it than what they are getting now. Nobody would sit quietly and let the doctors do a coronary bypass on their aging parent if they had to pay a hundred thousand dollar deposit up front instead of Medicare being billed.

It’s true that significant waste exists in a system that charges 100K for a bypass, but the fact is that “managed care” is the way it works already for most people. Medicare and Medicaid are already administered under this type of system, although
the real payer is the government, paying for it with money BORROWED from future generations. Under this type of “management” doctors have already seen their payments drop, private insurance premiums are exorbitant and getting worse, and the insurance companies….are making RECORD PROFITS.

The real coup of Affordable Care is the expected extraction of a premium from young healthy individuals who don’t need much healthcare. This will (supposedly) help cover the old folks. The system already represents an unaffordable burden for the taxpayer, and is projected to increase in cost logarithmically over the next several years. Forcing young people in this country to pay insurance premiums really amounts to increased taxation, and on the demographic group that can least afford it, and who are already on the hook to pay far more than their fair share in the years to come.

Deficit spending is paying for Medicare/Medicaid now, and those deficits will increase substantially under Affordable Care. The premiums collected from those not now in the system won’t cover the shortfall.

Whatever care gets delivered, somebody has to pay for it. Although inefficiencies do exist, putting the insurance corporations in charge of healthcare does only one thing. It creates a very big, expensive middle layer of management, that does little to contribute to patient care, but skims much of the premium dollar.

Insurance companies have a tried and true way of making money. They take the premium, give the patient the lowest level of service he will accept, and then try to screw the doctor completely out of getting paid. The insurance companies already own the hospitals. They would like to own the doctors too. They are pretty close, because they set the fees. And they are the final arbiters on whether or not to pay. Sweet deal, for them.

Any doctor who has been around the block would greatly prefer a single payer system. We had that with Medicare/Medicaid for a long time, and it more or less worked. At least claims usually got paid, albeit at a reduced fee compared to private pay. Now it’s a total crap shoot. Doctors are forced to deal with as many as 50 or more corporate entities when they bill for services. Each company has it’s own arbitrary rules designed to delay and obfuscate payment, and some are known to NEVER pay a clean claim without a fight. Yeah, that creates efficiency…NOT!

elephant-in-the-roomThe elephant in the room really is Peak Oil. The real problem is that we no longer have the abundance that cheap oil provided, and no system of healthcare can possibly be conjured that will be sustainable…without greatly limiting certain services that are now deemed sacrosanct.

Eventually all this top-down “efficiency” will pass away. Healthcare will be 100% local and will vary according to local abundance and the ability of people to actually pay for the service. I don’t know how long that will take, but it will happen.

In the meantime, don’t look for the new system to reduce your taxes, raise your level of care, or empower you to change anything.

Prepare to be assimilated.


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