medical price controls

Topics: Health, Regulation
15 Oct 1994

From: ervan

I don't have much faith in the CBO, but when they think more government is
bad, I take it as the gospel truth ;-) In prowling for something else, I
found the following (their summary of a previous chapter):
Price controls on medical care have been imposed several times in the United
States. Overall, the evidence from the Medicare experience of the potential
effect of price controls on health care costs suggests that more services
are provided when prices are reduced across the board; price controls on one
type of service create incentive for providers to substitute other services
for the controlled one; price controls established for s specific population
group (such as Medicaid enrollees) may result in higher prices charged to
other population groups; and, when prices are controlled for only some
groups, they may have less access to care. Thus, unless price controls are
combined with systematic monitoring and review of all providers to prevent
the volume of services from rising, their potential to solve the problem of
health care costs is limited.
CBO report "Rising Health Care Costs: Causes, Implications, and Strategies"
4/91 (Y 10.2:H 34/3).

If you try to cheat supply and demand with price fixing, either:
1) it won't make any difference, people will pay the same some other way.
2) it represents a perverse tax on the rest of the population.

The conclusion to this otherwise true observation is a jarring non-sequitur:
since all small scale efforts at socialism have failed, complete socialism
will be necessary.

Quote of the day:
"You simply cannot go around the country making promises you cannot keep."
---Bill Clinton