* Re: Health Care
Topics: Health
29 Oct 1993
From: ervan
> [ mandating insurance coverage levels and mandating rate caps is a
> recipe for disaster. ]
Yup. It's one of the cynical manipulations involved in selling the plan.
Clinton can promise costs won't go up because he is going to freeze insurance
costs. He can also promise care won't be rationed because service prices
won't be fixed. He has even been so blatant as to say there are no price
controls in his plan, uh huh.
Now, the question is this: what exactly will be the effect? Will costs be
contained by rationing service below the level people want? Or, will costs
continue to soar by providing people will all the medical care they want
instead of an amount that is cost effective? No doubt some mix of the two.
Either way we lose.
The hidden, and perhaps most dangerous, cost of government style rationing
is that the pace of new innovation will slow. If GE makes a new super precise
CAT scanner it can now sell it to every hospital who wants to attract doctors
or patients with its ability. Under the CHP, such purchases will have to
be approved. The approval process will not only be absurdly difficult
but the system will be against it. I mean that government health services
have some fee cap that they have to meet. If they deny care based on
buying speculative technology there will be hell to pay. Private hospitals
can simply raise their fees or borrow money for the investment. One need
only compare the USPS to Fed Ex to understand this phenomenon. One need
only compare growth in zoned cities to unzoned ones.
Let me put it another way. We currently spend 12% of GNP on health care.
Everyone agrees that is too much. Why? It has become possible to buy
more health care, people want more health care, and by and large they are
buying what they want. What if we had imposed the new standard (that many
states are already using) of forcing hospitals to submit new purchases
for government approval back in 1970? Well, health care costs would still
be at 9% of GNP. Would that be a cost savings? NO! We would not have
CAT, NMI, lithotripters, or any of the rest. We would have been denied
the possibility of what has turned out to be that we actually want. The danger
in CHP is that whatever new thing we would have had will now be lost to us.
That will serve to slow the cost increases, but it is not a savings.
The U.S. has clearly been the medical technology leader in the world.
Socialist health care has in part done no worse than it has because much of
the technology generated by our system can then be exported. I'm not holding
my breath for Canadian health care breakthroughs.
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