Monday, June 13, 2011

On Healthcare

A friend of mine emailed me this message regarding a quote from Rick Santorum:
So would you call this one slightly over-the-top?
"Almost 60,000 average Americans had the courage to go out and charge those beaches on Normandy, to drop out of airplanes who knows where, and take on the battle for freedom.  Average Americans.  The very Americans that our government now, and this president, does not trust to make decision on your health care plan.  Those Americans risked everything so they could make that decision on their health care plan."  
First, that is just plain dumb....storming beaches of Normandy for health care.  Second, what choice?  Do you have a realistic choice outside of taking what your employer offers?  

Grade:  FAIL!

Here’s my response (rant):

Under Obamacare, healthcare companies must accept all patients, even those with pre-existing conditions; they must spend 80% (MLR) of their premiums on healthcare; and they cannot now implement a cap on lifetime coverage. 

Ignoring the social aspects of these new rules, what do you predict will occur with the average premium cost?  Yes, it will increase.  Now, Senator Feinstein has introduced a bill that would give federal regulators the power (only state regulators currently have this power) to stop insurance companies from raising premiums.

So, Obamacare forces insurance companies (whose profit margins are in the 3-5% range) to incur increased costs and subsequently strip them of the power to pass along some of those costs to consumers. Genius.
 In sum, our government wants to bankrupt the industry, bail them out, and take them over ~ ergo, single-payer system.  This will undoubtedly happen.

I object to 271 people (219 Reps and 51 Senators + 1 Prez) using our legal system to completely rearrange, to their personal liking, our healthcare system.  The private sector, NOT government, over the decades has built, advanced, perfected, and delivered healthcare services to customers despite heavy regulatory burdens and massive government intervention. 

Entrepreneurs and innovators risked their labor and capital to deliver a product/service (healthcare) in exchange for profit.  This profit, a vital market signal that customers value highly the corresponding product/service, ensures that more of the product/service (healthcare) will be brought to market.  Falling profits, or worse, no profit, signal that the product/service isn't valued by customers OR that government has intervened to an extent that it has captured (through regulation or taxes) all economic profit.  The latter will prove true in our case.

Government, through its decrees, mandates, and directives cannot successfully centrally manage an industry as complex and as large as our healthcare system.  Government cannot predict with any degree of accuracy which services will be valued by customers; it doesn’t possess the knowledge of millions of consumer’s preferences about healthcare; it cannot efficiently allocate capital (and labor) across broad sectors of an ever-changing industry; it cannot effectively guarantee every single citizen access to healthcare without suffering severe shortages which must be overcome by rationing.

I could go on, but I have work to do.  It’s pure hubris to think that Senator Reid could fashion a 2,000 page bill behind closed doors to improve healthcare.  Not one committee hearing was held on this bill.  How many experts (doctors, lawyers, healthcare administrators, etc.) were brought to Capitol Hill to testify about the bill’s consequences?  NONE!  Never before in our history has a bill, laden with huge social policy ramifications, been rammed through the Congress (on Christmas Eve mind you!) without any vetting by a Senate or U.S. Representative hearing/committee.  This was pure foolishness, hubris, insanity, regrettable, arrogant ~ in short, a crime.

That’s what I have to say about Obamacare.  I pray the Courts find this bill as obnoxious and sickening as the majority of Americans find it.  If the bill is struck down, every single person who voted in favor should resign in shame, for they will have failed in their sworn duty to uphold the U.S. Constitution.


  1. I would add this, since my friend thinks it abhorrent that companies profit from healthcare:

    The more profit in healthcare, the more healthcare we will get. Likewise, the opposite is true: the less profit in healthcare, the less healthcare we will get.

  2. Why shouldn't people profit from providing healthcare? Should doctors not be paid? Nurses? Researchers? They are providing labor. In order to finance health provision capital goods, like hospitals, we need financing. Don't those who put up the financing get some recompense? If not, why are they putting up the financing?

    If you want to minimize the economic profit that healthcare companies earn, then remove all anti-competitive regulation. It works in every industry where it has been tried.

  3. I see several paragraphs of "rant" and no answer to the original question(s) posed by said friend. What did I miss?

  4. What were the questions? Brad didn't even right those down!