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PrintJanuary 10, 2010
The health care reform Medicare trap
All of us are going to die. Knowing how and when are answers not provided. The imposition of Obamacare does not provide the answers, but for most of us its passage means the terminal event is likely to be sooner rather than later.
From the Wall Street Journal:
President Obama last year praised the Mayo Clinic as a "classic example" of how a health-care provider can offer "better outcomes" at lower cost. Then what should Americans think about the famous Minnesota medical center's decision to take fewer Medicare patients?
Why would Mayo consider taking fewer Medicare patients? Undoubtedly, the answer is a surprise to public sector pinheads, but not to ordinary people:
Mayo says it lost $840 million last year treating Medicare patients, the result of the program's low reimbursement rates. Its hospital and four clinics in Arizona-including the Glendale facility-lost $120 million. Providers like Mayo swallow some of these Medicare losses, while also shifting the cost by charging more to private patients and insurers.
The health care reform bill cuts back Medicare reimbursements even more, because that "savings" is needed of offset the costs of the new "reform."
If the Mayo Clinic is President Obama's model of cost-efficiency and they cannot afford to service Medicare patients under current reimbursements, just who does this Administration believe will be able to service Medicare patients, especially when rates will be reduced even more? That question should be bothering everyone, old and young. It won't be answered because there is no acceptable answer!
Resources of all types need to be rationed. That is one of the primary functions of markets. Free markets are required for markets to do so efficiently. Price controls mean markets can no longer perform this important function. Interventionism based on bureaucratic rules and coercion must substitute for what would otherwise occur normally and efficiently. Prior to the intervention known as Medicare, our health care market was a free market. Those of us old enough to remember those days remember paying cash for services received and doctors making house calls. Since Medicare, government rules and regulations have directed our healthcare system. There has not been a free market in medicine for decades.
Unfortunately Obamacare "reforms" will further reduce both the quality and quantity of medical care. By controlling (lowering) prices below the free market level, the supply of doctors, hospitals and care facilities will shrink.
Monty Pelerin at www.economicnoise.com
