TINSTAAFL

A Facebook friend posted a status today cheering on all the "free" benefits that are taking effect for women looking to have their birth control paid for by people other than themselves. After some back and forth about what "free" means when talking about something paid for with tax money, a commenter (who shall remain nameless unless you are mutual friends, in which case you know who to shake your head at) made the following statement:

It has nothing to do with who pays taxes. It is forcing insurance companies to pay for those services out of the premiums that YOU Already pay them!!!! Why is this so hard for people to understand? We are now getting more services for the money that we pay into the insurance company. They make less profits because they have to cover more services for us! This is a very good thing for all of us!!!!!!!!

Note the liberal use of exclamation points, each one adding an order of magnitude to the comment's inherent truthfulness. Exclamation points aside, here was my response (unedited except for the correction of spelling errors):

It has everything to do with who pays taxes. The feds are setting up a national exchange to administer healthcare. Who pays for that? Taxpayers. Set aside for a moment the fact that this will allow the goverment to pick and choose favorites among healthcare companies. While the feds are allowing states to set up their own exchanges (which of course, must meet federal guidelines on how they are set up, which companies can participate, and how money is distributed), most are sensibly opting out. This will increasingly put the decisions in the hands of a federal bureaucracy.

Ever heard of a federal agency that didn't get bigger and succumb to budget bloat? Me neither. This will only increase costs, especially when you consider that by government mandate, people who don't pay federal taxes (and thus don't pay for the upkeep of this behemoth) will still be covered. Who will make up these costs? The insurance companies? No. Economics 101. When costs go up to a supplier, those costs are passed on to the consumer.

One way the goverment will be tempted to combat this is to enforce price controls on what doctors can charge for services. This is how medicare and medicaid work. It has led to an ever-decreasing number of doctors who will accept patients on those plans. A similar effect will occur if the price controls are instead forced upon insurers: fewer companies will enter into the market and many existing ones will drop out. At the same time, more and more people will be forced into this government plan as companies who today pay for healthcare as a fringe benefit decrease coverage or drop it all together, further exploding costs to the taxpayer.

Ask yourself this: are you aware of any government programs which costs has decreased, which budgets have shrunk? No. Because the definition of a budget cut has been changed at the federal level. When you or I think of a budget cut, It looks like this: "our budget was $1000. We cut it 10%. Now our budget is $900". At the federal level, it looks like this: "Our budget was $1000. We wanted to raise it 50%. Instead we only raised it 30%. Therefore, our budget was cut by 20%."

This will not end well.

It never ceases to amaze me that there are still people who believe the following:

1. Businesses don't pass their costs on to consumers.
2. Arbitrarily setting prices for goods will have no effect on the producers of those goods
3. It is somehow a good thing when a business has its profits shrunk or seized.
4. A government that can run up trillions of dollars in debt will have no problem containing costs.
5. The government can ever provide "free" anything to taxpayers.

Of course, my answer above didn't even touch on the other side effect of price controls: rampant fraud and abuse. Some of those doctors who don't stop taking medicare and medicaid patients instead find ways to overbill the system and reap profits off the taxpayer. If oversight and penalties were better enforced, even more doctors would drop entitlement patients.

For taxpayers, THERE IS NO SUCH THING AS A FREE LUNCH.

Addendum: A later comment brought up the 80/20 rule in the law, that requires insurers to use 80% of revenues on "clinical services" in order to cap costs. Well, that's just another method of price control. And it leads to all the bad things mentioned above. Don't believe me? Then believe the feds, who have seen fit to grant waivers to entities that allow them to ignore the 80/20 rule.

Also, passing laws and then selectively allowing certain entities to ignore them: regardless of your political affiliation, shouldn't you be outraged by that?

New At Say Anything: Canada Has A Goal For How Long Emergency Room Waits Should Be

And I'm betting that the number is a lot higher than you would think. Take a minute and think about your longest wait for emergency room care. Let's assume that the number of hours you have in mind is ridiculously long. Long enough that you got pissed, that you're still pissed just thinking about it.

Now think about what it would be like if you found out that hospitals across the country were shooting for that number as an actual goal, rather than denouncing it as an aberration. I can tell you what it would be like: it would be like living in Canada where the healthcare is "free".

Want to see how your number compares to the reality of Canadian healthcare targets? It's just a click away.

Why Price Controls Don't Work

If this doesn't put you off of government-run healthcare, nothing will.

The problem for a government price controller is that he can never know when the price structure is “right.” He can know when physicians are unhappy with their prices because they will complain, but that does not necessarily mean that those prices should be raised. He cannot know when prices are too high, because physicians benefiting from that mistaken generosity will not complain. The bias is always to raise prices, not lower them.

Medicare tries to solve that problem by limiting how much average prices may rise using the infamous sustainable growth rate (SGR) formula. That formula sets an arbitrary limit, unrelated to conditions in the market for physician services, on year-to-year increases in physician payment rates. Just as the price controller cannot know the “right” structure of relative prices, he also cannot know the “right” average price or its rate of growth. Again, the only signals come from those who want more, not less.

The inevitable result is that Congress breaks its own price control rules. In an annual rite of political contrition, Congress overrides the cuts in Medicare physician payment called for by the SGR. To maintain the fiction that someday we will take those reductions, they are pushed off to the next year—compounding both the amount to be cut and the political problem. As a result, Medicare is scheduled to reduce physician fees by 23 percent on December 1, and another 6.5 percent on January 1. Cuts of that magnitude are political suicide, and if imposed would cause millions of senior citizens to lose needed care.

Using one inadequate formula to make up for another, a built-in bias to inflating prices, no way to know when prices are "right"; what's not to love?

Healthcare Roundup

• The New York Times has an opinion piece on another reason healthcare costs have risen. Hint: it's not (only) the evil insurance companies' fault. Another hint: who decides what constitutes "being healthy"? [link via Instapundit]


• How often do you think your Congressperson votes on a bill without bothering to read it? No matter how high your guess, it's probably too low.


• Fortune rounds up some fun easter eggs hidden in the Senate's healthcare bill. [link via Instapundit]


• Why the "incremental approach" (read, "buy now, worry about the cost later") is how you say, not a good idea.


• This is why politicians don't ask questions in public unless they already know he answer.

Canadian Airlines To Travelers: How Wide Is Your Butt?

There has apparently been a row in Canada for a while now over regulations that Canadian airlines must provide a free (second) seat for obese passengers or those who require an aide for traveling.

The airlines have come up with a plan to determine who really needs the extra seat. It involves a doctor's note and (in the case of the obese) measuring the width of the person's rear end.

This is asinine in itself of course, but his passage really stood out to me:

[Dr. Briane] Sharfstein explained that while Canada’s universal health insurance system provides free health care services to all residents, the reality is that patients often wait months to see their doctor.

Dr. Sharfstein is a spokesperson for the Canadian Medical Association. If that's what "free" healthcare brings with it (and it is), count me out.

Why Did You Give Your Kid Cancer?

I read an interesting article at Slate today about the testing of embryos for the breast cancer gene in the U.K. What looks on the face of it like a great tool for early disease detection raises the possiblity of leasing to parents be blamed for "causing" a child to develop problems later in life.

Read the whole article, but here's a taste:

Before this kind of embryo test (known as preimplantation genetic diagnosis, or PGD), parents weren't held responsible for a bad roll of the genetic dice. If you had a 50 percent chance of passing along a disease, and your child got it, that was a tragedy, not your fault. But with the advent of PGD, the equation has changed. Now you can eliminate your risk of transmitting the bad gene—and if you don't take that precaution, you're "inflicting" the consequences. In this way, today's embryo-screening option becomes tomorrow's obligation.

At some point this type of testing will be widely available. But it won't be cheap. How will this affect us long term? Will people be less likely to have kids if they can't afford the testing? Will kids who grow up to develop cancer be able to sue their parents? What am I saying? Of course they will. Lawyers will make sure of that.

Massachusetts Residents Choke on Free Lunch

Good ol' Mitt Romney was going to show the country how to do "free" healthcare right. Two years after launching his highly touted program, it has served to highlight every drawback of government-run healthcare in high relief:

• bloated prices
• forcing levels of coverage neither wanted nor needed
• higher taxes
• lower customer satisfaction
• inept management
• rationing of care
• doctor shortages

Please read the whole thing.

This country has healthcare problems. Letting the governement take it over is not the answer. It almost never is. Who thinks the government does a good job with taxpayer money now? Anyone?

Tip of the Cap: Instapundit