Saturday, January 16, 2010

Can we ignore the predictable consequences that nothing is free?

Health care has been a driving force for much conversation over the past several months for many citizens. Although it may be number four or five on most people’s list, as taxes and jobs may be their top priorities. It is Obama and the Democrats who are making this an important topic as they are the ones who want to take over the health care industry, in essence this has become the epic-center of attention.

A concept that has not been considered and may very well fuel higher costs coupled with the new health care plan if it is not addressed relatively quickly. Whether you have private insurance, Medicare, or Medicaid, the majority of us do not care about shopping for the costs affiliated with health care. We just produce a provider card and accept the charge. Those without coverage and use the emergency room as a doctor’s office, accept the cost despite the expense.

If I were to pay or take out insurance to cover your groceries, would you buy the chop meat or go for the filet mignon as cost would not be a factor since someone else was paying for it?

The motivation behind keeping costs down is free market competition. Using the electronics industry as an example they are priced high as new products become available. As the product becomes popular or a competitive brand becomes available, pricing is driven down as consumers will shop to find the lowest price possible.

Obama's health plan doesn’t permit price competition or free market measures to offset and force prices down. With a government option and a mandate that all Americans are required to have government approved health care, the lack of price competitiveness will be eliminated given that no one will shop for pricing, as everyone will have some form of health care paid for by government programs or private insurance until they are eliminated as they will not be able to compete with the government provision.

If most individuals were told to buy a car with money provided by someone else and there was no need to price shop since the money was being provided, would the buyer purchase a new KIA, used car or head straight for the Jaguar dealer?

Health care will have the same problem. Those who are already on the government payroll do not seek the lowest cost physician but just go to the doctor for anything. They do not search for the lowest priced pharmacy but head to the pharmacy and hand the pharmacist their health care card.
Those who have private insurance do exactly the same thing because the natural attitude is that insurance whether government or private is paying for it so why should I shop price? Also private insurance pricing has little competition because of the fact that one cannot purchase insurance outside of the state in which one lives eliminates national competitiveness for insurance companies and keeps the cost high since no one company has enough insured individuals to reduce cost by volume.

Lasik eye surgery is not covered under current health care plans. Those who used a Lasik procedure price shopped and in the last three years the cost of Lasik surgery has decreased by 30%. Yet every health care plan that is being proposed by Obama and his clique seeks to eliminate the one element of health care which does cause a certain amount of price shopping and that is the co-pay. The higher the co-pay on a plan the more the insured individual is sensitive to the price and as such will research before getting certain treatments and will not seek unnecessary treatment for simple problems. Especially when that co-pay is based on a percentage, not just a fixed price.

The illusion that Obama and Democrats are creating that forced health care and government provided health care is going to iron out all the systems problems and reduce cost is the singular most blatant deception with their argument. Forced health care coverage paid for by government funds, (taxpayers), will eliminate price concerns or price shopping thus competition for services. Also as price competition decreases services will follow since consumers will not be concerned about cost or who provides service because it will all be "taken care of” by taxpayer dollars.

When Medicare Costs payments are cut by 25% as to what doctors can receive as payments, many doctors will opt out of accepting the plan. More and more doctors already are turning away Medicare patients because of the diminished reimbursements and the growing delay in payments. Medicaid is worse; many doctors do not take Medicaid patients.

Promises by the Obama administration is that universal health insurance will avoid all these problems. How is that possible when you consider that the medical turnstiles will be the same as they are now, only they will be clogged with more and more patients? The remaining doctors in this expanded system will be even more overwhelmed than they are now.

Two trends are converging: there is a shortage of internists nationally — the American College of Physicians, the organization for internists, estimates that by 2025 there will be 35,000 to 45,000 fewer than the population needs — and internists are increasingly unwilling to accept new Medicare patients.

Services and the quality of service will deteriorate as doctors will be forced to accept a government controlled pricing schedule. Research will decrease as standard services will be all that is provided because of lack of competitiveness for special and normal doctors services, therefore new and more innovative procedures will no longer be sought after, medical research and discovery will dry up.

When someone else pays for all aspects of health care, it creates a lazy dependency by consumers, eliminates free market enterprise like price and service shopping which as a result raises cost rather than lowering. Government will step in to dictate who, what, when, and where with references to doctors services, and the quality of that service will suffer as a result. We will not have to look far at what will happen when our free market system is bypassed for any given product or service and the resulting higher price and poorer quality to see how destructive and dangerous Obamacare will be for America.

As a people we will have lost our freedom to choose and our right to compete.

As we rush towards the utopian ideal of “free care”, will we ignore the predictable consequences that nothing is free?

~ Joe Sinagra

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