Original health care system, up to 1950s: the doctor is paid for his services by the patient. Doctors therefore have an incentive to be price competitive – if they charge too much, they will have no patients, provided they are prevented from monopolistic collaboration like any other healthy industry. Patients have an incentive not to use medical care unnecessarily, because they have to pay for it. The technology to perform fabulously expensive procedures didn’t exist, for the most part, so the medical system didn’t have to cope with people needing organ transplants or extensive chemotherapy treatments.

Medical system from 1960s to today: companies began offering increasingly comprehensive medical insurance as an employment incentive. Instead of covering catastrophic needs, this “insurance” came to cover virtually everything, destorying the patient incentive to use as little medical care as possible, and the doctors’ incentive to control costs. Deep pocket insurance companies pay huge amounts of money the consumers never see, and impose expensive requirements on doctors and hospitals.

Besides direct government interference, the other factor in exploding costs has been the cost of malpractice insurance and the rise of opportunistic lawsuits, resulting in malpractice insurance costs passed along to insurance companies and unnecessary “defensive medicine.” There are few systems in the world that place as much distance between the provider of a service, and the consumer. Throw in the way hospitals shift costs for covering the uninsured onto paying patients (meaning their insurance companies), and keep in mind that almost no one pays for their own health insurance directly – it’s almost always paid wholly or partially by your employer – and you have a system that looks like this:

Consumers of other products and services >> employers (who charge higher prices to cover all payroll costs, including health care) >> insurance companies >> health care providers. This runs parallel to taxpayers >> government Medicare, Medicaid, and other programs >> health care providers. Health care providers are heavily influenced by government, insurance companies, and trial lawyers, all of whom have more to say about your medical treatment than you do.

It’s a bloody mess, but it will ony get worse if taxpayers fork over huge amounts of money to the government to pay for health care, since this tax will be as “progressive” as any other. “Free” health care will do what price controls always do: reduce supply, reduce quality, increase demand. Health care is presently distributed inefficiently by a complex system of insurance companies, government agencies, and employers; under socialized medicine, it will inevitably be distrubuted by political considerations and rationing.

Doctor Zero on March 27, 2009 at 3:18 PM

I WOULD HAVE DIED. I WOULD HAVE DIED!!!!!!!
How many people will be thrown under the bus because it costs too much or it takes too much time? Are you willing to risk being one of those people? Not me.

oakpack on March 27, 2009 at 5:04 PM

Well I’m glad you’re still with us oakpak, and your case is an excellent example of why government controlled health care is a DEADLY BAD IDEA!

Liberty or Death on March 27, 2009 at 5:40 PM

Plus one million! Glad to hear you’re okay.

The two things government should never be allowed to do is speak for a “voiceless” constituency, and pass laws if the victims can’t complain when they fail. Environmentalism is the pre-eminent example of the first, socialized medicine the most awful example of the second. The least satisfied “customers” of socialist medicine won’t be able to file complaints, because they’ll be dead.

Doctor Zero on March 27, 2009 at 6:48 PM