Gabriel E. Vidal has written a great article on mises.org about the Health care Legislation that is being rushed through the House and Senate before the August recess.
He starts with a summary of a speech that the President gave to the AMA in June of this year.
In his speech to the AMA in Chicago June 15, 2009, Obama shared his diagnosis, solutions, and justification for healthcare reform: health costs are spiraling out of control and are a threat to the economy, families, businesses, and the federal government. The current system is unsustainable. Costs are increasing faster than they should because we spend money on things that don’t make us healthier. We equate expensive care with better care. We overuse and reimburse for treatments that are not needed and we pay for quantity instead of quality.
We can categorize Obama’s major solutions to the healthcare crisis as follows:
1. Payment reform. Change how providers are paid by bundling payments so they team up to treat episode of care or illness. Pay for quality outcomes.
2. Knowledge reform. Invest in examining and disseminating knowledge of what treatments are more cost effective and clinically effective to cut costs.
3. Information-technology reform. Upgrade medical records from paper to electronic. This will avoid duplication of tests, track information from doctor to doctor, lower administrative costs, improve doctors’ productivity, and reduce medical errors.
4. Insurance reform. Make the purchase of health insurance mandatory for everyone. Eliminate preexisting-condition waivers and insurance companies’ ability to “cherry-pick” whom to cover. Introduce an affordable public option for individuals in order to inject competition into the marketplace to keep private insurance companies honest.
The President “assures us that this is not government-run healthcare, that this is not a single-payer system, that the only consequence to these reforms is that healthcare will cost less and that anybody who denies this is misleading or does not understand the facts. Without his reform, he insists, costs will grow unsustainably, which will threaten reimbursements and the stability of the healthcare system.”
Vidal then points out that because the Obama Administration uses “faulty logic to diagnose the problem”, it’s solutions to the healthcare problem are not only faulty but also destructive.
Vidal explains that:
The correct framework within which to diagnose the problem is to admit that costs are out of control because they do not reflect prices created by the voluntary exchange between patients and providers, between customers and producers, like every well-functioning industry.
Instead, health costs reflect the distortions that government regulators have introduced through reimbursement mechanisms created by command-and-control bureaucracies at federal and state levels.
But it is theoretically and practically impossible for a bureaucrat — no matter how accurate the cost data, how well intentioned and how sophisticated his computer program — to come up with the correct and just price. The just price of a health service can only be determined by the voluntary exchange of a patient with his hospital, physician, and pharmacist. The relationship between the patient and his private provider has been corrupted by the intrusion of government and its intermediaries (HMOs, for example) to such an extent that we can no longer speak of a relationship that can produce meaningful pricing information.
Vidal goes on to explain that, “Obama suggests that Medicare and Medicaid are responsible for the cost spiral because they pay for quantity rather than quality, because they do not differentiate between services that make people healthier and those that do not, because they pay for services that are not needed.”
Contrary to Obama’s suggestion that knowledge of clinical effectiveness and cost effectiveness can be obtained and disseminated, there is no rational way to evaluate cost effectiveness outside of the free market. Central health planners cannot compare and recommend the best option between two different combinations of drugs, hospitals, and physicians to treat a particular ailment. It is not just a matter of figuring out which combination offers better outcomes and lower costs. In fact, the bureaucrat actually needs prices to make that comparison! This is also why Obama’s ideas on payment reform to change how Medicare pays providers, and knowledge reform to investigate which treatments are most cost effective will never work and will increase costs and reduce quality. We have explored this argument in detail here.
Please read the entire article here:
Why Obamacare Can’t Work: The Calculation Argument
You can track the healthcare bill here: H.R.3200: America’s Affordable Health Choices Act of 2009
More Health care Coverage on Liberty’s Army
Contact Your U.S. Representative
In a time of universal deceit telling the truth is a revolutionary act. George Orwell
![Glenn Beck - States Test the 10th Amendment [1 of 2] - May 7, 2009](http://i.ytimg.com/vi/W_Lv0Nfvkvo/default.jpg)