Saturday, July 18, 2009

Are Health Care Costs the Problem or Not?

We are told that the costs of health care are rising so fast that they are overwhelming our personal finances and national economy. Certainly, they are rising and becoming a larger part of our budgets. We all know that.

The Obama administration and the liberals in government are telling us that government must insert itself into our system in order to create more competition and thus, via market pressures, force down costs. Their object is ostensibly to save money.

Any of us who have watched how our government function for any period of time will immediately reject the idea that the government is inherently efficient and effective. The idea that government intervention in a market will cause costs to drop is laughable. Please note the recent example of the government injecting massive amounts of capital into the real estate market over a decade or so and then wondering why it over heated and crashed.

Look at the existing government run health care systems. Are they models of efficiency and effectiveness? The question is not whether they provide some level of service. The question is whether or not they are a model after which to fashion the rest of our health care sector.

In the face of history pointing us in the opposite direction and, now, numerous partisan and non-partisan organizations, including the Congressional Budget Office, agreeing that the plans currently flowing through our legislature will cost $trillions, not SAVE it, our President urges Congress not to squander this chance to reform health care.

So, we're left to try to discern the motives of our elected leaders. Why do they insist on passing a law that will surely increase the cost of health care when that is in direct opposition to the expressed objective of decreasing cost?

My only conclusion is that they favor more government at the costs of a better(cheaper) health care system and at the cost of growth in the wider economy.

P.S. - Obviously, health care is expensive. We modern humans are trying to rid ourselves of the kind or scourges that have killed millions throughout history. Such an effort will be expensive. However, we should not kid ourselves that such an effort would not reach a point of diminishing returns. So, we must strike a balance somehow between what we want and what we're willing or able to afford. The market is actually doing that for us. We need to shorten the linkage between the health care consumer and provider to facilitate normal market adjustments rather than insulate the consumer from the provider and vice-versa.

1 comment:

  1. Another thing to consider with the majority of health care costs is that it might be similar to their argument for the stimulus; that is, government intervention is necessary because a lack thereof has produced the current situation. Anyone that has been paying attention to the economy understands that this is just utterly false. I wonder what other government considerations are driving up health care costs that aren't getting any press?