Monday, November 10, 2008

ObamaCare Will Fail, Because It Is Supposed to Fail

First, an aside:

Health care costs have skyrocketed over the last several years because

  1. We have separated the doctor from the patient, inserting the insurance company between them
  2. Government spending on health care has injected large amounts of taxpayer money into the system
  3. Medical malpractice lawsuits have forced all doctors to obtain medical malpractice insurance, practice defensive medicine, and fail to delegate medical decisions to less-trained personnel
Why is medical insurance necessary? To amortize the medical expenses. Yet amortizing those expenses is necessary in part because of medical insurance: it costs only a few dollars in materials and 10 minutes of labor to set a broken bone. Yet because the doctor cannot risk doing it incorrectly, the patient (or his insurance company) may have to pay hundreds of dollars.

Back to ObamaCare.

Obama plans to create or expand government health insurance, covering everyone who doesn't have insurance now. While he says that if you like your current plan, you can keep it, what he doesn't say is that a factor in keeping costs low for those existing plans is the presence of uninsured people. Insurance companies have to compete for business both with other companies and with the zero-cost plan: not having insurance at all.

Insuring the uninsured will raise the rates for the insured.

Obama says he will prevent insurance companies from overcharging for malpractice insurance. That means, of course that some doctors will not be insured at all, or that dangerous doctors will get cheaper insurance than they otherwise could afford. In essence, the plan is to subsidize bad doctors.

All of this will have the effect of raising medical costs. When that happens, wait for the sirens to blare for the government either to nationalize the medical insurance industry, to siphon off its customers, or to finally step in and employ the doctors directly.

What am I saying? That would be socialism.

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