Tuesday, July 8, 2008

A Glimpse of the Future

The July 7, 2008 Wall Street Journal makes some interesting observations about the current political battle over Medicare:
As a virtual monopoly, Medicare uses a complex formula to set reimbursement rates for thousands of services. In short, it controls prices. That's why doctors are supposed to eat a pay cut, even though everyone knows this would prompt more doctors to stop seeing Medicare patients. But price fixing is the way that an open-ended entitlement like Medicare – which gobbled up $432 billion in 2007 – tries to control spending...

Yet Mr. Obama wants to... create a Medicare-like "public option" for everyone of any age. Democrats will fund this program generously, crowding out private coverage and maintaining the slow-roll toward a complete government takeover...

The fight over doctor fees is merely an appetizer for such a system, where competing interest groups would clash for their share of the spending pie. Highly politicized Medicare-like price controls on providers and services would spread to every health decision. The result would be rationing and declines in quality of care.
When single-payer advocates point to the supposed glories of the system in other countries, it's important to let them know that we already have an example of a broken government-run system in our own country.

The problems of Medicare are a glimpse of our future if we adopt any sort of Medicare-for-all solution. When the government stops patients and providers from contracting freely for goods and services to their mutual benefit in a free market, these bad results are inevitable.