Tuesday, June 1, 2010

Justice Dept Imposes Price Controls on Doctors

The May 31, 2010 Christian Science Monitor has published an editorial by S.M. Oliva on the federal government's latest intrusion into American medical practice -- namely price controls on physicians in Idaho.

Here's an excerpt from "Justice Department Declares War on Doctors":
Today the Antitrust Division, joined by Idaho Attorney General Lawrence Wasden, forced a a group of Boise orthopedists to accept price controls for worker's compensation and HMO contracts as part of a settlement accusing the doctors of "price fixing".

...[T]he Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal "price fixing."

The FTC has hinted at this when it said physicians must accept Medicare-based reimbursement schedules from insurance companies. But the DOJ has gone the final step and said, "Government prices are market prices," in the form of the Idaho Industrial Commission's fee schedule. The IIC administers the state’s worker compensation system and is composed of three commissioners appointed by the governor. This isn't a quasi-private or semi-private entity. It's a purely government operation.
(Read the full text of "Justice Department Declares War on Doctors".)

The DOJ's declaration that "government prices are market prices" is positively Orwellian.

When the government sets prices and refuses to allow competition, there is no market -- merely a fiat economy. (The current system of medical licensure which artificially limits supply of physicians is another violation of free market principles.)

As in any other sector of the economy, such price controls will merely lead to shortages, which in turn will result in rationing. The Idaho case is another warning to Americans.

(Via @AriArmstrong.)