[ExI] Health system, again

[Lee Corbin]

Kevin wrote

> Personally I think that the concept of health insurance is
> what has caused the skyrocketing costs in the first place.
> People no longer saw nor cared what they were being
> charged because someone else was paying the bill so
> the market forces controlling costs were removed.
> It's the cost of BS we all pay. 

YES!  And do you know how in the United States all
that BS came about?  

In World War II the U.S. government in its wisdom
decided that it could do better than the free market
in distributing various good, e.g. gasoline. So instead
of (via tax monies) simply bidding up the price of
gas so as to keep the troops sufficiently provisioned,
an idiotic rationing system was employed, which was
not nearly so efficient.

At the same time, the government passed laws decreeing
certain wage and price controls.  (The last time our
ingenious government tried that was the 1973 "oil
embargo" event, so miscalled by people who fail
to realize that the higher prices necessitated by the
times would have rationed the gas infinitely better
than the "gas lines" and shortages that inevitably
occurred.

Naturally, such meddling in the market has unforeseen
consequences. Companies (especially those working in
the war-related industries) still had to reward success
and reward those employees who contributed the most.
But thanks to the new government regulations, they
couldn't simply be *paid* more.  So loopholes were
created---for example, the company could provide
"company funded insurance". These loopholes did
provide a sneaky way to attract and reward employees,
but at the sacrifice of some market inefficiency.

Far worse were the long term consequences. From then
on, medical "insurance" (which soon took on very un-
insurance type attributes) and other fringe benefits were
abetted by the government, which didn't tax those benefits.
And that's how it all started.

Then, seeing the spiraling medical costs (as the final consumers,
the end users, were separated from those who actually paid,
that is the insurance companies), and seeing what damage had
been done, do you suppose that a rollback of the extremely
damaging government regulations was considered?  NOT 
FOR A MOMENT!  It was indeed thought that the answer
was *more regulation*, more artificial ways to disengage
the end users of services from those who paid for them.

So the HMOs were invented. And each such step since has
resulted in a bigger mess, and more and more outrageous
and ridiculous medical prices and charges.

> For example - four years ago I took my 9 yr old daughter to
> the ER at 3 am because she had a nosebleed that started at
> 9pm and hadn't stopped. We waited 3 hours, then saw
> a Dr for 10 minutes who crammed what looked like a small
> tampon up her nose and sent her home. My cost was $75 for
> the ER visit. When I later looked up the detailed billing out
> of curiosity, I saw that the Dr charge was $440 for the
> 15 minutes and the "tampon" cost $1200! Plus there was
> another $300 worth of supplies and such.

That is predictably what will happen without the discipline
of the market place.  How could the American government
as late as 1971 (!) have believed in price controls?  How
in the world as late as 2008 can people still reflexively 
reject market mechanisms and price signals?

> I called and asked the hospital about this obvious error
> and they said that yes, the bill was correct, the "medical
> device" they put in her nose was "medicated". I was
> supposed to return in 3 days to have it removed which
> would have been a $25 co-pay office visit ($120 in
> insurance), but just to spite the system, I pulled the
> thing out myself with no trouble at all and the bleeding
> was obviously gone.

If you told them later what you had done, they would have
been speechless with astonishment.  Why, they would
wonder, had you tried doing that?  After all, they would
have done it *for free*!

> I have no idea why nobody wants to address this issue.
> If Drs are in such short supply, maybe allowing more
> into medical school

It's enough to make me gag.  *Allowing* more into whatever.
And this in a supposedly free country.

> or  allowing  practicing nurses to  do more would be in
> order and help to drive some of these costs down.

Why?  To whose benefit (beside the remote tax payer, of
course) would such accrue?

> I think that the free market isn't working because the
> market is not free.

Exactly right.

Lee