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Tuesday, November 17, 2009

Why the Pelosi Plan Will Kill People... for Dummies

I did a "physician slavery" bill roundup last week, but so many good articles have appeared, I figured I had to do another along with offering my simple synopsis of the economic issue underlying the Pelosi Bill.

This post at Voice of Reason caught my attention as it shows how the current bill will impose a massive new tax on medical device makers thus strangling productivity and innovation in this crucial, life saving industry.

Beth Haynes has been blogging tirelessly on the slavery bill. She offers four more excellent posts including a lecture by Dr. Jane Orient on how to reduce costs through freedom in the marketplace, the political push towards single payer, the bill's draconian penalties including fines and imprisonment, and the expansion of immoral medicine.

Many have pointed out that when health care costs are socialized, each person's health becomes everyone else's business. This provides justification for the nanny state to begin regulating people's personal activities and health habits. (Recall the mandatory daily exercise required in Orwell's 1984.) This is not just a theory in the U.K.. The Times reports:

Health and safety inspectors are to be given unprecedented access to family homes to ensure that parents are protecting their children from household accidents.

The synopsis below follows Dr. Paul Hsieh's excellent op-ed recently published in the Washington Examiner in which he likens the Pelosi plan (which is a national version of the Massachusetts's system of mandatory insurance) to a Mafia shake down. (Also, see his excellent website at FIRM.)

Socialized Medicine for Dummies:

1. Special interests line up to include their "pet benefits" on the "government menu" of required coverages.

2. Rather than economizing, by say, buying a low cost catastrophic plan (in the same way one buys auto insurance), everyone must buy the government plan that covers everything and everyone.

3. This insurance is expensive so the state must increase taxes to pay for subsidies to low income individuals, and begins cutting payments to doctors and hospitals.

4. Doctors and hospitals lose money on every patient so they begin cutting back on taking new patients

5. Less supply and more demand creates a cost death spiral as services are cut, prices continually rise, and waiting times increase.

6. Everyone is "covered" but no one gets actual care in the same way that everyone in a communist society is technically "employed" by the state but there is nothing to buy.

7. Repeat ad infinitum

The above steps are essentially what is happening under the present system as the tax code provides incentives for employers to provide health benefits and each state mandates certain coverages leading to the cascading effects described above. Rather than reforming this flawed approach by removing market distorting incentives and mandates, the new plan will exacerbate the existing problem on a massive scale by mandating even more coverages, capping prices, forcing participation under penalty of imprisonment, etc. etc.

We still have time to stop it.

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