It just never stops, and Donald Trump is BSing on CNBC this morning with the same garbage.
A panel at the American Enterprise Institute featured Richard Foster, the Medicare actuary who estimates that ObamaCare's $716 billion in Medicare cuts will cause one of six hospitals to become unprofitable. In the audience was Chip Kahn, the president of a for-profit hospital trade group that lobbied for ObamaCare, who stood up to defend the bargain his industry cut in return for 30 million new subsidized customers.
Mr. Foster noted that the cuts, which come via a technical change to Medicare payment rates, apply in perpetuity. But the hospitals only get the extra patients once, so the wedge between costs and benefits for hospitals widens over time.
Right. The problem is that the guy in question, like politicians, won't be in office at the time it blows. Or so they think. Unfortunately the wall is much closer than most people believe.
Mathematically, we have ~20 years or so. From a market perspective we have three to five years, tops, which means the next President -- and the current Congress -- is it.
Today, Medicare's arbitrary fee-for-service price controls pay the best hospitals and the worst hospitals equally, regardless of quality or value. Innovators who deliver better care at a lower cost are rarely rewarded, as they would be in any other industry. Under premium support, networks of providers would be competing for consumers and become more efficient over time, instead of billing taxpayers for their current negative rate of productivity.
This is the rubric we keep hearing.
Unfortunately, it's false, and the evidence is found in the private sector which has "premium support" and has had it since the 1980s.
It has been an abject disaster because the problem does not lie in the how the end customer of health care pays for it. It lies in the legal framework that has been crafted by legislators to give special dispensations to health providers of all sorts, from device and drug manufacturers to hospitals, that distort the market and allow them to force cost-shifting on their customer base.
Nobody would ever willingly pay $100,000 for a car that their next door neighbor bought for $20,000. Such a model in car sales would simply never work; you'd erect the middle finger at the car dealer if he attempted it, and go to the next dealer.
But this is precisely what happens today with medical care. It is enforced by government laws that make legal practices that are blatant violations of the law in virtually every other line of business. The extraction of money to pay for care delivered to those who either cannot or choose not to dedicate their own resources toward the provision of their care is enforced by State and Federal laws that effectively grant monopoly protections to care providers of all sorts, from drug companies to hospitals to operators of medical technology, such as MRI owners.
Nothing that Ryan or Obama have put forward addresses these issues. Neither of the major political parties nor the Libertarians will go anywhere near this issue and address it, yet it is the root of the issue when it comes to medical care and its rapidly-escalating cost.
The ability of a person with no resources, whether through bad luck or their own intentional actions, to show up in a hospital and demand "the best care" irrespective of the ability to pay, means that someone must be forced to cover their treatment. That someone is you. There is no free market for medical care and never can be so long as that person can show up in the hospital and demand $250,000 worth of heart bypass operation without the ability to pay for it, as someone must foot the bill.
The anti-competitive laws do not just extend to the United States -- if anything, they're more of a problem overseas. Many nations threaten drug companies that unless they are allowed to buy drugs for the cost of reproduction they will break patents and make the drugs themselves. The drug companies knuckle under to this and as a consequence in the United States we pay prices three, four, five, ten or even one hundred times what the same drug sells for in another nation, and yet our laws prohibit the re-importation of those drugs. We thus effectively pay for the development of every advanced drug and device therapy used throughout the world, and the pharmaceutical industry uses the boot of the government to force you to do so.
There are only two options: Either we must end the ability of firms and people to cost-shift via the jackboot of government force or we must ration medical care and pay for it as a budgetary line item, removing it from the personal balance sheet entirely and transferring it to the tax system. The latter means that the rich man gets the same care as the poor man but both are subject to the ballot box's referendum on how much is spent. The former means that those who are unfortunate or choose not to put back their own resources toward medical care must rely on charity or do without.
This is the choice before America. It is the choice that nobody wants to make, and yet our refusal to have this debate and resolve it means that we are rushing headlong toward a government fiscal collapse and economic destruction. Unemployment and refusal to hire is being driven in large part by the forced costs shoved on employers through the current medical system coupled with Obamacare, which attempts to prevent anyone, employer or individual, from "opting out" of the government-imposed medical scam.
Ryan's budget plans do exactly nothing to address the root cause of the problem on purpose. Ryan, like Obama and unfortunately even like Governor Johnson, have intentionally and maliciously refused to bring to the debate the cause of our impending fiscal disaster, instead choosing to protect through obfuscation the industry that earns nearly four trillion dollars annually with some half of what it extracts from the economy -- or double the federal budget deficit -- coming from its monopoly protections.
