Real Costs of Health Care
Monday, July 20th, 2009Barack Obama and his accomplices have made the health care industry their latest target. Obama is taking the message of medical bureaucracy around the country, and recently appeared on ABC to promote his plan to administer health care for the masses. Obama’s main selling point on this issue seems to be “rising costs”, or “lowering the cost of health care”. But what are the “costs” of health care? Obama does not know. No one does.
Debating the costs of health care is pointless unless the concept of “costs” is clearly understood. In his plan to lower health care costs, Obama points to health care premiums, administrative costs, and the prices charged for medical products and services as costs to be reduced. His “plan” also brings up the issue of losses caused by inefficiencies and poor quality care. These elements certainly qualify as costs, but the costs of health care are much more expansive.
Cost must be distinguished from price, especially in the context of a proposal to try to reduce costs through the brute force of government. Cost, simply put, is everything that must be given up in order to produce any given good or service. The “cost” of health care goods and services, therefore, are much larger than simply the prices paid for insurance premiums, hospital stays, or even the losses due to inefficiencies.
Vast costs must be incurred in order to provide a single iota of health care, especially under the current regime of government controls and mandates. Those costs are incurred by millions of people around the world who have no idea that they are working to provide health care to anyone. Foregone opportunities by medical and nursing students, professors, college administrators, and hospital and medical office employees are obvious unseen costs, but the true costs can never be known, much less controlled by any one person or group of people.
Think of the millions of people it takes to build, staff, and supply a single hospital. The cost of the physical building itself can never even be estimated. There are indescribably complex industries providing tools (and the materials to make the tools), concrete, steel, tile, roofing materials, wiring, plumbing, and thousands of other necessary physical goods. The same can be said of the process of supplying the medicines and medical equipment within the hospital, and these costs only apply only to the physical materials. Hundreds of people must also voluntarily make the personal sacrifices necessary to staff the hospital.
Under the current paradigm, there are also massive costs associated with building code restrictions, zoning laws, and myriad state and federal laws and regulations. The time and effort expended in complying with government dictates and obtaining government approval are further costs of health care. Once the true nature of costs is brought to bear, it is readily apparent that forcefully lowering the costs of health care is chimerical at best. How will Obama, or anyone (or any group of people), reduce these costs? Whence come the powers that give any person or group the ability to reduce the unknowable costs of providing medical goods and services?
Applying the correct definition of “costs” reveals the danger of forceful interference in any sphere of economic activity. What impels many millions of people to cooperate in the unfathomable undertaking of providing a single hospital or doctor’s office? They simply seek a reward for their efforts. Obama’s plan to lower health care costs will in reality only lower their inducement to incur those costs, and will make alternative uses of time and resources more attractive.
