Real Costs of Health Care
Barack 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.
Tags: Healthcare, Knowledge Problem
July 21st, 2009 at 7:03 am
I think there is a misconception that people without employer provided insurance or who are low income and can’t afford insurance cant get health care. There is a big difference between being insured and being cared for. The ininsured are told to just go to the emergency room, they can’t be turned away. I mean, what better place to get care than at the hospital, right? Those people may or may not get billed for the services rendered depending upon their income/citiznship status.
I know someone who works for a small business and pays through the roof (over a grand a month) for health insurance for he and his family, because the company doesn’t provide the insurance. Being someone who can “afford” insurance, if he had not covered himself, he would’ve had to pay out of pocket the full price of his child’s birth which is roughly $16K. While his sister-in-law, who is uninsured and is at a minimum wage job was able to have her baby basically free of charge. Who picks up the cost of those who get care and don’t have insurance or money to pay for it?!! I guess it’s those people who are deemed that they can “afford” it. What message does this send to the American populace?
And what about the cost to businesses to have their employees covered. Under the new legislation there will be fines for not covering your employees, but those fines are way less than what it would actually cost to insure their employees. If I were an employer, it seems the message being sent to me is - ya I’m getting punished for it, but it still costs less to not cover them. How does this help the economy to add extra costs to businesses, costs that contribute nothing to anyone, you might as well say its a tax - a tax that keeps us from getting ahead. This cannot be good for the small business, especially. Anyone have more feedback/details on this?
October 15th, 2009 at 2:10 pm
I read a few topics. I respect your work and added blog to favorites.
October 18th, 2009 at 4:30 am
Thank you very much for that excellent article
October 18th, 2009 at 10:16 am
Thank you! You often write very interesting articles. You improved my mood.
October 20th, 2009 at 11:26 am
Valuable thoughts and advices. I read your topic with great interest.
October 23rd, 2009 at 6:31 pm
Interesting and informative. But will you write about this one more?
October 24th, 2009 at 3:16 am
Fiona, it is a great post thanks for writing it!
October 29th, 2009 at 10:15 pm
CNN ran a story about this a couple of days ago.
October 30th, 2009 at 9:16 pm
Hello. I expect the article is really interesting. I am disinterested interested in reading more. How speedily purposefulness you update your blog?
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October 31st, 2009 at 10:14 am
It continues to peak my interest.
November 1st, 2009 at 4:35 pm
Oh, I’ve done the research. I’ve updated the post to include a hyperlink to the Wisconsin Law Review article I wrote on the subject.
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