Archive for health care

Per Bylund on Obamacare in the ‘Wall Street Journal’

800px-Barack_Obama_reacts_to_the_passing_of_Healthcare_billPer Bylund’s column “What Sweden Can Teach Us About ObamaCare” is in today’s WSJ:

President Obama has declared the Affordable Care Act a success—a reform that is “here to stay.” The question remains, however: What should we expect to come out of it, and do we want the effects to stay? If the experiences of Sweden and other countries with universal health care are any indication, patients will soon start to see very long wait times and difficulty getting access to care.

Sweden is praised as a rare example of a socialist country that works. A closer look at its health-care system tells a different story.

The overall quality of medical services delivered by Sweden’s universal public health care consistently ranks among the world’s very best. That quality can be achieved by regulating treatments to follow specific diagnoses as well as by standardizing procedures. If ObamaCare regulations do this, the quality of American health care may not go down either.

Sweden’s problem is access to care. According to the Euro Health Consumer Index 2013, Swedish patients suffer from inordinately long wait times to get an appointment with a doctor, specialist treatment or even emergency care. Wait times are Europe’s longest, and Swedes dependent on the public-health system have to wait months or even years for certain procedures, or are denied treatment.

For example, Sweden’s National Board of Health and Welfare reports that as of 2013, the average wait time (from referral to start of treatment) for “intermediary and high risk” prostate cancer is 220 days. In the case of lung cancer, the wait between an appointment with a specialist and a treatment decision is 37 days.

This waiting is what economists call rationing—the delay or even failure to provide care due to government budgetary decisions. So the number of people seeking care far outweighs the capabilities of providers, translating into insurance in name but not in practice. This is likely to be a result of ObamaCare as well.

Rationing is an obvious effect of economic planning in place of free-market competition. Free markets allow companies and entrepreneurs to respond to demand by offering people what they want and need at a better price. Effective and affordable health care comes from decentralized innovation and risk-taking as well as freedom in pricing and product development. The Affordable Care Act does the opposite by centralizing health care, minimizing or prohibiting differentiation in pricing and offerings, and mandating consumers to purchase insurance. It effectively overrides the market and the signals it sends about supply and demand.

Continue reading at WSJ.

See also, Bylund’s Mises Daily articles on health care and Sweden’s economic system:

The Market is Taking Over Sweden’s Health Care

How Government Cutbacks Ended Sweden’s Great Depression

Video: Mark Thornton Dicusses the Collapse of America’s Health Care Industry

Mark Thornton explains why Obamacare is simply one more step along the road to health care serfdom.

Bylund on Resistance Radio

I’ll be on Resistance Radio 98.9FM WGUF at around 12:15 EST discussing Obamacare and Sweden’s health care. My take on the former is that it is much like the latter used to be, but that as America is going for public health care Sweden is going for markets.

Obamacare Delay: Good Politics, Bad Economics

Ace of heartsD.W. MacKenzie writes in today’s Mises Daily:

The Obama administration has in the same week admitted that the burdens that the ACA places on small businesses are onerous. The costs of the ACA will therefore cause smaller employers to demand fewer workers.

Economically speaking, there is not a real difference between workers supplying fewer hours of labor and employers demanding fewer hours of labor. In terms of the production of real wealth fewer hours of labor used in industry translates into reduced overall production. Politically, however, there is a very real difference between workers wishing to supply more hours, and employers demanding more hours.

Dumb Consumers Make Infallible Voters

In a recent Mises Daily article, Julian Adorney noted that a central tenet of the gospel of social democracy is that the majority of the people are too stupid to buy or consume the “correct” products and services without government diktat, but that when it comes to voting, the opinions of the majority are infallible and never to be questioned.

Here, we see a woman who claims a mandate to rule based on the opinions of the same people she declares too stupid to see to their own healthcare:

Video: “How Do We Stop Rising Healthcare Costs?”

Peter Klein articulates several reasons why our current “Healthcare System” is so expensive, and explains how only the free market, with transparent pricing and competition, can halt the escalating costs.

Obamacare: Repeal is not Impossible

NewDealNRAby Dominick Armentano

[, February 12, 2014]

Obamacare was sold to the American people as a humanitarian attempt to provide health insurance to the poor and to individuals with a pre-existing medical condition who had been denied coverage. If you were not poor, did not have a pre-existing condition, and already had health insurance and were satisfied with its coverage and rates, you were repeatedly assured that you could keep your plan and doctors. Right.

We now know that the selling of Obamacare was a giant con job. After all, if its proponents had really been sincere, they would have argued that the alleged poor simply be provided vouchers (similar to food stamps) to help purchase insurance; further, a simple one-sentence piece of legislation could have required that insurance companies not automatically exclude potential customers based on some pre-existing medical condition. Done deal. Instead, what we all got smacked with was a 906 page regulatory and tax monstrosity that amounts to a federal makeover and takeover of the entire health care industry.

Can we repeal Obamacare? Defenders of the law, and even some moderate critics from both political parties, assert that repeal is impossible at this point. After all, Obamacare was passed by both houses of Congress, signed by the President, and parts of the law were declared constitutional by the Supreme Court. Moreover, billions of federal tax dollars have already been spent on the bungled website and countless bureaucrats (including those in the IRS) to administer the new regulations and taxes. Thus, defenders assert, there is simply no precedent for repealing a federal law that’s this important and complex.

Nonsense to that. There is in fact major precedent for repealing important and complex federal law that destroys personal freedom and raises costs and prices to consumers: The Supreme Court’s de facto “repeal” of the National Industrial Recovery Act (NRA) in 1935.

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Another Way to Reduce Access to Health Care

Outlaw emergency rooms that aren’t owned by politically well-connected hospitals.

Politicians in Colorado have introduced a bill 

which would force the closure of already existing freestanding emergency rooms unless they are owned by a hospital. SB 016 provides an exemption for emergency rooms more than 25 miles from a licensed hospital…. the practical effect of the bill would be to give hospitals monopoly control of all emergency facilities.

Freestanding emergency rooms — some owned by hospitals and some not — already serve patients in metro Denver. They locate in areas that are underserved by the emergency rooms attached to hospitals. Different from urgent care centers, they charge more because they can do more. They typically have board-certified physicians on duty 24 hours a day, every day, and are equipped to diagnose and stabilize cardiac arrest, stroke symptoms and trauma.

Like other special interest groups, Colorado’s existing hospitals have developed a loyal group of state legislators who are willing to vote for them without regard for the harm that protecting hospital cashflows inflicts on ordinary citizens in need of health care.

Mark Thornton wrote last fall about some other ways that the state restricsts access to health care:

The mainstream perspective is that experts and technocrats should establish what the best medical practices are and then bureaucrats should enforce those practices on everyone. Practices deemed suboptimal, unproven, or potentially dangerous should be prohibited by politicians and the prohibition enforced by bureaucrats. This is a one-size-fits-all system with the state determining what fits and what does not.

Never shy about intervention, the government has provided monopoly privileges for doctors through licensing, for drug companies through patents and trade restrictions, and for hospitals, who can prevent competitors from entering their market through “certificate of need” requirements. The combination of monopoly suppliers and subsidized consumers is the primary reason for this era of rising medical costs and falling health care outcomes.

The Market is Taking Over Sweden’s Health Care

recession impact on young man and society in swedenPer Bylund writes in today’s Mises Daily:

In other words, we should expect to see markets wherever governments fail. Or, to put it more accurately, markets exist where government cannot sufficiently repress or otherwise crowd out voluntary exchange.

So it should be no surprise that, as The Local reports, Swedes en masse get private health care insurance on the side of the failing welfare systems. This is indirectly a result of the relatively vast liberalization of the Swedish economy over the course of the past 20 years (as I have noted hereand here), which has resulted in the “experimental” privatization of several hospitals (even one emergency hospital is privately owned). While previously only the political elite (primarily, members of the Riksdag, the Swedish parliament) had access to private health care through insurance, the country now sees a blossoming and healthy insurance market.

Healthcare: High Prices and Few Kidneys

8116080125_65eba38273_zStart with a simple proposition: America does not have a healthcare problem. The services provided are the best on this planet, and people from around the world travel to its hospitals and clinics to seek treatment. If they can afford it, that is.

If there is a problem it is not on the service side but rather with the costs. So, what is the main driver of these increasing costs?

Bad government policies force costs out of line with what they should be, creating a disconnect between supplies and demands. In few areas is this more apparent than in the case of organ sales.

It is illegal to sell your organs in the United States and most other countries around the world. In 2012 there were 95,000 men, women and children on a waiting list for kidneys but only 16,500 kidney operations performed. This translates to an implied waiting time of 4.5 years to get the simple organ.

Nor is this an improvement over recent history. Just a decade ago the average wait time was 2.9 years. With all the recent attention afforded to healthcare and the piles of money driven into it, this situation has worsened and those in need are worse off than they have ever been.

When supply is curtailed, as it is in the case of laws prohibiting organ sales, a black market develops to provide the good or a shortage occurs. Unfortunately, organ donation is not so straight forward and few are willing to trust a black market surgeon to perform the operation. This is unfortunate as our bodies come with a backup for most of our major organs just in case something goes wrong – a spare kidney, a portion of our liver, a lung or even an eyeball could all be given (or sold) to someone in need and we could still live a long and healthy life, except the law prohibits it. With no black market available to clear the market, those in need live in pain or die earlier than would otherwise be the case.

Besides the pity of the pain and suffering, this situation is a shame because it is just not very cost effective. The black markets that do exist around the world suggest that organs are not very expensive. At least, not relative to the cost of healthcare and support to people in need of them currently in the United States.

According to the World Health Organization, a kidney fetches around $20,000 in India, $40,000 in China and about $160,000 in Israel. In 2009 an American man offered one of his own on Craigslist for $100,000 and received several offers until the website removed his post.

These prices might seem high, but consider the alternative. The annual cost of dialysis is about $80,000. Multiply this by the average 4.5 year waiting period for a new kidney and you’re looking at $360,000. Tack on something for your pain and suffering, and you can see that the current situation is not very cost effective.

Exchanges are currently being pushed that try to match donors with those in need without a cash payment. This is a step in the right direction, albeit a very small one. The great thing about having a market price is that it simplifies the choice process immensely. Buyers can easily determine their opportunity cost to see if they would like to partake in a certain action, sellers can judge if it is worth their time to supply something, and best of all, supply meets demand – no shortages or surpluses! Though exchanges have grown in use in the United States since 2005 they still account for only 3% of all kidney donations. This isn’t surprising – using an exchange is like bartering for something, and as economists Gary Becker and Julio Elias note, “barter is always an inefficient way to arrange transactions.”

In fact, Becker and Elias think that the price of a kidney need not be as high as one might think to clear the market, provided there is a legal market to do it within. About $15,000, give or take $10,000 should just about do it. In Iran, the only country in the world where one can legally buy or sell a kidney, the price is around $4,000 and wait times are largely nonexistent. Singapore and Australia have recently relaxed regulations on organ sales to get closer to these results which are completely normal in other markets – no waiting and low costs – but seem remarkable to the uninformed in the organ market.

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