Friday, February 26, 2010

Free healthcare.

Universal Healthcare Bill.
Healthcare for everyone. Sounds pretty good. How can anyone vote against it? It reminds me of the "clean air bill" or "clean water bill" or something like that. Anyone who doesn't support the clean air bill can be vilified to look like they DON'T WANT CLEAN AIR. It is a silly assumption, since the clean air bill, like most of these great sounding bills, like the "healthcare for everyone" bill is a new taxation vehicle.

Politicians only have 1 job: get re-elected. To get re-elected, they have two possible messages.

Message 1: "The Government will take care of you cradle to grave"

or

Message 2: "The Government will allow you to succeed and keep what you make."

You cannot really offer both. Legislation that is percolating right now is worded in such a way as to penalize all of those evil millionaire business owners with over 50 employees, by requiring them to offer a federally approved health insurance plan, or tax them so much that the new frozen yogurt machine for the break room will never get here.

In case no one bothered checking, most employees are in companies of 100 or fewer employees. Hurting small business hurts America. Same holds true for large businesses. These taxes and regulations all keep us "working class" from having the things we really want... frozen yogurt machines. or raises, or retirement plan matches, or profit sharing, or whatever the boss wants to give us.

The only thing that has ever helped any of us really succeed has been competition. With multiple grocery stores, I can get my milk, eggs, and bread at an honest price.
With multiple restaurants, I can get a burrito for $1 at the taco joint, a $19.00 prime rib at the high-end steak house, or all-I-can-eat pizza at the pizza buffet for $6. If you listen to the cheerleaders for socialized health care, the new system they are proposing will give us the equivalent of a $0.99 all-you-can-eat prime rib buffet.

If I opened a tax-subsidized restaurant, I could open a restaurant like that, where everyone eats for free (or $0.99), and everyone would come see me and put every other restaurant out of business. (note the theme here - government subsidy is bad for business)

If, after a period of time, this fantasy restaurant had to be self sustaining, it would have to either evolve to a $0.99 factory-second, irregular hot dog buffet, [byob] where you bring your own buns, or it would turn the other route, where you get one decent steak for $10. Either of those business models could be profitable, and you might eat the irregular wieners during the week, and steak on payday if both of these restaurants were near your home or office.

Insurance and government subsidies make EVERYTHING higher. Take your wrecked car to the body shop, and tell him insurance is paying for it. Your estimate have a number on it close to what the insurance company is willing to pay. Then tell him to get it looking "decent" as "cheap as possible" since you are paying for it out of pocket. That estimate will usually be a little (or even a lot) cheaper. That estimator will also know that there are a dozen more body shops who will bid on the job. That's called competition.

The same rules apply to health care. If the government is supporting Dr. Jones medical practice, where anyone can get all of the procedures they want as long as they have a free Platinum Obamacard, then Dr. Smith across the street won't get much business, if he doesn't participate in that plan. Eventually, all doctors will end up taking government funded health care, like they do now with Medicaid/medicare, and they will all basically offer the same mediocre level of care, only succeeding if they can cut costs or defraud the system. If we expand programs that we have, then what we have will only get worse. Doctors offices and Hospitals will charge the maximum amount that the insurance and medicare will pay. Actually they charge more, then discount it for them. The jacked up "undiscounted" price is what they write off if nobody pays.

Has anyone looked at the reality of other government funded universal health care? Mexico has it. Why are illegal aliens visiting OUR hospitals? I don't know any Americans who sneak across the border to visit Mexican hospitals. With total price caps, the only way to improve profits is to lower quality.

If every qualifying citizen on Medicaire (or private insurance) got an annual rebate check for the 10 cents of every dollar that was spent under $10000 on them, then there would be second thoughts about going to the doctor, the hospital, etc. There would also be a forced price war among health care providers. Currently most people don't care how much a $500 lab costs. If they can shop it around and take their blood sample to the $100 lab, its worth an extra $40 at the end of the year on their bonus. This will also generate competition between insurance companies. Maybe one will offer $0.15/dollar savings, or maybe one will raise the limit to $15000.

Its only a gimick, but it would encourage people to pay attention to what things cost, and when it matters to the customer, it will matter to the provider.
If we leave it up to the government to fix this problem, we will all end up with hotdogs for lunch every day, when all anyone really wanted was a side salad, or a chance to have an occasional cheeseburger.

Another case in point: My kid's schools serve a tray lunch for $2.00. They also offer snack bar service where they sell food a la cart. Last year, I put as much money in the kid's accounts as they used. Then, the school offered me the opportunity to see on the web page that my teenage daughter was drinking 2 or 3 $1/pint milks with her lunch, that often ran $4 to $7 total. Since it didn't matter to her, she just ate and spent, and bought her friends ice creams.
This year, I started giving them $10 every Monday. If they take their lunch every day, they can put $10/week in the bank. If they run out of money at the snack bar on Monday, they have to take their lunch tuesday to Friday. Yes, I know I am paying for the sack lunches and the $10/wk, but I am spending less that when they have no incentive, and my kids are not chomping on as many $1.50 rice crispy treats from the snack bar. If the insurance companies and the medicare offered a 10% rebate on unused benefits, a lot of us would be shopping around for our health care needs.