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Wednesday, July 22, 2009

What Exactly is Obama's Healthcare Reform Proposal?

By E-Mail, someone wrote:

A good post to do would be covering all the tactics being used to pass single-payer. Obviously, like you said, state restriction of the market is the general cause of expensiveness in the US, but michael moore and government agencies are using another layer of propoganda trying to show how other countries governments run it better.

I've been bothered by the lack of coverage of health-care on the internet lately. For once, no one seems to be addressing the msm claims that other countries do it better or cheaper (besides the occasional horror story of limited treatment or waiting lines, but these are matched at least as equally by horror stories from the US system, so I don't give them much weight for comparisons). I know a lot of their analysis (like the WHO ranking) are bogues or lies, but not as much as usual.

It may require a lot of research, but I haven't been able to find the answers, and maybe others readers are just as curious as me.

Right now, the mainstream media propaganda engine is focused on "Confirm a new Supreme Court judge!" or "Pass the new carbon tax law!" The focus isn't currently on health care "reform", but it should go there again soon.

The usual "Problem! Reaction! Solution!" paradigm is the one being used to pass healthcare reform. A problem is caused by previous State restriction of the market. For healthcare, this is restrictive State licensing requirements for doctors, which restrict the supply and drive up prices. Then, the mainstream media overreacts. The solution is to give the State more power, exacerbating the problem. The operations of this fnord cycle are very obvious to me now.

Obama's healthcare proposal is not "single-payer" or "universal". Under "universal healthcare", all medical costs are paid by the State. All doctors are direct State employees. It is illegal to purchase health care directly from a doctor. The costs of universal health care are paid via taxes/theft.

Universal healthcare is obviously stupid. It's pretty pure communism. There are lines you have to wait in, before getting health care. Insiders still find a way to jump the line.

Universal healthcare isn't free. People still pay the cost via taxes. As usual, when taxes are raised to pay for X, then a lot of the wealth stolen winds up in the pockets of middlemen.

I don't know how well universal healthcare works in other countries or not. It's practically impossible to get reliable data. If another country has a less restrictive doctor licensing cartel than the USA, then their medical care costs would almost definitely be lower. For example, if the USA allows 0.1% of the population to work as doctors but another country allows 0.5% of the population to work as doctors, then the other country could legitimately have lower costs and higher quality, even though the other country has universal healthcare.

In the USA, a medical degree costs $500k+ and 10+ years. Doctors have to protect the investment they have made in their careers, by lobbying the State for favors. If a medical degree could be bought and sold like taxi medallion licenses, they probably would trade for $100M+ each.

Also, if you get a doctor's license in another country, you can't come to the USA and start working. The license isn't transferable from one country to another. Otherwise, doctors would leave other countries and move to the USA!

In the USA, universal healthcare would almost definitely lead to people hiring doctors to treat them off-the-books. That's the last thing the AMA licensing cartel wants. Universal healthcare will almost definitely not occur in the USA.

It's hard to keep track of the healthcare reform proposals. I see different ones circulated all the time. Inevitably, the actual law will be 1000+ pages long and written in incomprehensible legal jargon.

Obama's healhcare proposal is a "State option". Private insurance companies will still exist. There will also be a government plan, funded via taxes. It will be illegal to not own health insurance. If you don't have health insurance from a private source, then you're automatically enrolled in the State plan.

"Not owning health insurance is illegal!" is essentially corporate welfare for insurance companies. Right now, a poor and healthy person will make the rational decision to forego health insurance, saving that expense. If Obama's plan is approved, they will have no choice to pay via taxes.

The "State option" plan will work like Medicare and Medicaid. When you purchase Medicare, you don't purchase it directly from the government. You purchase Medicare through a private insurance corporation. Each of them offers a slightly different plan, making the options very confusing! The corporations who administer Medicare and Medicaid make huge profits at the expense of taxpayers, from their role as middlemen. Similarly, they will make a huge windfall via the State healthcare plan.

In one of Obama's proposals, the healthcare reform will be paid by taking money out of the Medicare/Medicaid fund. As I mentioned before, there's no such thing as the Social Security and Medicare trust fund. If the Federal government has a taxation surplus, the net effect is deflationary. There will be later inflation as that pool of money is spent. The assets in the Social Security and Medicare fund have no tangible economic value. They are merely State bonds, but the Federal government is the issuer for those bonds. Those bonds must be repaid by future taxes, or future inflation.

Currently, the insurance industry is regulated on a per-state basis. If a corporation is licensed to sell health insurance in Illinois, it must pass another regulatory burden to sell health insurance in Indiana. This system leads to lots of small insurance companies, along with 50 separate state insurance regulatory bureaucracies. One proposal is that health insurance will now be regulated at the Federal level instead of the state level. This is corporate welfare for large insurance corporations. On the other hand, separate bureaucracies at the state level is also inefficient.

I'm amused by Obama's retoric regarding the "State option plan". He says "The State option will force market discipline on insurance companies, forcing them to lower their prices." The State directly entering a market is the *DIRECT OPPOSITE* of free market competition. The net effect of State intervention in the market is *ALWAYS* perks for those who lobby the State for favors.

The Federal healthcare plan will compete with private healthcare in the same way that public schools compete with private schools. People have no choice but to pay for public schools via taxes. This makes private schools accessible only to the wealthy. Similarly, private insurance plans probably will be driven out of the market by the State plan. The vast majority of people send their children to public school. After paying taxes, they have very little wealth leftover to pay for a private school. Further, the vast majority of people don't know that public schools are really State slave brainwashing centers.

People would already be paying for the "State option" via taxes, and they won't have wealth leftover for a private insurance plan.

As you mentioned in your comment, and as I've mentioned repeatedly, the real reason healthcare is expensive is the State licensing cartel. There is a conspiracy between the AMA and the government to artificially restrict the supply of doctors. This guarantees that doctors are highly paid, because there's a shortage of doctors. That's the reason why your insurance company pays $200+ when you see a doctor, but you only get to see him for a couple of minutes.

For awhile, HMOs were squeezing doctors to force them to lower their rates. The AMA retaliated by cutting the number of slots in medical schools, further restricting the supply of doctors.

"Eliminate State licensing requirements for doctors!" is a reform that cannot occur. The current license holders have a very lucrative monopoly/oligopoly. They can always profitably lobby to block reform.

"State licensing requirements of doctors protects customers!" is an evil fnord. The reality is that State licensing requirements hurt customers, via higher prices and lower quality. There's a shortage of doctors, so even a bad doctor with a State license can always find customers.

Once a doctor gets a State license, he needs to *REALLY* mess up in order to get his license revoked. Usually, a medical license is revoked only for a doctor who challenges the State. For example, Jack Kevorkian lost his State doctor license for declaring "Elderly people should have the right to commit suicide instead of suffering!" and then acting on his belief.

In the US medical system, most of the expense is paid in the last 3-6 months of a person's life. When I was involuntarily hospitalized, my insurance company paid the hospital $750+ per day. All the hospital did was give me a bed, food, forcibly drugged me, and I got to see the psychiatrist for less than 1-2 minutes per day. It was very profitable for the hospital. The psychiatrist spent most of the day filling out paperwork.

Once you're in a hospital, you're the property of the doctors who work there. You can't leave without the consent of the doctor.

When you call 911, you are routed to a specific hospital based on where you live. There is no market competition among hospitals.

A hospital makes a *LOT* of money per day per patient. Therefore, if a patient is almost dead, there's an economic incentive to prolonging their life for a few weeks, especially if the patient can afford it! (either via private health insurance or Medicare/Medicaid)

There's another flaw with the current system. If you're poor and uninsured and go into a hospital emergency room, then the hospital has a legal obligation to treat you, even if you can't afford it. The cost of this "free treatment" is paid by everyone else as higher prices. The reform plan merely shifts the burden and increases it, via taxes and mandatory insurance coverage.

The current incentives of the healthcare system are almost completely unrelated to patient health. If a doctor performs a test or procedure, he gets paid for it, whether the patient needed it or not. The patient is only indirectly paying the cost (via health insurance), so the incentive is for the patient to not object to unnecessary expenses. If the patient is damaged by something the doctor does, it's very difficult to sue for malpractice and win.

Suppose a hospital treats someone for a "mental illness". Whether the patient recovers fully or lives the rest of his life incapacitated, the hospital gets paid the same. The only reason I'm recovering is that I ignored the advice of my State psychiatrist.

Another reason health care is expensive is due to the damaging effect of the FDA, pharmaceutical corporations, and patent law. Treating someone via a drug is very lucrative, because the patient/victim must then take the drug for the rest of their life. The problem is that drugs suppress the symptoms of an underlying illness, without actually curing it. For example, anti-psychotic and anti-depressant drugs mask the symptoms of anxiety in someone who has seen parts of the Matrix, without curing the problem. As another example, anti-arthritis drugs make the patient not feel pain, but don't make them able to walk again.

If you're taking a prescription drug, you suffer withdrawal if you stop taking it. This provides the superficial illusion that the drug is beneficial. Once you're taking a drug, it's very hard to stop, because your body becomes addicted.

Over-use of prescription drugs has turned doctors into drug dealers. The patient must see the doctor regularly, to get a prescription refill. The doctor can see many patients in a short period of time, since all he's doing is renewing a prescription. Patients are pro-State brainwashed to believe "I'm taking a prescription drug. Therefore, I'm receiving appropriate medical care." It's a profitable arrangement for both drug corporation executives and doctors.

Even if the drug is later proven to be harmful, the doctor can always claim "I was tricked by the drug company!" Even if there's a class action lawsuit, via tort reform damages are limited. Typically, damages from a bestselling drug that's later proven harmful are less than 1 year of profits, even if there's proof that the drug company executives covered up evidence of problems.

A drug company must submit 2 positive drug studies to the FDA to get a drug approved. However, nothing prevents the drug company researchers from conducting 50 studies, and then sending the 2 most favorable ones to the FDA. If it were 50 studies for the same drug for the same illness, it would obviously be fraudulent. However, drug company researchers conduct many different studies for many different drug-illness pairs. By statistical randomness, some of them will seem favorable. Then, marketing hype creates an artificial demand for the drug, even though it's useless or harmful.

Even if a drug has negative side effects, that is easily covered up. Suppose a drug has a 1% chance of causing a heart attack when taken for 2 years. In a 6-12 week drug approval study, this effect won't be noticed. If necessary, unfavorable research results are not published.

The FDA restricts permissible treatments. Fake treatments like drugs are promoted, while some genuinely promising treatments like stem cells were banned. (The stem cell Federal research ban was overturned by Obama.) You cannot conduct medical research without getting permission from the FDA. This makes medical research expensive and inaccessible to all but drug corporation executives. This slows the rate of progress of medical science.

A patent for a drug expires after 34 years. Drug company executives workaround this via a clever loophole. They find a new chemical, similar to the original but slightly different. Then, they have marketing hype and phony research saying that the newer drug is better. Laws regulating medical insurance force insurance corporations to cover newer drugs in addition to older ones. The health insurance corporations don't mind this regulation because they pass the cost on to customers as higher prices.

Prescription drug costs are a large component of health care costs. Patent law combined with FDA regulation encourages the use of drugs to treat illness. Both doctors and pharmaceutical corporations make a lot of money off excessive use of prescription drugs. Any "health care reform" proposal must account for this.

The tricky part of "health care reform" is that a lot of people are making a profit off the current corrupt system. Any group that receives a massive State subsidy can always profitably lobby to block reform. In the present, doctors, insurance corporations, and pharmaceutical corporations receive massive State subsides. They aren't going to consent to a reform that wrecks their gravy train.

Any "health care reform" proposal must guarantee continued huge profits for those already receiving massive State subsidies. It's even better if "health care reform" increases the rate of looting and pillaging. Most people are aware of that the health care system in the USA isn't working. Due to pro-State brainwashing, they fail to place the blame where it belongs. The blame for the healtcare problem lies with the AMA licensing cartel and the FDA which restricts permissible treatments.

The "State option" "reform" plan has a chance of succeeding, because it ultimately accomplishes nothing. People will pay higher taxes. The middlemen and doctors still get their cut. The AMA licensing cartel, the insurance industry monopoly/oligopoly, and the pharmaceutical/death industry get to keep their cushy profits. With a State plan, there's an even greater opportunity for middlemen to line their pockets.

Here's a good rule of thumb. The primary beneficiaries of "State bureaucracy X" are the bureaucrats who administer the bureaucracy. They get to receive a nice paycheck, without doing anything useful. Insiders receive perks from lobbyists in exchange for favors.

If you mention the healthcare problem without discussing damaging State regulations and State licensing requirements, then you are pro-State trolling. I haven't seen any mainstream media outlet say "Are State licensing requirements for doctors harmful?" These unstated hidden assumptions are important.

In order to truly reform the health care system, agorist doctors are needed. People need to learn to work as doctors without a State license. People have been pro-State brainwashed to believe "Doctors must have a State license!", making them reluctant to see agorist doctors. I'd be reluctant to visit an agorist doctor unless he were proven trustworthy. As long as I have an on-the-books wage slave job, I'm paying for health insurance already via my corporate employer! Agorist health care probably won't be viable until the counter-economy is much more sophisticated. A "health care reform" boondoggle could actually be great, if it forces people to start working as agorist doctors.


not an economist said...

"Under "universal healthcare", all medical costs are paid by the State. All doctors are direct State employees. It is illegal to purchase health care directly from a doctor."

Lets be clear - there is universal health care in the UK BUT it is not illegal to have private health insurance.

s_baar said...

For awhile, HMOs were squeezing doctors to force them to lower their rates. The AMA retaliated by cutting the number of slots in medical schools, further restricting the supply of doctors.

Where did you hear this?

Anonymous said...

re: your RSS feed.

In Canada, you cannot sell private medical insurance for 'services' covered by the state. You CAN buy supplemental insurance to get yourself a nicer room and to cover expenses not covered by the state. This includes many ambulance rides, the 'co-pay' costs of most drugs, eye doctor visits, glasses and any non life-threatening dental work.

Any doctor CAN legally provide services covered by the state plan, but then is prohibited from receiving ANY money from the state for any medical services at all. Needless to say, it's just easier to move your practice to the USA than to deal with that. eg., if you accept $10 to put a bandaid on a scrape, you are immediately prohibited from receiving any state money and have to explain to any patient that they will have to pay for your services the state provides 'free' at other doctors. Any doctor trying this also is 'examined' ruthlessly by bureaucrats.

The inherent wait times in the socialist system have been ruled unconstitutional in Quebec. So, private clinics are starting to appear. It's the only practical way to actually get yourself a family doctor. At the way things are going, in 5 years, Americans will be coming to private clinics up north as the system becomes privatized, as the state takes over the US system.

Of course no politician will acknowledge the system is being privatized. But, as soon as the US one is socialized, the pro-state, anti-American trolls will extol the virtues of Canada's private system.

FSK, if you're a programmer, why don't you move to Central America? My rent is $150/month w/hi-speed internet. A big bottle of beer cost $1.50 in a nice restaurant and I challenge anyone to eat $10 worth of restaurant food. It is impossible to eat $5 worth of grocery store food. Not because of quality, but because it's so cheap, and not full of steroids. $25 is a weeks worth of groceries easy. No house has air conditioning or heaters because they're unnecessary. Move every 180 days to a different country and be a 'permanent tourist' in the eyes of governments. Of course since you're American you have 10 years of IRS payments to make after renouncing citizenship, but by not financing state murder of aliens won't you sleep better?

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