Lowering Healthcare Costs Is Expensive
From CNN to the Milwaukee Courier, complicit media are gushing as the Biden “administration takes more steps aimed at lowering health care costs.” Both logic and painful experience proves the Biden approach is precisely the wrong way to improve medical care in the U.S.
All Washington policy decisions are implemented through regulations promulgated by various agencies that control healthcare: CMS, IRS, FDA, CDC, NIH, OSHA, NLRB, etc. Most people do not consider that regulating healthcare (or anything) requires very costly BARRCOME.
A Bureaucracy must be created which in turn hires people to Administer its activities. Rules must be written and vetted to reflect newly passed federal policy. These are turned into specific Regulations with which providers must Comply. Additional bureaucrats are needed to Oversee healthcare workers’ compliance with federal Mandates. Finally, there is Enforcement, punishment when providers fail to follow rules, regulations, mandates, advisories, guidelines, and prohibitions.
BARRCOME costs money for people, computers, buildings, supplies, not to mention opportunity costs. In 2022, approximately half of all U.S. healthcare spending ($4.3 trillion) went to BARRCOME!
To pay the costs of BARRCOME, money is diverted from patient care. To fund the extensive BARRCOME in the ACA, $716 billion was taken from the Medicare Trust, funds intended to pay for seniors’ hospital care. By lowering costs through BARRCOME, Washington reduces access to care and indirectly kills Americans.
Biden claims he will lower healthcare costs by promoting competition in healthcare. This is truly ironic. Federal regulations are why there is currently no effective competition in healthcare. “Effective competition” in any market reduces costs and raises quality.
In a free market (which healthcare most assuredly is not), prices are driven down because sellers (providers) compete with each other for buyers’ dollars. In today’s healthcare, providers compete for low bid health plan contracts, not for buyers’ spending choices.
In a free market (again, which healthcare is not), buyers spend their own money and thus have a powerful incentive to economize. In our third-party, government-controlled payment structure, buyers (patients) do not pay for care out of pocket.
As long as Washington rather than buyers (individual patients) controls healthcare spending, and as long as sellers do not compete for buyers’ own money, spending will continue to rise, and quality, especially access, will decline. Following the implementation of the ACA, maximum wait time to see a primary care physician increased to 122 days. Americans pay the price for federal BARRCOME in unsustainable federal spending and death-by-queue.
Washington’s regulation of healthcare has other, devastating nonfinancial costs.
Biden’s Inflation Reduction Act of 2022 included provisions to “lower the cost of drugs.” This is done by price fixing. Medicare sets the price it will pay for medications as “allowable reimbursements schedules,” even though the law claims prices will be negotiated. To envision the power disparity in such negotiations, imagine a pharmacist swimming in the ocean negotiating the right of way at sea with an aircraft carrier. History shows the effects of price fixing, viz., the Soviet Union’s central economic control: shortages, low quality, and absence of entrepreneurship and particularly innovation. By regulating (down) the cost of today’s drugs, Washington is guaranteeing a future devoid of new miracle cures.
When Washington bureaucracy regulates (controls) health care, i.e., the practice of medicine, it directly harms Americans by being anti-scientific. Covid experience is proof.
The true scientific method requires unrestricted dialogue with no censorship, no suppression of data, and no labels such as misinformation. Competing ideas and divergent data fight out in the open until the truth is revealed. No one person or group, especially not the Washington medical bureaucracy, has the exclusive hotline to the truth.
With the first U.S. death attributed to CoViD-19 in January 2020, Washington with its bureaucrat-MD spokesman, Anthony Fauci, took control of the practice of medicine out of doctors’ hands and required them to practice what he said was good medicine, “based on science” (per Fauci). By suppressing, censoring, and cancelling medical ideas not consistent with his personal narrative, Fauci’s behavior and Biden’s mandates were the very antithesis of science.
Covid also demonstrates the perversity of federal regulations. Politicos claim they fix a big problem, like Covid, while stonewalling the fact they created the problem in the first place. Recall the repeated denials that the virus came from a Chinese lab supported by the NIH.
We now know that the Covid pandemic was a scam. Washington hyped a flu-like illness dangerous only to a small segment of the population into a national existential threat and used their fabricated crisis to justify medical mandates that were unnecessary, draconian, and medically harmful, even fatal to both people and to our freedoms. They used Covid to bludgeon the Bill of Rights, in particular Amendments One, Five, and Ten.
The more Washington regulates healthcare, the worse off Americans are, medically, financially, and as a society. Since over-regulation is the root cause, the cure is obvious though Washington anathema: reduce regulation.
Deane Waldman, M.D., MBA is Professor Emeritus of Pediatrics, Pathology, and Decision Science; former Director of the Center for Healthcare Policy at Texas Public Policy Foundation; former Director, New Mexico Health Insurance Exchange; and author of the multi-award winning book Curing the Cancer in U.S. Healthcare: StatesCare and Market-Based Medicine.
