I blog about free markets in medical care and transparent pricing.
Thomas DiLorenzo has a new book out: ”Organized Crime-The Unvarnished Truth About Government.” I highly recommend it as well as his books on Lincoln and the statist, Alexander Hamilton. His discussion of the mechanics of Washington influence peddling will either wake you up to what the vast majority of politicians are about or will make you laugh out loud if you already know.
He actually has a chapter called, “Pay to Play: Why the Fuss?” I think that reading this book will help everyone understand many of the otherwise unnoticed events taking place all around us. Today, for instance, Aetna announced their plans to buy Coventry Health Care for 5.7 billion dollars. If you asked “where did Aetna get 5.7 billion dollars to go shopping for competitors to buy out” you go to the head of the class. If you are having trouble connecting the dots between the high cost of the premiums you pay to Aetna and their buy out of Coventry, you should go to the back of the class.
What if 5.7 billion dollars weren’t taken out of the medical economic marketplace? What would the price of health care look like then? This is a pretty significant overhead, don’t you think? How much more expensive is a cardiac surgery than it should be to ensure that the Aetna suits get their cut, one that stuffs their accounts with numbers like 5.7 billion?
If you read DiLorenzo’s book you will see the real crime, though. Huge corporations (not just heath care giants) will pay politicians giant sums to enable industry consolidation. Simply, the fewer players in any market, the more power those remaining will have. Monopolies or near-monopolies are the goal of the giant corporations as this power frees them from the customer-serving influences of the free market. With Uncle Sam riding shotgun, they can take what they want from individuals, rather than live or die based on the quality of the product or service they provide. Their profits soar no matter how abusive they are to their captive “customers.” I guess deep down, these giant corporations want to act like the government!
So what is the real crime? Think of Coventry’s sale to Aetna as a casualty of Obamacare. Heavy regulations like the Medical Loss Ratio (that don’t really affect the big carriers), have not only forced smaller companies like Coventry (historically better with customer service than the bigger players) to sell out, but to do so at a lower price. Garage sale prices are always lower if the seller is facing bankruptcy. And see how it works? You carefully shopped and bought Coventry but you get Aetna anyway!
You see now that Obamacare allowed Aetna to steal Coventry in a way. Made them sell and for less than what they thought was fair. This is government at work. The same thing is going on with the rural hospitals, forced into the corner with “Recovery Audits,” a predatory activity by Medicare that the big hospitals have embraced. Unable to comply or withstand these “Audits” many if not most of the rural hospitals will fail, a failure which results in consolidation, fewer players.
If this were occurring in the furniture or swimming pool industry, we might shake our heads and shrug it off. That those in Washington are enabling this activity in the health care industry will result in misery and death while their rich benefactors get even richer. Health care is much too important to involve the mob from D.C., the District of Criminals.
G. Keith Smith, M.D.