I blog about free markets in medical care and transparent pricing.
United Health Care has announced that regardless of the Supreme Court’s decision regarding the constitutionality of the Unaffordable Care Act (UCA), as a company they will honor some of the provisions provided within the legislation, including the elimination of lifetime benefits on medical care and “no cost” preventive screenings. You can read the LA Times version of the announcement here.
Lew Rockwell has a section on his great website (LewRockwell.com) called “political theatre.” One of my favorite parts of his site, this serves as my regular reminder of how D.C. politics serves primarily the role of a distraction, the purpose of which is to conceal the exchange of bribes and favors by the power brokers behind the scenes. I have recently written that I didn’t think the proponents of the UCA cared whether it was overturned by the courts, as the UCA was, like most laws, simply a distraction necessary to conceal the transfer of massive taxpayer money to government cronies. United Health Care was one of the proponents of the UCA. Having dealt with United Health Care as a physician, I can assure you their “honoring” certain provisions of the UCA regardless of court action, is not a touchy-feely extension of their love for all of us poor, sick folks. My guess is that they are keeping their end of the bargain, a bargain meant to completely destroy the private insurance industry. You see, “honoring” these provisions is part of the equation that will cause an unsustainable increase in insurance premiums. United and others will charge more and more and more (this stuff they are “honoring” isn’t free, you know!) until “the people” cry out to their D.C. goon for relief from “rising health care costs.” The result will be a complete government takeover of this industry, the administration of which will be left to United and the other biggies.
Just as unsurprising is the “high five” given to United by Arthur Kellermann of the Rand Corporation. In the same LA Times article linked to above, Kellermann takes his hat off and bows to United for this promise to “honor” certain provisions. He should bow and perhaps grovel as United is one of the Rand Corporation’s largest donors! You can check that out here. Interesting that the Rand Corporation (no kin to Ayn Rand) has shacked up with the usual suspects, especially since their famous study in the ‘70’s and ‘80’s indicted HMO’s as insurance products likely to be over-utilized. The study also concluded that the focus on preventive care did not improve patient outcomes. You can read about their study here. Now they are funded by the giant medical corporations for which they gladly provide cover. So much for their objectivity.
Keeping Rockwell’s “political theatre” distraction model in mind and Rothbard’s “cui bono”(who benefits?) makes it easier to see through the curtains, I think. Think about it. No matter what happens to the law, the insurance companies are going to proceed as if it is in effect. Who’s kidding whom?
G. Keith Smith, M.D.
IPAB: Independent Payment Advisory Board. MLR: Medical Loss Ratio. ACA: Affordable Care Act. Can you say George Orwell? Let’s take one at a time.
IPAB: First, there is nothing independent about this proposed outfit. Selection of the folks on this panel will make senate confirmation hearings look apolitical. These seats, like almost everything in Washington, will be sold. Not really sure why Blagovich is in jail….selling seats and positions of influence is standard operating procedure in D.C. Second, there is nothing advisory about this outfit. What they say goes. And they will be wrong. No one and no group can possibly determine the “moving target” of the market clearing price (that price that is “correct,” in that at this price there are neither surpluses or shortages) and get it right. What is the “correct” price today may not be the “correct” price tomorrow. What’s right in Baton Rouge may not be right in Camden Maine. They should all read Mises’ “Socialism” prior to taking the job…not that it would make any difference. Here he clearly shows that socialism’s failure is due to the absence of a rational system of pricing. In fact any economic system without rational market-determined pricing will fail. IPAB, however, is not a board intended to maximize the utilization of resources. It is intended to intentionally ration care by setting a price below that required in the marketplace. One would have to be incredibly naive to believe otherwise.
MLR: You should know what this means. It has two meanings. What those in government say it means to effect and then what it is really meant to do. Two really different things. What the government says: no more than 10-15% of a health insurance company’s revenue from premium collection can be used for administrative overhead. 85-90% must be paid out to satisfy claims. HOORAY for the consumer, right? Wrong. Here is what MLR really does. It puts the little insurance companies out of business. 10% of 20 billion dollars is enough to pay administrative expenses at the big boys. 10-15% of 8 million dollars may not be enough to get it done for the little player. Result? All of the little guys clients go to the big boys. Less competition in the marketplace. Consolidation in the marketplace. Why do you think the giant insurance companies supported this aspect of the newest health care legislation?
Affordable Care Act: Even the government’s own studies show that this legislation will add at least 1 trillion in health care spending. This will be primarily absorbed at the state level with wildly increased Medicaid expenditures. Companies providing health benefits to employs are anticipating huge increases in their obligations. Many companies will begin seeking insurance products that are insurance in name only, with little or no benefits attached. EPO’s(exclusive provider organizations) are an example of such a product, an unimaginative twist on HMO’s.
I think that in his worst nightmares, George Orwell never imagined such unapologetic and false labels issued by the state.
G. Keith Smith, M.D.