FRONT PAGE CONTRIBUTOR
Puncturing our health care illusions
Senator Rand Paul (R-KY) has been trying to play along with ObamaCare. Alas, his son drew the “Go Directly to Medicaid Jail” card, inexplicably diverted into that mournful welfare program by the supposedly exceptional Kentucky exchange system. Granted, “exceptional” status is a pretty low bar to clear when it comes to ObamaCare exchanges, but Kentucky was supposed to have one of the better ones… and it just won’t let Senator Paul’s son buy an insurance plan. At one point, he had to march down to the local offices and prove he existed. Beating any meaningful information out of the online system has proven to be quite a chore. And it looks like a chore not many people are interested in undertaking, because only about 26,000 people have signed up for plans in the state so far.
We’re left to wonder how many people are getting routed incorrectly into Medicaid… a system that wasn’t in good shape to handle the people ObamaCare intended to send there. Now that all the lefties are letting their hair down and admitting that ObamaCare was nothing but a scam to lure America into single-payer health care – you know, exactly what the critics were saying a few years ago, to howls of outrage from these same liberals – it’s worth remembering that Medicaid is a pretty good example of what socialized medicine looks like. It’s not pretty.
But we weren’t supposed to think about that, so ObamaCare – like every other left-wing program – was a fraud, peddled on a mountain of lies. In practice, it’s not much more than a fat Medicaid expansion plus a broken website, a pile of mandates President Obama randomly enforces according to his whim, and a whole lot of wealth redistribution. As you can tell from the chaos currently boiling through hospitals across the land, nobody who designed this program knew or cared much about health care. The first priority of ObamaCare was to secure its continued survival, creating a permanent expansion of government power. All that “doctor” and “insurance” stuff could be worked out later. Eighty percent of the Affordable Care Act was written in either pencil or invisible ink, but the funding and vote-buying code was chiseled in granite.
We could have spent 2009 debating whether or not it was a good idea to dramatically expand Medicaid, but honesty about that program isn’t easy to come by, either. Avik Roy had an article in National Review last May about “The Medicaid Deniers” – liberals who labor furiously to ignore the sizable body of evidence that Medicaid doesn’t work very well, despite being extremely expensive:
For years, studies have shown that patients on Medicaid — America’s government-run insurance program for the poor — do no better, and sometimes do worse, than those with no insurance at all. The largest such study, from the University of Virginia, evaluated 893,658 major surgical operations from 2003 to 2007 and found that surgical patients on Medicaid were 97 percent more likely to die before leaving the hospital than those with private insurance. Medicaid patients were 13 percent more likely to die than those with no insurance at all. The study adjusted for income, age, geography, prior health status, and other factors.
Many other studies have shown the same thing. There are others suggesting that Medicaid isn’t worse than being uninsured, but that it isn’t better, either. The main problem is that Medicaid pays primary-care doctors an average of 52 cents for every dollar a private insurer pays. This leads many doctors — and also specialists — to stop taking patients on Medicaid, making it hard for poor enrollees to get routine check-ups and needed care.
Then we started getting data out of Oregon, which held a lottery to expand Medicaid access several years ago… which presented the sort of scientific experimental conditions one rarely finds in social policy. The only finding friendly to Medicaid ever to emerge from the Oregon experiment was a single early report that said the people who signed up for the program “felt better about their health.” Everything else, including the actual health of the participants, has been so dismal that the liberals Avik Roy tagged as “Medicaid deniers” began making absurd, embarrassed attempts to discredit the study they initially held forth as a holy grail.
The latest bad news to roll in from Oregon arrived last month, when it was discovered that “expanding health insurance to low-income households does not decrease their use of emergency rooms,” as Forbes put it. On the contrary, the Oregon data showed “expanding Medicaid to cover these households instead increases their emergency room use by a sizable 40 percent.”
That’s a bombshell finding that demolishes one of the core rationalizations for ObamaCare, which was supposed to save us from the menace of emergency-room abuse by forcing everybody into insurance coverage at gunpoint. This insurance would cover preventive care that made emergency room visits unnecessary. But in Oregon, those Medicaid patients used their insurance benefits and still turned up at the hospital for non-emergency medical needs. As Michael Cannon at Forbes wryly notes, “the hypothesis that free preventive and primary care would reduce ER use was largely untested. In contrast, the Law of Demand – i.e., when the price of something like emergency-room services falls to zero, the quantity demanded will increase – has been well-vetted.”
So we’ve ended up with Medicaid bloat nobody was honest about, on their way to devolving the entire American medical industry into one big, costly, dysfunctional Medicaid program. Of course the Left lied about all this. That’s what they do. They believe the government is intellectually and morally entitled to control our lives, so for as long as we’re allowed to cast potentially inconvenient votes that would hinder that great endeavor, lying to the public is fully authorized and endorsed. The American people take every step forward wearing a blindfold, and if they dare to step back, they find cattle prods in their backs.
Illusions are expensive. Or, to turn that around, knowledgeable and informed decisions are the most efficient way to allocate resources. When both buyers and sellers know what a service or commodity truly costs, and that cost is a direct reflection of supply and demand, a state of maximum efficiency is reached. Central planning is all about taking both choice and knowledge away from individuals; we live within the illusions government sells us, according to political decisions about how much something should cost, and how it should be allocated.
Our health care journey has rambled through decades of increasingly messy, confusing, destructive government interventions… each of which sets the stage for even more government intervention, right up to the pre-planned collapse of ObamaCare that will usher in single-payer socialism. That sort of thing happens in other areas of our lives, but it’s rarely so obvious. Health care consumers grow ever more distant from the purchase of the resources they consume. Nobody really knows what any of it costs, or just who is paying for it.
The Oregon Medicaid study shows that process arriving at the worst of all possible worlds, with out-of-control demand for a product – medicine – with fairly inelastic supply. We can’t easily crank out more doctors and nurses to handle spot demand. They’re not really careers people can switch to later in life, the way increased demand for other forms of skilled labor can naturally attract more attention from the workforce. Medical training is a huge commitment of time and money, as is the development of new medicines. The dictates of ideologues, central planners, and vote-buying politicians will never handle this complex interaction of supply and demand as well as the individual decisions of free people would, especially in a country as large as the United States. But because people really don’t like handling their own health care decisions, illusions to the contrary persist. The Left was clever to focus on taking a liberty that many people are willing to relinquish… provided they don’t think too hard about the details. You know, the details nobody on the Left has ever been honest with us about.