HT: Vox Day
Thomas Sowell, in his books Basic Economics and Applied Economics: Thinking Beyond Stage One, provides a critical review of government interference in health care.
Putting things in simple terms,
(1) If government imposes a price ceiling on anything, then you still do not address the fundamental issue of the cost of the product; the cost merely gets distributed in other arenas.
(2) If the amount of demand (surgery) stays the same and price is not allowed to rise, then there will be a shortage of product available (surgeons to deliver the surgery).
(3) That shortage gets addressed through one (or more) of several options:
(a) rationing — government deciding that a patient does not “need” a particular product
(b) delay — management of a que that is subject to bureaucratic bias and little accountability
(c) increasing the available supply of the product, in ways that adversely impact the quality of the goods and services delivered.
Looks like this was the latter.
Dr Sulieman Al Hourani was only supposed to cut out a cyst, but removed the whole right testicle instead.
Why would this be a big deal, given that American doctors have done exactly this?
I’ll answer in one word: accountability. Yes, there are quacks who make it through American medical schools, make it through residency, manage to pass their boards, and go on to inflict damage on patients. But the system here is far more transparent than, say, importing a doc from BFE.
It’s not so easy to vet a doc, who comes in from Jordan, as government–given a supply-demand management problem–has no compelling reason to do things that would crimp the supply. And it’s an order of magnitude harder to sue a regulator who fails to regulate–when was the last time the SEC or the OTS faced, let alone lost, a lawsuit–than a doc who fails to practice.
(Even with the latter, it’s like locking the house after the burglar arrives, and this adversely impacts supply, as raises the cost for the good docs to stay in business.)
As for Vox’s take on Obamacare, I’m not so sure that it will end as badly. This is because Obamacare–if Americans take advantage of it–will destroy the insurance industry without providing a public option. This will return health care back to doctors negotiating with patients, minus the middleman.
(Denninger says this will pave the way for a government-run single-payer system. I disagree, because–if the insurance industry implodes, then government credibility will be zilch, and no President will have the political capital to pursue such a system in such a case. Besides, government will be out of money.)
The wildcard: if that happens, look for Blue Cross/Blue Shield, Aetna, Humana, HealthSouth, etc. to clamor for bailouts. The Federal Reserve and Treasury Department will get behind them and perhaps even make the pitch. But it won’t happen. Not with borrowing costs up several percentage points…