She’s Got That Right
I heard this phrase first on a Fox Business “Nightly Business Scoreboard” and thought it was “Historical Quest for Delusional Grandeur”, but this clip (that I think is from another FOX news show) has Andrea Tantaros saying “Delusional Quest for Historic Grandeur”. I think the one I remember was the first use (it was a bit spontaneous as it came across, where the later use is more practiced.) Either way, I think she has it right.
Every Government “Gift” begins with a forced “Theft”
The government does not create wealth nor increase national resources. The government, in order to give “The Gift” of free medical treatment, must first take the resources from someone else. Every government “gift” begins with a “theft”; the only question is relative merit of the two actions.
Why she has it right is a bit convoluted to demonstrate, but simple to grasp:
Medicare / Medicaid are running out of money. The Ponzi / Madoff scheme of Socialized Medicine needs “new blood” in the game or it will collapse.
So they need to somehow suck a large chunk more money out of the ever smaller number of workers. And folks would notice a $5,000 to $8,000 increase in their income taxes.
The present system takes money from those who are under retirement age and gives it to those who are over retirement age (Medicare), very young (they added kids to the system a few years back), and the poor (Medicaid). The major problem the Dems face is that there is a huge bolus of folks (The Baby Boomers) who are about to retire and collect Medicare. I know, I am one. This is the actuarial overhang facing the Federal Government.
This unfunded obligation WILL come home to roost in the next 10 years.
When first set up there was on the order of 100 workers paying for each retiree. We are rapidly headed for 2 to 1. And about 90% of lifetime medical costs come toward the end of life. Those last years consume a great deal of medical resources. The “bill” (to be presented to the Gen-X, Gen-Y, and Millennials) will end up being about $20,000 each per year (potentially headed to $40,000). Right now, it’s about $5,000 to $8,000. (These are rough estimates, but good data is hard to come by.)
So the Dems know that they have a Hobson’s Choice. They can admit that their Socialized Medicine game is up, that the system is bankrupt; or they can try for one more round of “new marks”. What I find hilarious, is that they have convinced the very people who will be fleeced the most that this is a good idea for them. The Gen-X, Gen-Y, and Millennials who will be paying for all this are the ones most supportive of “Change We Can Believe In”. I think they will eventually realize this means “Change We Will Be Forced To Pay For”…
Why do I say that? Because the Boomers will be retired and on the Medicare dole. I’m not going to be paying for Medicare, I’m going to be collecting it!
How The Fleece Works
The new Socialized Medical Plan has a couple of gimmicks to get the gold.
First, and in some ways worst, is the mandate that you must buy medical “insurance”. Ignoring the fact that once the government can mandate purchases of anything, ALL of “your” income is now theirs to spend (you no longer own any money, you get any left over after the government spends most of it… think of it as a ‘gift’ ;-)
Gee, buying insurance sounds OK, right? Small Problem: Part of the law eliminates many of the valid distinctions between insurance and socialism. One is forbidden to use many actuarial methods to match actual risk to premium. The end result is to make huge premiums for “needy” folks smaller and small premiums for young healthy folks huge. It’s a stealth tax / wealth redistribution to make the young and healthy pay about $5,000 of ‘health care tax’ but call it ‘health insurance’ even though they will use nearly none of it. And the folks who get whacked (by paying for this) are all in love with “free medical care”… Go figure.
We will see how they feel “10 years in” when that “mandated purchase” runs up to $8,000 then $10,000 and eventually $20,000 per year… Boomers WILL retire and the Medicare load WILL roughly double in short order. Then it will get worse as we age, become ever more sick, and suck down exponentially more medical services. On YOUR nickel. (Or thousand dollar bill…)
Cost Savings and Fixing Doctors
Second, Doctors will get the shaft. In the jargon, this is called “The Doctor Fix”. (One wonders how the Doctors feel about being “fixed”…) The plan is that in a few years the pay rate for Doctors will be cut by 20%. Don’t think so? Ask those banking executives and car company executives who is setting their pay caps…
Socialism is first and foremost a “command and control” system. You will be controlled, by command. If you don’t like it, you can go work for the other national medical system… I expect we’ll be seeing a lot of older doctors just retire, and the best and brightest will not enter the system. “Wage and Price Controls” are regularly tried, and regularly fail. Lower wages get less supply of labor and / or lower quality of product. It takes a few years to work all the way through the system, but that’s the end game. Every time.
The “cost savings” they talk about are a fantasy. If they could be achieved, they would have been achieved. The Medicare / Medicaid system is just not competent to deal with this. (I once worked as a medical accounts clerk, I also programmed a medical accounts receivable system early in my career. I’ve got medical billing experience…) The government billing systems are always byzantine and inefficient. They already under pay.
The ‘dirty little secret’ is that the present socialized medicine system (about 1/2 the US system now) does not pay it’s own freight as it is. The shortfall is ‘third partied’ onto the bills of everyone else. THAT is why private medical insurance costs are sky rocketing. Another stealth tax theft for wealth redistribution gift. So how are you going to have ‘cost savings’ in a system that is already about 40% shy of covering it’s own costs?
Two Sets of Books and Rubber Rulers
There are some other gimmicks, too, but I’m just going to skip on down to: Double Set of Books. The OMB has said that the $ 100 Billion+ of ‘budget savings” are false and only the result of counting the (IMHO illusory) ‘efficiency improvements’ twice. Once to keep Medicare solvent (where they are spent) and again as national debt offset. You can’t do that. If you spent it, it no longer offsets the deficit. The medical plan actually runs $ 100 Billion+ of deficit. Right Out The Gate.
And this can only get worse since the deficit will grow as more Boomers age onto the “freebee” socialized medicine system and fewer workers are left paying (that is the fate of the Gen-X, Gen-Y, and Millennials – to pay. I, for one, do not wish to sell my children into such tax bondage for my own comfort…)
Oh, and don’t forget that the various taxes (real direct and stealth indirect) start immediately but the “benefits” of “The Gift” only begin 4 years later. They compare 10 years of payments with 6 years of costs… So you can take all the “bad numbers” and give them a 40% ‘uplift’ if you want to know the reality… This $Trillion cost that is only $100B+ of actual deficit with a 10 year accounting is actually running about a $400B deficit run rate (and that rate will rise as Boomers retire and the worker / retiree ratio gets worse.)
What to do?
It would be best to have the socialized medical takeover fail and to confront the problems already caused by socializing 1/2 of the system by fixing that broken half, not torpedoing the whole thing.
We need to recognize that socialism leads to rationing and explicitly ration the quantity of medical services payed for by Medicare/ Medicaid.
Further, we need to be honest and mandate that all hospital fees paid for by insurance of any kind be paid at the same rate. (Letting the doctors and hospitals choose to charge more or less of folks paying cash or the indigent with little money and no insurance). But the Socialized system needs to pay it’s own freight and not put a stealth tax on the rest of us (now, they will pay $100 for a surgical tray that private insurance must pay $200 to get. The reality is that both ought to be paying $150; as a hypothetical example.)
The medical malpractice tort system needs to be rolled back from what it is today. It is used as a wealth redistribution system to provide lifelong care for folks with problems. A child is born with ‘issues’ and they will be paid for, for life, by the doctor via insurance premiums. Never mind that in many cases the doctor prevents issues (but does not get a lifelong stipend from that…) and never mind that in many cases the outcome would have been far worse had the doctor not been there to make things as good as possible.
Basically, we need to stop blaming doctors for the fact that we are sick and they can not fix all ills. We need to let them do what they can and try things that have risks (with our consent) knowing that it is not THEM that cause the ills and it is not possible for them to fix all ills. The alternative is ‘no care’. It is already hard to find OBGYN services in many areas. This will get worse.
Simply doing those two things would cut medical costs for most of us by a lot.
An added thing, that I do not expect will ever be done, is to increase the number of doctors. The medical establishment has a tight grip on the supply of doctors. I doubt it is possible to break that grip. But if you would reduce the cost of medical care, the easy way is to build more medical schools and create more doctors. Simple supply and demand.
Turning the whole thing into a copy of the UK system will not be a good thing. (I’ve “had dealings” with the UK system. It makes the worst USA “HMO” look like a godsend).
Should the Dems Dominate
They will claim their “Delusional Grandeur” and speak a great deal about their Historic Gift. They will laud each other and their limousines will go from party to party as the champaign (oh, pardon, “sparkling wine”) flows.
But eventually the Laws of Economics will win out.
The efficiency improvements will simply not be there. There is not a lot to be gained. Computerized medical records cost more, not less. The fantasy that they will reduce costs is just that. The sales pitch for the computer consultant who will make a bundle at the public trough. (That you will then have no medical privacy will be glossed over with ‘honey words’ about how great their security system will be… but don’t believe it. The tens of thousands of folks who are authorized access will assure no such thing. And do you really expect any government agency who wants access will be kept out by the government?…)
So costs will skyrocket. Over the next decade the ‘private insurance costs’ will rocket to $10,000 then $20,000. There will be great wailing and gnashing of teeth about those horrid private insurance companies bilking people (even though the rules are set up to force them to do so to feed the socialism monster). In the end, the Dems will be back to give “The Gift” of single payer to that group not already with the socialism noose installed.
But where will the money come from to pay for it?
Simple: It won’t.
There will be some broad increase in taxes (such as income, inheritance, etc.) but that will be far too little (no matter how big it becomes). So the traditional three answers will be useed.
1) Print the money. There will just be a massive run to the printing press. We are seeing this already. $12+ Trillion debt and rising by the hundreds of billions every few weeks. “Bugger the Dollar”. The results will not be pretty. Inflation is a ‘stealth tax’ on anyone who holds cash or cash denominated assets like bonds. Don’t think you own any bonds? How do you think your insurance company sets money aside to pay your retirement annuity, your life insurance, your …
2) Cheapen the product. First step will be ‘the doctor fix’. Then will come forced clinics for things that presently are office visits. Expect time limits on consultation and forget customized care. You will get the approved drug in the approved dose that works for 80% of the folks. If you are in the 20% that need the more expensive and more effective drug, well, tough…
3) Ration access. In the end, this is all that can really work. The whole “health care debate” is really over how to do the rationing. There is an infinite demand for medical care. Toward the end of life, it can take a lifetime of money to pay for ever more exotic life extension measure that give ever less benefit. At present, if you are a billionaire, you may choose to spend $100,000 a day. This drives medical advances that eventually benefit us all. But if you have little money, do not expect a knee replacement at 70 something years old. So we will move from ‘rationing by price and income’ to ‘rationing by government employee’. But along the way we will lose about 20% (that’s the usual rough estimate for ‘slippage’ when money is washed through D.C.) and that is how much more will go to government clerks and not to medical care.
We will end up paying more, and getting less. With luck, the system will collapse along the way and we can start over. I, for one, will be finding every way I can to avoid paying for it, while using as much ‘services’ as I can get. And in the end, that is typically what causes The Socialism Shiny Thing to collapse. I’m happy to ration my own care when spending my own money; but if I’m spending your money, well, that’s a whole different thing …
And that is why this “historical quest” will end in “Delusional Grandeur”. Because in the end we will be spending long hours standing in queues at dismal government clinics to get mediocre care from underpaid (and eventually that leads to under skilled) staff with poor facilities that cost us far too much, and being told that the thing which we need is not on the approved list, so we can’t have it. And we will not think kindly on our masters who bound us to this fate so long ago…