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When Government Dictates Business, Everyone Wins but You

Jimmie | May 13, 2009 | Comments (0)

When corporations and the government get together to figure out how they can all do stuff for you, you can rest assured that your best interests will not be discussed all that much. So it will be with government health care.

If the coporativist bargain works out as they plan, both insurers and hospitals expect to profit from the government mandating health insurance coverage for all Americans. Insurers look forward to millions of new customers who will have to buy insurance either individually, through their employers, or through government vouchers. In addition, since the government will set rates and benefits, health insurers won’t have to bother with the vexing problem of competition. Of course, state and federal mandates and regulations have already taken us a ways down this road, but corporativist “health care reform” should eliminate any lingering vestiges of consumer choice. For their part, hospitals will have plenty of newly-insured patients to fill their wards and will no longer need to offer uncompensated care to the health care indigent.

As for the pharmaceutical companies, they have experienced rapidly increasing price controls over the years. For example, the Obama administration’s 2010 budget lowers what Medicare will pay for drugs from 15 percent below average price to 22 percent below average. In agreeing to the corporativist bargain, those companies hope to get a better deal and to prevent the adoption of cost-benefit tests for the approval of new drugs.

Along similar lines, Medicare and Medicaid price controls have been squeezing doctors’ fees for decades. As the federal government either converts private insurance companies into minutely regulated public utilities, creates a rival government health care payment system, or simply adopts a national single-payer (government entitlement) system, doctors rightfully worry that their fees will drop even further as government bureaucrats attempt to slash costs. But with a seat at the health care negotiating table, doctors hope to make the best out of a very bad situation. Interestingly, health care labor unions will probably emerge as the biggest winners in this corporatist arrangement, because they’ll be able to extract higher than market wages from politicians dependent on union votes.

Notice who doesn’t get a seat at that table and whose care and cost isn’t even a consideration?

I don’t fault doctors, hospitals, insurance companies, or drug companies for trying to carve as large a piece of the government’s pie as they can for themselves. The simple fact is that when the government decides to act, private companies have only two options: try to steer the government action to a course that harms them the least or be destroyed.

The bonus for them, though is that there’s no more worrying about competition. Their government-approved monopoly status gives them all the security they need.

But what do you get out of it? Better healthcare? Cheaper healthcare? Guaranteed healthcare? Well, from what we’ve seen in Canada and Britain, it doesn’t look like any of those are on the menu. So what are we getting for our considerable trouble?