Death and Budgets

We already touched on the point of "private insurers rationing". The distinction between "coverage" and "care" nullifies that argument and has been discussed at length in this thread. You have offered nothing to counter that so your assertions to the contrary are empty.

As to the logic behind my claim that the IPAB will lead to death panels, that rationale has been spelled out numerous times and in numerous ways in this forum. It involves simply an understanding of basic economics (which is, unfortunately, a prerequisite far too many people fail to meet), the concepts of moral hazard and mission creep (both of which I have explained numerous times here) as well as an understanding of the typical worldview and incentives of the political class (specifically bureaucrats) and simply a look to the history of other countries where government has had to control costs in healthcare.

Entitlement programs, especially Medicare, create massive moral hazard leading to ever increasing costs. Since the program is set up as a Ponzi Scheme, it's unsustainability is guaranteed from the start.

Washington's response to set arbitrary reimbursement rates that don't even cover the costs of the medical care in question and significantly delay payment only further create massive distortions of the market and increased costs.

Considering the fact that the political class' worldview predisposes them to seeing the "solution" to these problems as more centralized control, a downward spiral of maldistributed resources and ever rising cost to the taxpayer occurs (again, Ponzi Scheme).

In order to keep costs down, government will be left with little choice but to directly determine what care is and is not provided.

Leftist economist Paul Krugman has admitted as much when he said, "Medicare is going to have to decide what it's going to pay for. And at least for starters, it's going to have to decide which medical procedures are not effective at all and should not be paid for at all. In other words, it should have endorsed the panel that was part of the health care reform."

The basic logic should not have to be spelled out like this because, as the numerous facts I have pointed out show, we are already at the point where they are looking to ration care. They have set up the structure to do so. Calling it "advisory" is Orwellian when that "advise" is AUTOMATICALLY put into law unless unrealistic political checks are met.

It is absurdly naive to assume that simply because the term "advisory" is in the name of the board, the proposals will be advisory in nature, especially as costs continue the inevitable rise these programs guarantee. Again, the naming of the Independent Payment "Advisory" Board is Orwellian and an attempt to mislead. Don't be so easily fooled.

All one needs to do is to look to the history and economic effects of Medicare to see proof of the logic behind this.

Medicare already sets arbitrary reimbursement rates; something it was forbidden to do in the 1965 law. This is simply another example of mission creep.

No one with any economic sense about them can deny the fact that Medicare has created massive moral hazard and driven up costs.

If and when Obamacare goes into full effect, costs will skyrocket as more private insurers are driven from the market. Robert Reich, Peter Orzag and Paul Krugman have already said that we will have to ration care using the system they supported putting in place.

This is not hard to understand (or "opaque") except to those who don't want to understand it.
 
As to the idea that somehow the medical field is unique and can't function as a free market....it functioned that way for most of history.

The "captive demand" argument misses how economies function. There are numerous products/services that are just as inelastic as medical care and still benefit from a more competitive market. It is false to think that "captive" or inelastic demand "does not lend itself to a 'free market' model". Whether or not demand for a product is relatively inelastic is ultimately irrelevant to that; a red herring. You have not given any reason as to why relatively inelastic (or "captive") demand would inhibit a "free market model". The reasons you did give were more an example of supply being limited, which brings me to my next point.

The idea that "one side can set its own prices by limiting the supply" also misses how economies function. The only way supply can be artificially limited long enough to drive up costs is through government interference in the market. Those AMA "cartels" would not be possible unless they were somehow sanctioned by the government.
We have to go very far back to the first meeting of what would become the American Medical Association. This meeting was held in New York City in 1846. Twenty-nine allopathic doctors (MDs) attended the meeting. They wanted to establish a monopoly over health care in the United States for those doctors that practiced higher quality medicine, such as themselves. They felt there were too many different kinds of doctors practicing too many questionable forms of medicine. They wanted only doctors that conformed to their brand of medicine to be allowed to practice. They wished to set up their association as a medical elite and obtain a government-enforced monopoly over health care in the United States.

The following year the AMA was officially launched. Members' efforts were at first slow to yield results. One of their first successes was in getting the exclusive right to positions in the federal government. Then, around 1870, the AMA began to find success at setting up medical boards in each state. The rationale behind these medical boards was twofold.

First, it was assumed that only doctors knew enough about medicine to be able to determine whether a physician was competent. And second, it was felt that doctors accused of misconduct should not be subjected to the public humiliation of an open trial. Typically the AMA would team up with key lawmakers in a state and lobby for legislation to "protect public safety." The idea was that incompetent and unscrupulous doctors were doing great harm to healthcare consumers. There was no proof of this, but it was their claim.

A state consumer protection agency staffed by AMA members was promoted. That is, a state board made up of AMA members would examine applicants who wanted to practice medicine and only license those who were, according to them, competent and morally fit. So each state in turn passed a Medical Practice Act which created a board of medical examiners with police powers to enforce their decisions. It was critical to the AMA's long-range plans that states establish these medical boards.

* * *
...in the United States we have a government-enforced price floor with a free market price ceiling. Thus prices can go up, but not down—which are, of course, exactly what prices for medical services are doing and have been doing for many years. The object of labor unions, trade associations, and the medical monopoly is always to control the floor price. Labor unions generally do this by negotiating contracts with employers, a legitimate activity in a free market. Monopolies, however, are formed when an industry uses government power to enforce a price floor.

[much more can be read at the link above.]
Again, the problem is corporatism, not capitalism. The clear existence of corporatism is not proof that the medical industry is uniquely unfit for a free market. If anything, it highlights the exact opposite. ONLY government has the power of coercion which they often use to favor certain businesses at the expense of others.

The corporatism with the AMA also serves as further proof of how one government failure only serves as a rationale for greater government interference.
 
As an interesting side note, here is a article from that same website talking about Hayek's famous insights regarding knowledge and where it is best utilized. Because it is very relevant to the central question of this thread, I thought I would point it out.
The peculiar character of the problem of a rational medical order is determined precisely by the fact that the knowledge of the circumstances of which patients and physicians must use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate patients and their physicians possess.…

If we can agree that the medical problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the physicians and patients who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization.
The idea of decentralization...is diametrically opposed to the prevailing trend to centralize medical decision making. All those who follow this trend share one thing in common: a false sense of certainty that medical decisions, previously made between the individual patient and his physician, can be better guided by an enlightened set of standardized practices determined by groups of experts (i.e., the Independent Payment Advisory Board).​
 

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