Tag Archives: Health Care

Health Care Laws Should Be Abolished, by Doug Casey

Government is the cause, free markets are the solution for the health care “crisis.” From Doug Casey at caseyresearch.com:

How to reform the U.S. “health care” system is a continuing topic in the news. I put that phrase in quotes because it’s a misnomer. You don’t insure your health – that can’t be done. You can only insure that the costs of medical care, if your health fails, will be covered. Saying “health care” makes people think that someone else will magically assure their health, which is impossible. Collectivists like to use the phrase as part of their continuing war on what words mean, and how people think.

Health is something you do for yourself with proper diet, exercise, and lifestyle decisions. Medical care is something very different; it’s what you need for acute trauma or disease. People want good health, but all insurance can give them is hospitals, doctors, and medicines – all of which are scary.

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The State Is Influencing Big Tech’s “Unpersoning” — Now Imagine If It Takes Over Healthcare, by Tho Bishop

Actually, you don’t have to focus on the government and Big Tech to fear a government take over of health care. Just look at anything the government currently does. From Tho Bishop at mises.org:

As tech executives continue to be grilled in front of Congress, the growing Bernie Sanders-wing of the Democratic Party is preparing to push its misnamed “Medicare for All” into the political mainstream after its political gains in the midterms. While these two stories seem to have very little in common, it’s not difficult to imagine a not-so-distant future where the two are dangerously connected. After all, so long as the scope of government grows, the continued politicization of all aspect of life will follow – the inevitable consequences of which could be quite horrific.

The State’s Shadow over Silicon Valley

First let’s consider some of the overlooked causes behind the increased censorship from Silicon Valley.

While Republican politicians relish in collecting cheap soundbites railing against the censorship practices of widely despised tech executives, few are willing to point out the obvious influence of government in Big Tech’s growing hostility to free speech.

For example, just recently Facebook announced it was following the lead of Tumblr by cracking down on “sexualized content” on its platform. While both decisions were widely ridiculed by users and pundits alike, largely ignored was the role that recent Congressional laws aimed at cracking down on sex trafficking played in sparking the new policy. Similarly, “anti-hate speech” laws from Europe had very real consequences for American social media users as mechanisms designed to police speech oversees are inevitably used to manage content throughout their global communities.

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The Many Ways Governments Create Monopolies, by Mike Holly

Almost all effective monopolies are created, blessed, and sustained by governments. From Mike Holly at mises.org:

Politicians tend to favor authoritarianism over capitalism and monopoly over competition. They have directly created monopolies (and oligopolies) in all major industrial sectors by imposing policies favoring preferred corporations and preferred special interests.

In 2017, University economists Jan De Loecker and Jan Eeckhout found monopolies behind nearly every economic problem. They have slowed economic growth and caused recessions, financial crises and depressions. These monopolies restrict the supply of goods and services so they can inflate prices and profits while also reducing quality. In addition, monopolies have decreased wages for non-monopolists by decreasing the competition for workers. This has led to wealth disparity, underemployment, unemployment and poverty

Monopolies have also led to many societal problems. Unlike truly competitive firms, institutions that enjoy monopoly power have more freedom to discriminate against outsiders, especially women and minorities. They block innovation, the key to long-term prosperity. Monopolies have led to imperialism and wars .

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Health-Care Industry Debt Turns into “Systemic Recession Risk,” by Wolf Richter

With its debts mounting, the health-care industry looks a lot like the oil industry a few years ago. From Wolf Richter at  wolfstreet.com:

Debt binge hits its limit, with big impact on overall economy.

Sector booms and busts have historically been driven by speculation and over-borrowing, often triggering regional or even national recessions. Textbook examples include the 2014 Energy and 2008 Financial sector collapse. In both of these instances, fallacies such as perpetual $100+ oil and ever rising home prices drove rampant speculation, overinvestment, and unsustainable debt buildup.

So warns John Burns Real Estate Consulting, in a new paper, “Industries at Risk and Implications for Housing.”

This time, three sectors stand out where “a similar pattern of unsustainable growth has driven rapid expansion” since the end of the Great Recession: technology, automotive (whose current travails I keep dissecting), and health care.

But health care poses the biggest “systemic recession risk” to the US economy, according to the report. After employment in the sector has soared 113% since 1990, it accounts for 16% of private sector jobs, up from 10% in 1990.

[T]thus a correction to the industry will likely cause a slowdown for the national economy. Several large housing markets have an even bigger concentration of jobs tied to the Health Care industry and will be disproportionately hit by a Health Care slowdown, including: Philadelphia, Boston, New York, and Nashville.

As so many times, it has to do with debt. Health-care sector debt has soared 308% since 2009, the depth of the Great Recession which elegantly bypassed the sector. Over the same period, GDP has grown 30%, and overall jobs have grown only 18%. Thus health-care sector debt has grown 10 times faster than GDP and 17 times faster than private-sector jobs, “exceeding multiples of prior finance and energy sector boom-and-bust cycles.”

To continue reading: Health-Care Industry Debt Turns into “Systemic Recession Risk”

A Fatal Accident Waiting to Happen: U.S. Healthcare, by Charles Hugh Smith

Health care offers a perfect illustration of a familiar cycle: government intervention distorts a market, the government intervenes to “fix” the market and further distorts it, more intervention, more distortion, etc. From Charles Hugh Smith at oftwominds.com:

U.S. healthcare isn’t just an historical accident–it is a fatal accident waiting to happen.

Many of the systems we take for granted are historical accidents. Either based on legacy systems hundreds of years old (higher education) or assembled in a short-term, ad hoc fashion (post-1940 national defense/ national security), these systems have expanded into vast patronage systems that are completely out of touch with 21st century needs, costs or realities.

The U.S. healthcare system was not planned; it is largely accidental.

As Jeff Deist of the Mises Institute and I cover in our recent conversation on The US Healthcare Debacle (21:23) (YouTube version), the system of employers providing healthcare insurance began as a means of offering a bit of extra compensation in the 1940s era of wage/price controls.

This historical accident is at the heart of the current system’s dysfunction. Those without jobs are covered by the government at horrendous expense, and those with coverage are terrified of risking it by moving to less secure employment or self-employment: The New Shackle of Serfdom: Clinging to Healthcare Insurance (September 22, 2015).

By removing the consumer from the equation, pricing is now purposefully opaque. The cost for a test or procedure is all over the map, and insurers have few incentives to demand truly transparent pricing.

Meanwhile, the federal/state healthcare programs of Medicare and Medicaid are riddled with the same lack of transparency and are vulnerable to fraud, over-billing and paying for needless tests, medications and procedures.

Few seem to know that the cost of these two behemoth programs exceeds the Pentagon’s budget.

This contraption of private insurance paid by employers, co-pays paid by employees and state programs guarantees paperwork consumes an estimated 40% of all healthcare expenditures. How is that for inefficiency and needless expense?

To continue reading: A Fatal Accident Waiting to Happen

Being Healthy Is Unprofitables, by Charles Hugh Smith

America’s health care spending is breaking the bank. From Charles Hugh Smith at oftwominds.com:

That good health is insanely unprofitable was highlighted by a staggering statistic in the recent research paper The Concentration of Health Care Spending (via B.C.):

Mean annual spending for the bottom half of (the American population) distribution was just $236 per person, totaling only $36 billion for the entire group of more than 150 million people.

We don’t know why the 150 million people did not consume much in the way of “health services”– they might have been healthy and had no need for healthcare beyond routine tests, or they might have needed care and been unable to afford it, despite the Orwellian-titled Affordable Care Act (ACA).

But let’s assume that the 150 million people–roughly half of America’s 317 million residents–were healthy and had no need for health services beyond minimal prevention and a few low-cost tests.

The total cost of their care was $36 billion–just over 1% of the nation’s $3.2 trillion bill for healthcare and healthcare insurance. Let’s assume that 90% of the populace was healthy, and the remaining 10% were very ill and needed 100 times as much care as the healthy.

The total cost of caring for the 285 million healthy people would be roughly $67 billion, or just over 2% of the $3 trillion we currently spend on healthcare. The very ill 32 million would need $23,600 each, or $755 billion.

The total cost for a largely healthy population and 32 million ill people who required 100 times more care than the healthy would be $822 billion, or roughly 25% of the $3.2 trillion we currently spend annually.

Here is an example of the insanity of U.S. healthcare costs. One of our European friends was doing post-doctorate research at a major U.S. university. His son suffered a minor burn in the kitchen, and on the doctor’s recommendation, the parents took the toddler to a hospital a few days later to have the dressing–basically a piece of gauze taped over the burn–changed.
Naive to the absurdities and costs of U.S. healthcare, the parents followed these instructions rather than just changing the gauze themselves.

Their punishment for foolishly asking the medical establishment to spend 5 minutes changing a small piece of gauze: a bill for $875. The list of similar charges is equally absurd. Among those known to me first-hand: $120,000 for a few days in a hospital, no operation, not intensive care; $6,000 for 20 minutes sitting in an observation room after a minor outpatient surgery on the patient’s big toe–the list is essentially endless.

To continue reading: Being Healthy Is Unprofitable