Monday, March 22, 2010

The Health Care Vote, One giant Step for Medical Central Planning

The partisan vote on the Obama-Pelosi healthcare bill was, to borrow an out of space analogy, one small step for health care, one giant step for universal health care coverage.

Two of Connecticut’s U.S. House Reps. secure in their sinecures -- John Larson of the impregnable 1st District and Rosa DeLauro of the 3rd District, both Democratic bastions -- sensed as much as the vote drew to a close.

DeLauro was especially ebullient, jumping up and down, flashing that world conquering smile of her’s, her noggin spinning with the heady perfume of victory. Larson, about to burst into song – Happy Days Are Hear Again – contended himself with “We are happy warriors!”

President Barrack Obama and his Chicago gang – one of whom is shown above in a suggestive pose – watched the vote countdown from the Roosevelt Room in the White House. When the vote total hit 216, there were, according to propaganda chief Robert Gibbs, "cheers and clapping ... high five for Rahm, hugs all around."

The measure passed by means of a legislative gerrymander in which the senate bill was routed through the House, accompanied by amendments to “fix” the senate bill and then signed into law by the president. Notable holdouts such as Bart Stupack and his handful of abortion conscious congressmen were bought off by assurances from the White House that abortion funding would not find its way into the final product. He would be advised not to bet the House on it.

Republicans gnashed their teeth, certain that the political jihad would lead, eventually, to a Republican resurgence at the polls. They may be right. The content of the bill, as well as the Democrat's inattention to proper protocol and constitutional niceties very well may permanently alienate an aggressive opposition.

In Connecticut, Republicans were not mute. Sam Caliguri, who along with Justin Bernier is vying for Chris Murphy's seat in the 5th U.S. House District, immediately challenged Murphy to a mano a mano debate on the virtues of the Pelosi-Obama health care bill. Connecticut’s congressional delegation, solidly Democratic, voted in lockstep in favor of the bill.

The most serious objection to health care central planning will not fit on a bumper sticker.

In a free market, individuals who make their own spending choices reveal the aggregate value they place on goods and services. Markets draw on this critical mass composed of individuals spending their own money to allocate resources productively and efficiently.

In government controlled markets, agents of the state decide which goods and services are to be purchased and at what price. In such an allocation system, aggregate individual price signals are missing, and because of this, central planners cannot know what consumers value most. It does not matter in the least what the product or service is, whether it be widgets or health care.

Health care planners will insist they can use cost benefit or comparative effective analysis to determine what patients should receive which treatments. In any economic transaction, someone must determine which product or service is worth paying for. When central planners pick up the tab, market allocations are distorted. Seeking to provide all benefits to all patients – or, in the health care utopia envisioned by legislators who enthusiastically voted for a trimmed back version of Obamacare, moving resources from each according to his means to each according to his needs – central planners usually end up bankrupting the public treasury.

The Obama administration plans to address these allocation difficulties though a clumsy Patient-Centered Outcomes Research Institute and a Medicare Committee founded on the astoundingly absurd premise that every patient is average. In the central planning model, analysis takes the place aggregate individual price signals, and the distribution is made not by buyers and sellers in the market but by proficiency experts – very proficient in capturing monetary resources and far less efficient in allocating goods and services.

The central premise of the central planner is deficient. In health care, clinical research supporting allocation decisions is conducted on patients who are as much alike as possible; but in the real world, outside research institutes and Medicaid committees, patients respond differently to different treatments.

In the short run, patients serviced by number crunching bureaucrats will not receive appropriate treatments. In the long run, expenditures determined by bureaucrats will fatally distort medical innovation, because research and development activities will no loner be responsive to individual price signals generated by a free market but only to “needs” deemed appropriate for the median voter by highly politicized superintending governmental agencies.

These objections will not make DeLauro less effervescent or Larson, before entering public service the co-owner of an insurance agency in a state that used to be called the insurance capital of the world, less of a bantam rooster spouting campaign talking points.
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