Why Medical Price Controls Are A Terrible Idea

Barb Wire

“In the torrent of information which deluges the public,” Phillips Gausewitz, MD, writes at The Federalist, “the problem of price controls is scarcely mentioned because most writers in the medical policy community belong to a small group of academics, social scientists, economists and members of think tanks whose interests and expertise are in the financial rather than the medical aspects of healthcare. They lack the real life experience to appreciate the effects of their recommendations on practicing physicians and their patients…”

That sounds exactly like the problem in so many other areas of public policy. Pointy-headed “intellectuals” dream, inspire legislation that gets passed, and the public is left to suffer why trying to repeal and clean up the mess after.

Dr. Gausewitz also writes:

The consensus is that our medical care system is very sick. A logical way to approach it is as a competent physician would a patient suffering from a slow growing malignancy. First we must be sure that we do not make the condition worse, by following the ancient medical maxim: “First, Do No Harm.”

Government actions in the healthcare field have not only consistently violated this, but actually are the cause of the disease they purport to cure. Unlike the government, our doctor, before starting treatment, would review the history of the disease to make an accurate diagnosis from which a practical and purposeful treatment plan could be implemented.

We are watching history repeat itself with one-sixth of the American economy and Obamacare, which some misguided Republicans believe is here to stay. Here are three more short excerpts from the article…

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By Phillips Gausewitz, MD

[T]he Federal Government’s planned and inadvertent actions have resulted in the disease of our health care system. This happened in several stages starting with World War II price controls which encouraged employer paid insurance and third party payment.

Third party payment insulated patients from the cost of coverage as well as the cost of the care they consumed. They didn’t even see their bills as doctors and hospitals billed the insurance companies or the government directly. Employees didn’t realize that their insurance benefit was off set by lower pay and came to believe that their medical care cost very little leading to over utilization. We developed a payment system in which, because patients had no concern about costs, neither did doctors, hospitals, insurers, regulators and politicians. No wonder prices kept rising.

There is general agreement amongst economists that if price controls succeed in keeping prices below the normal market level they result in increased demand, shortages, lower quality, and black markets. They are particularly destructive in Medical Care where, in addition to economic problems, they result in needless suffering and death.

Read more: The Federalist

The opinions expressed by columnists are their own and do not necessarily represent the views of Barb Wire.

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