Monday, September 29, 2003

Rights and Reason: The Real Costs of Healthcare

Today's Wall Street Journal reports health care costs are expected to rise 12% for businesses that provide coverage for their employees. This would be the fifth consecutive year of double-digit percentage increases. This year costs rose an average of 16%.

Jim Foreman, managing director of Towers Perrin, the consulting firm that produced the survey, noted that employers' were facing added strains of providing health benefits in a bad economy because "[t]here's no way you can pass these costs on to customers." And therein lies the problem. Most of American healthcare financing policy is now based on the axiom "the consumer must never pay market value". Federal policymakers have gone to great lengths to install smoke and mirrors throughout the healthcare system to hide the true costs from consumers. Employers are given tax breaks to provide healthcare coverage, something which is not inherent to the employer-employee relationship. The FTC and DOJ prosecute doctors that try to protect the erosion of their incomes by government-sponsored managed care companies. The managed care firms, in turn, acclimate the consumer population to paying more for an inferior level of service. And all the while, political leaders are looking for ways to further mask consumer costs--exhibit A being the ongoing effort to provide government-sponsored prescription drug benefits.

Major labor unions--which enjoy cartel protections under federal law--firmly oppose any effort by employers to shift the cost of healthcare back to consumers. This is not just a matter of short-term practicality, but of long-term ideology: the AFL-CIO backs government-run socialized healthcare, and the best way to get that is by driving employers to the brink of financial ruin over healthcare costs. That way big business will be clamoring for socialized medicine just to get the cost monkey of their backs. This is why, for instance, many larger corporations have thwarted efforts to give physicians an antitrust exemption . Corporate America will condemn physicians to serfdom rather than take a principled stand for free markets.

No comments: