From the Forbes’s article which attempts to persuade us that Obamacare really is chock full of puppy dogs and sunshine just as Obama promised:
Failure on the part of insurers to meet this requirement will result in the insurers having to send their customers a rebate check representing the amount in which they underspend on actual medical care.
That sounds all well and good until you stop and think about it. Who decides what constitutes “underspending”? Ultimately, under Obamacare, prices will be driven up through inflation as outrageous hospital bills are presented as evidence along with insurance companies’s counter-proposals that they are “underspending”.
A concrete example of this would be my recent experience my fourth child’s birth.
By the fourth child you pretty much know what’s going on and, barring any complications, things generally tend to go like clockwork. Well thankfully that’s pretty much what happened in our case. Biologically the birth was seamless, labor for about 2 hours, 3 pushes, and we welcome our son into the world.
So what could I possibly say about an uninteresting birth to show how Obamacare is such a terrible idea?
Enter the nurses.
When we arrived at the hospital we were taken to the prep room where my wife was to change into a hospital gown, get checked, and wait for the room to be prepared for us. It took my wife about 5 minutes to get prepared and it was apparently somewhat of a slow day so rooms were available and already prepped. But it still took us about 30 minutes to get into one. Why? Apparently there are new regulations which call for the nurses to play 20 questions with the mother-to-be before she can be admitted into a room. This process took so long that the mid-wife, who is not considered a medical professional by the way, decided to cut in and actually check how far along my wife was. I’m glad she did, too, because my wife was basically ready to deliver right then.
We were quickly whisked into a delivery room where the nurse playing 20 questions was joined by a team of nurses whose primary focus was to give my wife an IV because she had tested positive for strep and according to their regulations the mother needed to have at least two doses of an antibiotic before giving birth, a process which they expected to take about 20 minutes. Keep in mind at this point my wife was completely ready, biologically, to give birth.
This IV was so important to the hospital staff that they called in at least 4 different nurses to try and find a vein. After the fourth my wife finally told them she couldn’t hold back anymore and would push whether they liked it or not. I passed the last nurse who had tried to give my wife the IV in the hall later and overheard her complaining to the head nurse about how she didn’t want to get written up because procedures hadn’t been followed to the letter. So all the nurses run out into the hall way to discuss the situation and how to reconcile what is happening in the delivery room to their procedures, leaving us alone with only the midwife in the room.
And that’s how we welcomed my 3rd son into the world. With the medical professionals debating their procedures in the hallway while the non-medical professionals, unencumbered by a sense of obligation to follow procedure or the threat of the loss of our jobs if we failed to follow that procedure, got the job done.
The following morning my wife was cleared to leave by her doctor about 12 hours after giving birth but the nurses wouldn’t let her go until she had been there a minimum of 24 hours because, once again, procedure had to be followed.
Two weeks later we received the bills from the hospital. All told the hospital is charging about $14,000 for about 12 hours worth of work and since its itemized we get to see that my wife was given an $11 aspirin (single pill) and my son was given a $6 passifier (we bought a two-pack of the same passifier from a store for less than $4). Thankfully we won’t have to pay the full $14,000+ bill. My employer has graciously provided me with an insurance plan I had no say in and that plan is supposed to help deflate the bill somewhat. By how much we don’t know yet, hopefully it won’t be more than what we budgeted.
And that brings be back to why the bomb the Forbes article tries to tell us is actually a good thing is not, in fact, a good thing.
You see, the insurance company is rightly going to counter the hospital’s outrageous bill with a statement of how much they think it should be and they will base their percentage of coverage on that. Under Obamacare it seems the insurance company will simply be forced to pay whatever magic numbers the bean counters at the hospital dream up. In other words, we will be moving from a badly damaged pseudo-market system to a completely centrally controlled one where the prices charged have absolutely no relation to the real world at all. The hospital can charge thousands of dollars for an aspirin and under Obamacare insurance companies will be forced to pay every cent either then or later after the customer has been stuck with the bill. Either way the result is the same, the cost of medical care will skyrocket because of their government-granted monopoly.
Of course that’s not the only change that will take place. The other part of Obamacare is, as the Forbes article rightly notes, the destruction of any “for-profit” insurance company. Meaning the only insurers who will be able to survive such lunacy are insurance companies that don’t have to operate according to the virtuous system of profit and loss. It is, as was noted before Obamacare passed, the perfect scenario for sneaking in through the backdoor a universal healthcare system.
Now you might be thinking at this point that free healthcare for everyone sounds like a great idea. But there are two catches to that notion.
One is the simple fact that nothing is free. Defenders of other socialized healthcare systems like to point to how their cost of medical care is cheaper than ours. But if the cost of medical care is fixed by the state then such a claim makes no sense since it cannot be objectively compared to anything else. Remember that $11 aspirin? We only know that such a price is outrageous because we have a much more free market outside the hospital which currently charges as little as .0001 cents per pill.1 If the prices were fixed, as they were during World War II for many goods, we simply have no way to know whether we are being over or under charged.2
The other is that the further you remove the good or service provider from the person paying for the good or service, the less of an incentive the provider has for making sure what they are providing is worthwhile to the consumer. The insistence of the nurses to follow procedure rather than attend to the actual medical need highlights this point.
As I said in a discussion on this topic on Facebook:
It would help to drive costs down if I were the one paying for my care, even if I leveraged an insurance company who is my client and not my employers’, and if I were the one who got to determine my care, instead of merely accepting whatever the doctors and nurses dictated to me.
The answer to our healthcare problem is not more intervention. Its freedom.