Government Price Controls and the Willfully Blind

Kevin, MD links to a post at Movin’ Meat, in which Shadowfax provides a (reasonably accurate) description of the perverse reimbursement system facing ER physicians, including the following breakdown of payment rates by payer:

Bill Gates (cash customer): $474
Commercial insurance: $220-400
Medicare: $161
Medicaid: $90
Typical “cash customer” (aka uninsured) $25

Unfortunately, he fails to absorb the blindingly obvious implications of his own analysis. Indeed, he doesn’t bother to diagnose the disease at all. Instead, he maunders for a few lines about “cost-shifting” and then lurches to the following non sequitur:

Yet some people think that a universal health plan would be a bad thing. Some people think it would be too expensive. Some people think that the ‘market’ will come up with a solution. Of course, these are by and large the same folks who thought invading Iraq would be a great idea.

The disease isn’t “cost-shifting,” the absence of a “universal health plan,” or “invading Iraq” (is it really necessary to shoehorn this issue into every discussion?). The disease is government-imposed price controls.

If the Medicare and Medicaid reimbursement rates that Shadowfax laments were not absurdly low, there would be no need for insurance companies to subsidize government-insured patients. This, in turn, would lower premiums and reduce the number of uninsured patients.

I hope, for the sake of his patients, Shadowfax approaches his medical practice with more intellectual rigor than he has applied to his analysis of reimbursement.

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