'Lowering Health Care Costs' Is Not What Americans Need

Energy and Commerce committee chairperson Cathy McMorris Rodgers (R-Wash.) just announced (April 26, 2023) her committee's intent to "lower health care costs ... [because it] is the right thing for patients."  In fact, it is precisely the wrong thing to do.  By lowering health care (medical) costs, Congress is hurting all Americans.

Both theory and experience prove this.

When the feds lower the "cost" of anything, they simply reduce the payment.  Regardless of the price set by the producer of a good or service, Washington says it will pay a predetermined lesser amount.  That amount has no relationship to the producer's actual cost to produce, much less the expense of investing in research for new products or services.  When payments are decided by government fiat, rather than by millions of consumers in a free market, quality goes down, and there are shortages.  Producers cut their costs substituting cheaper components and untrained labor to meet the price set by Washington.  Those who cannot simply go out of business, and many do.  The number of producers shrinks, leaving a small number of low-quality suppliers who produce an insufficient volume of goods and services. 

The reason there were long lines of people waiting for "free" toilet paper in the USSR and why people today in Venezuela wait in line to carry home drinking water is the same: their economies are centrally controlled rather than market-based.  Government sets payments. The incentive to produce high-quality, large amounts of anything is missing. 

As has been proven over and over, the free market is best way to produce the most goods and services of the highest quality at the lowest cost to consumers.  When free market forces are suppressed by central economic control — when Congress fixes health care — you get Russia, North Korea, and Venezuela.  But you don't have to leave the U.S. to see this. It is already happening here. 

Clearly, there is a shortage of physician services.  Patients experience this shortage by long wait times.  Before the ACA, average maximum wait time to see a primary physician was a medically dangerous 99 days.  After Obamacare expanded Medicaid and paid for it by reduced payments to physicians, wait time increased to 122 days. 

Medicaid's new fix for the shortage of home health workers claims to offer accountability and transparency, but even lower payments to providers. Patients' wait times for care could become years instead of months. 

When government sets a low price (payment), you get shortages and death by queue.  When government sets a high price to get the product it wants fast, you get mRNA COVID vaccines.  Washington and complicit media have downplayed and even suppressed the medical consequences of central economic control of health care.

Big Pharma failed to do the necessary research on mRNA safety and efficacy in their rush to satisfy Washington and deploy the COVID vaccines.  Quality control was dangerously substandard.  Benefits of the vaccine were exaggerated, and medical injuries were downplayed, even hidden.  Data have slowly come out that vaccines do more harm than good and can even cause death.  As for boosters, they magnify the medical danger of mRNA vaccines.

All of this medical harm inflicted on Americans can be attributed to Washington's economic control that rushed to vaccinate the entire population against a purported existential COVID risk that in fact was a scam.

Suppose consumers in a free market were the decision-makers instead of Washington.  They would have asked for the multiple sources of safety and efficacy data before taking a never-before-deployed technology into their bodies.  When people learn there are no long-term data at all, most people would have said, "I'll wait until I am sure this stuff is safe and works.  I'm not injecting myself with unknown drugs, and certainly not my children!"

When the government controls payments, patients suffer, whether the fixed price (payment) is low or high.  If payments are too low, you get inferior products and long waits for service.  Furthermore, with low payments, pharmaceutical and other for-profit care suppliers do not have the capital to invest in research and development.  The medical cures of the future will never materialize. 

When government's fixed payments are too high, you get what happened with COVID vaccines: rushed, untested, unsafe, dangerous, even harmful medicines or devices forced on the population. 

Finally, lowering health care costs by fiat requires even more bureaucracy and administration with its attendant costs.  Estimates of government expenditures on its no-value-to-patients regulatory activities ranges from 31 percent to more than 50 percent of all U.S. healthcare spending.  The cost of regulating (lowering) care payments takes money away from patient care and spends even more on a healthcare system American taxpayers cannot afford

When Chairperson McMorris plans to lower health care costs, she unknowingly does a disservice to the very people she is sworn to serve. 

Deane Waldman, M.D., MBA is professor emeritus of pediatrics, pathology, and decision science; former director of the Center for Healthcare Policy at Texas Public Policy Foundation; and author of the multi-award-winning book Curing the Cancer in U.S. HealthcareStatesCare and Market-Based Medicine.

Image via Pixabay.

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