Wednesday, January 22, 2014

Cost of Healthcare: ObamaCare Supporters Drop the Context to Support Their Case

A correspondent, pem59, recently responded to Jonathan Grotz (letter: No conservative plan) with:

    Jonathan Grotz,
    "What is his alternative?"
    I have the same question for those who criticize the Affordable Care Act. We spend twice as much per capita [sic] on Healthcare as the rest of the developed world and our costs have been increasing faster than the rest of the world. This is unsustainable - sooner or later it wil [sic] catch up with us.

This is a classic case of what Ayn Rand called context-dropping. As Leonard Peikoff explains: "Whenever you tear an idea from its context and treat it as though it were a self-sufficient, independent item, you invalidate the thought process involved. If you omit the context, or even a crucial aspect of it, then no matter what you say it will not be valid . . . . A context-dropper forgets or evades any wider context. He stares at only one element, and he thinks, 'I can change just this one point, and everything else will remain the same.'" pem59 views the rising cost of healthcare in snapshot fashion, ignoring the context of history and cause and effect.

I left this reply:

Unsustainable?: Yes, which is exactly why the ACA is not an alternative. It is the government that caused the runaway costs in the first place. The solution is not to reward the culprit with wider powers.

As any good basic economics textbook, history, and personal experience will tell you, when you separate the consumer from the responsibility to pay, you get runaway costs.

Today Americans spend nearly 20% of GDP on healthcare, about $9,000 for every man, woman, and child. When you consider that nearly 90% of that spending is by 3rd parties—socialist programs like Medicare and Medicaid and the government-instigated, semi-socialist, quasi-private "insurance" system—is it any wonder that healthcare costs are "out of control?" It's because payment is out of the consumer's control.

Health care cost is a "national issue" only because the government has assumed control, either directly or indirectly, of spending Americans' healthcare dollars. But logically, rightfully, and morally, paying for healthcare is an individual, not "societal", responsibility, which each individual and family must deal with and plan for in his own way.

The alternative to the pre- and post-ObamaCare system?—End the 3rd party payer system and leave that 90% in the hands of the productive Americans who earned it, and remove government controls on the healthcare industry so consumers are free to engage in voluntary, mutually beneficial contractual relationships with providers and/or insurers. The incentives inherent in a free market—producers striving to expand sales in order to maximize profits, and consumers striving to get the most for their money—will take over, leading inexorably to rising quality and falling costs over time, as the history and theory of free markets prove.

As to the rest of the world: Setting aside the questionable statistical measures, socialized countries "hold down costs" by rationing care; i.e., by death panel. The choice Americans face is self-responsibility for healthcare or submit to death panel care. When you give up responsibility to pay, you give up control over that aspect of your life.

Related Reading:
Before ObamaCare Fiasco: Problems Caused by Government

The Answer to "Our Uncontrolled Healthcare Expenditures" is Free Market, Not Single Payer, Health Care

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