“As with the Connecticut parking spaces, we have through the entitlements (and through the tax preferences given to employer-based medical benefits) done a great deal to encourage the consumption of health-care services while doing nothing to encourage the production of them. In fact, various political efforts at health-care reform going back decades have made it less profitable, less prestigious, and less enjoyable to be a doctor, with the result that our best and brightest no longer even consider medicine to the extent that they once did, preferring jobs in finance. About one in four U.S. doctors today is an immigrant, meaning that without high levels of immigration the number of medical professionals would be nosediving relative to the population. Life as an American doctor looks pretty good to a recent med school graduate in Bombay or Karachi, but not to a Harvard-bound valedictorian at an American high school. But even with immigration, the number of physicians in many specialties has stagnated, and new policies in the PPACA, such as punitive taxes on manufacturers of medical devices, will contribute toward stagnation in other sectors of the health-care industry if they are enacted.
“And while there is some concern nationally about the number of doctors in the general profession, there is acute concern about the number of doctors who are willing to see patients enrolled in Medicare, Medicaid, and other government-run programs. Medicare ends up being a great deal on insurance to pay doctors who will refuse to see you. Medicaid is of course even worse: The quality of the doctors and institutions that will take Medicaid patients is so low that they have worse health outcomes than do those with no insurance or coverage at all. Subsidizing consumption of a good does not necessarily ensure that production will keep up with demand; it merely replaces the most efficient and fair form of rationing (market pricing) with inefficient and politically biased forms of rationing. Even before the passage of the PPACA, about half of all health-care spending in the United States was government money. (For that reason, if for none other, the conservatives’ cries of “socialized medicine” during the PPACA debate were odd.) New Deal policies that tied workers to employer-based insurance programs, and later policies such as the creation of the HMO simply resulted in the rationing duty being handed off to insurance companies, as they no doubt will continue to be under the PPACA, should the program survive.”
“What happens when you subsidize consumption rather than production? Understanding that is key to understanding the entitlement problem.”
Excerpt From: Kevin D. Williamson. “The End Is Near and It’s Going to Be Awesome.” HarperCollins, 2013-05-01. iBooks.
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