Obamacare “Will” Distort Health Care?!

Expensive health care concept caduceus on US money

The silliness that makes you smiley in the morning…

President Barack Obama and his fellow Democrats sold many Americans on the Affordable Care Act largely by emphasizing two arguments: The law would help to reduce overall health-care costs, and it would provide health insurance to those who, for financial or health reasons, cannot get it now.

Unfortunately, both of these arguments are flawed. The law creates market distortions that will significantly raise premiums and costs for many Americans — including some middle- income families. And there are less costly, less distortionary and less intrusive ways to address the problem of the uninsured.

The “problem” of the uninsured?  You mean the “problem” that medical cartels, in concert with the government created out of whole cloth and now proposes to “save” us from?

Who is this clown?  Oh yeah, here we are:

(Lanhee Chen is a Bloomberg View columnist and a research fellow at the Hoover Institution at Stanford University. He was the policy director of Mitt Romney’s 2012 presidential campaign. The opinions expressed are his own.)

Oh, that explains it.  Romneycare and all.

Let me give you just one example — a relatively common chemotherapy drug.  I won’t name the drug as it might expose my source, but those in the practice of medicine are well-aware of the truth in this regard.

It has a cost including a market profit of about $30/dose.  You can’t buy it in the United States for under $100, however.  As a patient you will likely pay 50% to 500% more in a clinic or hospital for that drug.

If you go to one of the nations where it is produced, however, you can buy it over the counter for $30.

So why does it cost $150-500 in the United States?

Because drug makers colluded with the US Government to make it a crime to buy that drug in some other nation and then bring it into the United States and sell it for whatever you wish to sell it for.  You must have a valid prescription to possess it at all and since that prescription must be for your personal use possession for any other purpose without explicit government permission (such as, for example, arbitrage of price between a high and low priced location) is a criminal offense for which you can be (and will be) prosecuted and imprisoned.

Or so the “business” argument goes.

Look at Wylie’s recent loss at the US Supreme Court, and the arguments raised by publishing associations.  Specifically, this argument:

The potential longterm damage is not exclusive to publishers. It would have devastating consequences for authors, publishing industry employees and businesses directly supported by the industry, retailers, students and educators. Some examples of the damage:

Authors would be deprived of their rightful compensation because the royalties they receive from foreign versions of books, to the extent they are able to receive them, are typically lower than the royalties from US editions. The prospect of diminished earnings is likely to make academic authors and publishers less willing to engage in the labor-intensive process to create textbooks. The availability, quality and diversity of these critical educational tools would undoubtedly suffer.

It could affect high-quality, highly-educated US jobs which contribute millions to the economy in tax revenue.

Wait a second.  Why is the royalty lower for works sold in a foreign nation?

Note that the issue at hand here is not counterfeit goods.  It is that Wylie caused to be printed authorized editions of these books in another country, someone bought them there and shipped them here where they sold them for less money than Wylie would have liked.

The key point is that the seller legally purchased and owned the goods in question.

The US Supreme Court has ruled on this case and upheld the reimportation and resale of lawfully acquired copies of the books; it said in justification (in part) for its ruling:

A law that permits a copyright holder to control the resale or other disposition of a chattel once sold is similarly “against Trade and Traffi[c], and bargaining and contracting.” Ibid. With these last few words, Coke emphasizes the im­portance of leaving buyers of goods free to compete with each other when reselling or otherwise disposing of those goods. American law too has generally thought that com­petition, including freedom to resell, can work to the ad­vantage of the consumer.

Except, of course, when it comes to anything having to do with the medical industry.

The argument is often raised that trade in counterfeit goods could do severe harm to a consumer (e.g. adulterated drugs.)  But nothing has been said about allowing trade incounterfeits.  In fact that’s already separately illegal and adulterating drugs or tampering with devices is a separate and serious criminal offense.

No, what’s been granted to this “industry” is a means to violate the Sherman Act, 15 USC.  This act provides the following:

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

Every person.

This sort of cartel behavior is, by the black-letter law above, illegal in virtually all lines of business. Had I attempted to conspire to do that sort of thing when I ran my Internet company I would have gone to prison — and justly so.

But of course there are “exceptions”, and those “exceptions” were granted by Congress under lobbying pressure from the medical industry.

So we have CON laws (which make legal otherwise felonious activity), we have reimportation laws (which make felonies out of what is described above as ordinary commerce) and we have specially granted exceptions riddled throughout the law that give the privilege of violating the black-letter felony statute found in 15 USC to various actors in the health care sector.

These actors use that privilege in spades, and as a consequence there is a problem of uninsured people that is created out of whole cloth by the outright prohibition of competition between sellers of goods and services which result in a factual price difference of, for example, a $100 scorpion antivenom manufactured in Mexico (and available there at that price) being sold in the United States in a hospital for nearly $40,000.

Then, having created a circumstance where most people who do not have “insurance” would be instantly bankrupted by a need for such antivenom (especially if you need two shots, which is the usual course of treatment!) or at least severely harmed (having to pay nearly $100,000 for $200 worth of drug) the political class now exploits this to talk about how we must “solve” the problem of people being uninsured when they created the problem of ridiculous pricing and thus the original “need” out of whole cloth!


The solution to this problem is not found in Obamacare, Romneycare or anything similar.

It is to return to the Rule of Law, pulling all of these protections from this so-called “industry”, resulting in free and open competition — that is, to restore the underlying and essential right of property that vests when one lawfully acquires a thing in voluntary trade.

Applying the same Rule of Law found in 15 USC to the providers of medical services so as to imprison those who attempt to or do manipulate the market to restrain trade and elevate price in things such as diagnostic imaging and other procedures, along with restoring the rule of law in 15 USC to medical goods and services of all sorts, would cause the price of medical goods and services to instantly collapse and thus render the argument of “need” for insurance moot for virtually all cases.

Oh yes, there still would be a demand and market for medically-related insurance.  But even for those events, such as cancer or catastrophic injury, the price would be a tiny fraction of what it is now and thus would be affordable in a free market environment for virtually everyone.

Even currently-catastrophic chronic conditions, such as HIV, would have the cost of treatment collapse to affordable levels for most persons.  A fall in the price of these treatment regimes by 80-90% would immediately occur.

Consider that if you took the free-market price of an uncomplicated childbirth including doctor and anesthesiologist billing (e.g. the epidural), an utterly routine procedure that occurs millions of times a year, from 1963 and inflated it by the CPI to today, you would be able to have an uncomplicated birth in a hospital including three nights stay for just under $1,000.

Back in 1963 medicine was mostly a free-market enterprise and the sort of jackbooted legal environment that has resulted in the financial rape of our nation did not exist.  Today it does, and as a result the typical price of that uncomplicated birth is ten times the CPI-inflated 1963 price.

Most people, even very poor people, can come up with $1,000 when they have nine months to do so.  That’s about $100/month, or less than most “poor” people in this country spend on beer, cigarettes or both in a given month.  It is clearly affordable to just about anyone and thus requires no “insurance” to cover it.

There is no solution to be found in yet more government privilege for the Health “Industry.”  We can only resolve this problem by tearing down the special privileges and exceptions to long-standing law that this so-called “industry” has garnered for themselves, reducing its impact on our economy and eliminating the outrageous distortions and financial rapes that it inflicts on the American consumer.

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