How Government Killed the Medical Profession | Cato Institute

Command and Control


Coding was one of the earliest manifestations of the cancer consuming the medical profession, but the disease is much more broad-based and systemic. The root of the problem is that patients are not payers. Through myriad tax and regulatory policies adopted on the federal and state level, the system rarely sees a direct interaction between a consumer and a provider of a health care good or service. Instead, a third party—either a private insurance company or a government payer, such as Medicare or Medicaid—covers almost all the costs. According to the National Center for Policy Analysis, on average, the consumer pays only 12 percent of the total health care bill directly out of pocket. There is no incentive, through a market system with transparent prices, for either the provider or the consumer to be cost-effective.

healthcareAs the third party payment system led health care costs to escalate, the people footing the bill have attempted to rein in costs with yet more command-and-control solutions. In the 1990s, private insurance carriers did this through a form of health plan called a health maintenance organization, or HMO. Strict oversight, rationing, and practice protocols were imposed on both physicians and patients. Both groups protested loudly. Eventually, most of these top-down regulations were set aside, and many HMOs were watered down into little more than expensive prepaid health plans.

via How Government Killed the Medical Profession | Cato Institute.

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