The Ethics of Cost Shifting as Related to Liberty and Freedom

The current driver at the heart of the health care issue today is the ethics behind cost shifting behavior. To understand this we must first look at the definition of 'cost shifting'. "Cost Shifting is the moving of the costs of services or goods from the person who actually incurred the costs to another person or entity that is in a better position to pay those costs". This is also known as the Robin Hood effect and it frequently occurs in the health care industry and other government regulated industries.

The statement that the President has repeatedly made regarding "bending the cost curve" illustrates that they (liberals in power) just do not understand that the government's lower than market payments for health services have caused the very problem of cost shifting in regards to pricing. In other words, the government has caused the runaway inflation in health care costs. The under payments within all government run insurance systems (Medicare, Medicaid, SCHIP, and others) are exactly what has driven up health care costs. Government has caused the spiraling health care costs!

Let's take a look at the Massachusetts system as an example of what our government is determined to foist upon us all. Since it instituted the "universal coverage" system that covers everyone in Massachusetts, the cost of private insurance has fallen steadily. In and of itself, that is a good thing, but during the same period, payments from Medicare and Medicaid have also fallen. The reduced market power of hospitals as a result of the system structure has produced an inability for providers to shift costs, along with a corresponding precipitous dip in profit margins^[1]. This situation has caused the providers to either lower the standards of care in order to maintain profitability (viability as an entity in the communities that they serve is dependent upon showing a profit), or file for bankruptcy, or simply close the doors and go out of business. So the wonderful system of Romneycare for everyone is driving up unemployment as clinics either fold or leave the state for better economies elsewhere. This type of invasive government intrusion into any market has this effect as a predictable outcome. The outcome will not be any different if our Federal Government attempts this same scheme.

And it was recently reported that the Massachusetts government was proposing to drop over 30,000 legal immigrants in order to cut costs because of a serious shortfall in funding for the program! Is this what we really want for the entire United States?

While the employer based system certainly has a few minor flaws, it is by far a better framework within which appropriate cost shifting can occur. Cost shifting enables our system to treat individuals who have no insurance, or who are under-insured to receive prompt medical treatment. Could our system be tweaked to help contain spiraling costs for the "haves"; yes. Does it need to be totally redone to accomplish this; no.

As Ronald Wilson Reagan said, "More government is not the answer, because government is the problem". There are simpler ways to affect the changes that would be welcomed by everyone. Legislation to allow individuals and small companies to pool risk, portability of policies, tax credits for those who are below the poverty level. Modification of the laws regarding how health care savings accounts are administered and treated for tax purposes (allow year over year rollover of unused funds tax free rather than the current forfeiture scheme). Tax incentives for employers to contribute to employees individual HSA's. Modification of the McCarran-Ferguson ACT of 1945 to allow for interstate sales of health insurance policies which would foster real competition within the industry nationwide and therefore drive down costs. Allow for temporary coverage for transients (those between jobs not of their own volition).

Would any of these solutions have a deleterious affect on cost shifting? certainly, but in a positive way for all! None of those methods mentioned above would drive the level of care down as has happened in Massachusetts. The real question at the heart of the issue; "is cost shifting ethical?" Yes it is. it is the most fair system that has ever been devised. It automatically maintains a high level of care for all participants. Whereas the system that congress is considering would produce a two tier system; public for the serfs and private for the wealthy elite. Think that is not possible? Look no further than just north of the border to Canada where the public system is coming apart at the seams because it isn't working. The Canadian doctors have started to open private clinics in defiance of the government because the demand for care is so high and the tightly controlled government supply of services has caused a vast gulf within the societal structure that can only be addressed by the free market! By the way, the doctors readily admit to advancing their family and relatives up to the top of the waiting lists for services! And government officials have access to private physicians and hospitals that regular citizens do not.

Is it ethical to require every citizen to carry health insurance? No! That is a direct assault upon our liberty. It was a direct assault on our liberty to require everyone who drives to carry automobile insurance (especially since we live in a "no fault" state in which every policy issued has an "uninsured motorist" clause in it)! How can there be uninsured motorists in a country where everyone who drives is required to carry automobile insurance? Yet we all pay for the clause anyway! This is not about health care. It is all about power and control over the population. What better way to enslave the public is there than to make them dependent upon the government for health care? None!

While there are legitimate small issues that could be addressed within American Health Care, the liberals are merely using it as a vehicle to make the population dependent upon a massive, bloated and all powerful government. That is the antithesis of the principles that our country was founded upon. Smaller and less intrusive government is what America was all about at the beginning and what it is still about today. Keep the faith my friends. We must not relent in our opposition to this socialistic dragon that is embodied by the liberals. We must not fail to defeat this vile threat to our liberty and freedom. I will not rest until this assault is crushed. Join me in this fight, call your representatives, go to a town hall and demand to be heard, write emails to your representatives and engage friends, family, acquaintances and strangers in a constructive dialogue that empowers them to see this for what it is; an all out assault upon their freedom and liberty!

^[1] AcademyHealth report on Healthcare Financing and Organization as commissioned by the Robert Wood Johnson Foundation, charts and notes on pages 15 and 16.

Nationalized Health Care Through the Back Door.

Well the stimulus bill passed in the Senate. What is really going on in Washington is shameful. They are using the economy as an excuse to "back door" health care reform. The language in this stimulus bill regarding health care reforms puts the federal government in charge of determining just who can have what procedures, treatments, or medications. Most of the Senators did not even read all the language in this bill before voting on it either. And In this day and age of rampant identity theft, I am not enthused about the prospect of having all of my medical records stored on some server somewhere that is connected in any way online. I would much rather have just a paper trail because it is much less susceptible to theft than online records. If banks, credit card companies, and big box retailers can't keep your electronic data safe, how can we expect hospitals to be any better at safeguarding data? And so much more is at stake here than just credit or identity. The information in your medical records could be used to blacklist, blackmail, or outright ruin a person should it find its way into the wrong hands.

I am sorry, but I will be the first one to say, "I told you so" when it starts happening. Electronic medical records is a bad idea. It would save money, but the trade off in potential for damage from a breach in security is unacceptable. Once again unintended consequences will overpower any good intentions of such legislation.

And this really does miss the whole point anyways; that health care is not broken and so doesn't require any fixing. It is the insurance industry that needs to be reformed, not health care itself. Keep health care private. Legislate insurance reform instead. What a novel idea; fix what is broken, do not meddle with what is working!

This brand of socialism has no place in a free and democratic society anyway. Our whole society is predicated on free market capitalism. Why should the health care industry be any different? Open and free competition breeds the innovation and resourcefulness that provides the best standard of care possible. The free market system produces the fastest course to providing best practices because the demand for the highest quality care is prevalent and demand is what drives any market. Can you imagine how bogged down care would be if big brother were having to hold a committee regarding which path to take? Not very efficient in terms of lives saved, perhaps they would save some money, but patient mortality will no doubt increase drastically with bureaucratic wrangling and red tape.