Monday, February 17, 2014

ObamaCare’s  Greatest Risk – Risk-Free Health Care for All

To try to eliminate risk in business enterprise is futile.  Economic progress can be defined as the ability to take greater risks.  The attempt to eliminate risks, even the attempt to minimize them can only make them irrational.  It can only result in the greatest risk of all: rigidity.

Peter F. Drucker (1909-2005). Management: Tasks, Responsibilities, Practices,  1973-1974

I believe the greatest risk of ObamaCare is risk-free care. Yet ObamaCare  is intended to minimize, even eliminate risk, for  U.S. health are consumers.   

This is dangerous as well as futile.  It produces economic stagnation.  It raises taxes. It impinges on personal freedom and personal choice.   It discourages innovation.    It fixes the health system in place, and that is dangerous for a dynamic U.S. capitalistic economy.

ObamaCare  inhibits hiring.  It kills imaginative solutions.  Consider the case of Silicon Valley,  the center of  America’s electronic ingenuity.  In the words of Tom Friedman (“Start-Up America: Our Best Hope,” New York Times, February 16, 2014).

What a contrast. Silicon Valley: where ideas come to launch. Washington, D.C., where ideas go to die.  Silicon Valley: where there are no limits to your imagination and failure in the service of imagination is a virtue. Washington: where the “imagination”to try something new  is now a treatable mental illness covered by ObamaCare.  

"Trying something new," is a synonym for risk.

Yet ObamaCare seeks  to  provide  risk-free health care for all.  In the process, it  stifles innovation and kills imagination  by burdening us with taxes  and strangling us with regulations.    It seeks to eliminate the economic risk of disease by virtually guaranteeing  that no U.S. citizen will be at financial risk for his/her health care needs.   Taking risks, like making a profit, are minimal conditions for staying in business and are the heart of free-enterprise capitalism.

One of its most popular features – to force health insurance companies to accept all  comers regardless of pre-existing illnesses or conditions ends or minimizes risk.   Indeed, insurers cannot even ask if an applicant has any pre-existing problem.    It is futile to try to suppress all risk for covering pre-existing conditions, as shown by a report this week that those with pre-existing  conditions  now have to pay higher costs for drugs.

Insurance, by definition,  exists  to protect against risk.   Insurance is a risk-taking enterprise.   If you try to remove all financial risk of developing  disease,  to guarantee that all peoples are free of any financial risk of developing disease, you destroy  the reason insurance companies are in business.

The promise of risk-free health  security for all citizens is the central premise and promise of ObamaCare.   It will protect those with pre-existing conditions,  children, and young adults up to age 26 under their parents plans, from risk by making sure they are insured.  In the future, it hopes to  assure that all people are insured against risk. Everyone will have equal access to care with equal protections for all.   

Government will make free or subsidize care for the poor, the near poor, and minorities so that they bear no risk.    Business will be regulated and fined if it does  not  cover all employees to minimize risk.   Physicians and hospitals, in one way or another,  will  provide care at no risk to patients with risk only to themselves.    It will do this by leveling the playing field,  by having the Have’s pay for the Have-Not’s and by redistributing wealth and health benefits  to  all  at no risk.

The only problem with this is that  demand for health services is a bottomless pit.     There is never enough money to insure everyone – to indemnify everyone.  We shall all age, we shall all develop chronic disease, and we shall all die, even if the state insures us all, even if tries to protect us with “free” preventive tests,   even if it  seeks to institute health and wellness programs for us all.    Funding demands are inexhaustible.  There will never be enough money to go around.  There will never be enough “rich” or middle class people to pay for care for all. 

Sooner or later, as Margaret Thatcher reminded us,  we will run out of other peoples’ money.  And as Winston Churchill so sagely observed,   The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries."

And for ObamaCare the inherent outcome of policies that insure and assure us that we will have no risk of disease or its prevention are economic stagnation and health system rigidity  with loss of health plans, doctors, hospitals, and individual freedom to chose what level of care and what health care services one wants and needs.

Tweet:  The ObamaCare’s greatest risk is that it assigns  government the impossible  task of  eliminating   risks of ill-health and paying for that risk  at no risk to the economy.

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