Tuesday, May 12, 2015

Consumer Serfdom and Government Turfdom

As I read Robert Pear’s article “White House Moves to Fix s Key Consumer Complaints about Health Care “ (New York Times, May 8, 2015), I thought of Friedrich von Hayek (1899-1992).

The two main consumer complaints are: one, inaccuracies of insurance plan doctor network directories, making it hard for consumers to find doctors who can cover them; and two, the unexpected costs not covered by their plans.

The government solutions are : one, having insurers update their directories monthly or pay a $100 fine per day; and two, creating an “out-of-pocket calculator, “ so consumers could calculate the cumulative costs of premiums, subsidies, co-payments, deductibles, and out-of-pocket costs, many of which were proving to be surprisingly and unpleasantly high.

I thought of Friedrich von Hayek (1899-1992), patron saint of conservative economists and a social philosopher. Hayek wrote The Road to Serfdom in 1944. It was published in Great Britain where he was residing.

In his book, Hayek warned that government control of economic decision-making through centralized planning rarely worked in the marketplace and led to loss of freedom and economic serfdom. He said government could not control or account for the billions of marketplace transactions as efficiently and effectively as consumers buying and bargaining with sellers in that marketplace.

I thought of what happened in Britain two days ago when voters robustly rejected the Liberal Party. The Liberals favored higher taxes on the rich, tighter regulations, and more social spending. These are among the hallmarks of ObamaCare. Will the 2016 U.S. elections repeat the British experience? Will ObamaCare even be an issue? In the digital era, can Washington control or account for everything health care consumers do and pay for in the health care marketplace? Will the government control over the health care turf, empowered by computer advances and imaginative software nerds, reduce consumers, physicians, and health plans to government serfs? Or will digital delineations of financial exchanges empower them through knowledge of transactional transparencies ?

I think not. Voters, as health care consumers, have ways of adjusting to commonsensical realities. One of these ways is to vote out the central planners. Another is to deal directly with health care providers, and to leave third parties out of the market equation.

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