Saturday, July 27, 2013

ObamaCare and SwedenCare... A Preview of What's Coming to America? ... Let's Hope Not

ObamaCare is patterned after becoming Europe's version of advanced socialized health care in lieu of a market based system based on free choice and individual responsibility. The idea is that government will make our health care system more accessible, less expensive and better managed.

In short, the era of free lunches for one and all, courtesy of the government knows best gang of elitists, and paid for by the greedy fat cats and money hungry insurance companies, has finally arrived. We the People are in for big trouble.

Although I hope I'm wrong, my considered opinion is that it will make an already very bad situation even worse. Much worse, in fact.

So it's worth taking a few minutes to see what's coming to America. Sweden is a bastion of socialism and government knows best governance, so let's look there.

The Truth About SwedenCare contains much valuable information and present a scary future for Americans as we embark upon further government control of our already twice-as-expensive-as-most-other-countries'-health care systems.

"As a Swede currently living in the United States, with actual experience of Swedencare, I must reply to the delusions propagated by professor Robert H. Frank in his June 15 article in the New York Times, titled “What Sweden Can Teach Us About Obamacare.”. . .

The reality is that Swedish healthcare is the perfect illustration of the tragedy of central planning. It is expensive and — even worse — it kills innocent people.

Free universal healthcare came about in the 50s as part of the Social Democratic project to create the “People’s Home” (Folkhemmet). This grand effort also included free education on all levels, modern housing for the poor, mandatory government pension plans and more. Let us grant benefit of the doubt and assume that some of its proponents had good intentions; as so often, these intentions paved the road to a hellish destination.

It has taken awhile, but it is now becoming obvious even to the man on the street that every aspect of this project has been a disaster. . . .

There is nothing economically mysterious about health care — it is just another service. Like any other it can be plentifully provided on a free market at affordable prices and constantly improving quality. But like everything else, it breaks down when the central planners get their hands on it, which they now have. To claim that the problems are due to a “market failure” in health care is like saying that there was a market failure in Soviet bread production.

Let us look at what happened when health care was provided for free by the Swedish government (i.e., taxpayers). Note that the same economic principles and incentives apply to any service that the government decides to take over and provide for free. The same principles will apply to Obamacare, with some slight variations.

First it was understood in Sweden that free healthcare was only for the poor. It would not affect those who were happy with their existing provider. But when government suddenly offers a free alternative, many will leave their private practitioner in favor of the free goods. The public system will have to be expanded, while the private doctors will lose patients. The private doctors are then forced to either take employment within the public system or leave the profession. The result is one single public healthcare monolith. Can one find economies of scale within its operations, as professor Frank claims? Maybe. But if they exist, they will be dwarfed by the costs and inefficiencies of the bureaucracy that inevitably grows to manage the system.

These results are clearly visible in Sweden. There are very few private practices left. Of the few that are left, most are part of the national insurance system. A huge bureaucracy has been erected to take on all the necessary central planning of public and pseudo-private healthcare. . . .

The advantage of a free market system . . . is that supply and demand meet to form prices. These prices are signals to the practitioners and tell them what their patients need and value most. If there were a sudden surge in demand for open-heart surgery, the price of that service would, ceteris paribus, rise. The practitioners would be motivated by the rising price to move into fields where they can make higher profits. More doctors would move to provide open-heart surgery, the capacity for open-heart surgery would increase, the increased demand satisfied and the price would drop again. Some people protest and think that it is immoral for doctors to maximize profit and live well on other people’s medical problems. But why is it any more immoral than farmers profiting from peoples’ hunger?

Thus, free-market systems systematically allocate capacity (“supply”) and reallocate it quickly to satisfy patients’ needs (“demand”). Due to competition it has the added advantage of always striving for lower prices and higher quality. This principle is as true for medical services as it is for cell phones or gardening services.

The bureaucracy of a public healthcare system cannot use market prices to allocate resources. It must use some other means. First it will try to plan according to estimated demand. It will try to guess the number of bone fractures, open-heart surgeries and kidney transplants in the coming year. The estimates will invariably be wrong, causing shortages in some places and overcapacity in others — at the same — which translates into human suffering and economic waste.

Without the profit motive, there is no incentive to adapt to reality, to utilize expensive equipment to the optimum capacity, to improve the level of service, or treat patients with dignity. All change will have to be pushed down from the planners above by decree. . . .

It was recently revealed in one of the major newspapers that doctors were told to prioritize patients based on their value as future taxpayers. Old people naturally have a low future-taxpayer-value, so they naturally became low priority in the machine and less likely to receive proper treatment. In a private healthcare system you can make your own priorities, you can for example sell your house and spend the proceeds on becoming well. In a socialized system somebody else sets the priorities. . . .

Eventually you end up with a broken system such as the Swedish one, where service is “free,” but not accessible.

For non-emergency cases in Sweden, you must go to the public “Healthcare Central.” This is always the starting point for anything from the common flu to brain tumors. You must go to your assigned Central, according to your healthcare district. Admission is by appointment only. Usually they have a 30-minute window every morning, when you call to claim one of the budgeted slots. Make sure to call early or they run out. Rarely will you get an appointment for the same day. You will be assigned a general practitioner, probably one you have never met before; . . .and very likely one who hates his job. If you have a serious condition, you will be started on a path of referrals to experts. This process can take months. . . . This is an unavoidable characteristic of central planning, analogous to Soviet bread lines, which nobody refers to as a “feature.”

This healthcare “bread line” is where people die. It happens regularly that by the time a patient gets to see an expert, his condition has progressed beyond remedy. It also happens frequently that referrals get lost. Bureaucracies create listless employees, who don’t care, who refuse to go the extra mile, and who are never responsible for failures. . . .

The emergency room is a different experience altogether. Unless you are suffocating or are hemorrhaging profusely, you should expect to wait 5-7 hours to see a doctor. You can only hope for this “high” level of service if you arrive on a workday and during office hours. After hours, or on weekends, it is worse. Doctors are mostly busy filling out forms for the central health care authorities, scribbling codes in little boxes to report services rendered, instead of seeing patients. . . .

Due to a lack of profit motive, free services not only become bad but also very expensive. . . . the average earner pays about 70 percent tax of his income to the government, including the invisible big chunk withheld from his paycheck. Because free systems become more expensive with time and it is impossible to compensate by constantly raising taxes, every year more conditions are classified as non-life-threatening, and are therefore no longer covered.

In the final stage of a central planning failure, the planners simply give up. . . .

The market for private healthcare in Sweden is small. Few people can afford it since they already pay 70 percent tax for all of their “free” stuff. The politicians have private health care, though, naturally paid for by taxpayers. Apparently they are such special people that the healthcare systems they have designed for others are not good enough for them.

When I moved to the U.S., our family health insurance took three months to kick in. One of my family members broke a leg in this period. We found a “five-minute clinic” half an hour away, had the leg X-rayed, straightened and casted, with no waiting time — all for $200 cash. That kind of service is non-existent in Sweden. It is an example of how a market, not yet totally destroyed by the state, can create affordable and high quality services.

The reason American insurance-based healthcare is so expensive is that it is heavily regulated and legally connected to the equally-regulated insurance industry. Both are well protected from competition by regulation. Obamacare will make them even more expensive, bureaucratic, and inaccessible. The way to fix U.S. healthcare is by excising the central planners and regulators from it, not by implanting droves more of them.

I have seen (and lived in) the future of American health care, and it does not work."

Summing Up

ObamaCare is an accident waiting to happen.

Sadly, the wait won't last much longer.

That's my take.

Thanks. Bob.


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