Posted by Jason | Posted in Health Care | Posted on 26-02-2010
Yesterday, Obama held his health care summit with both parties. While working, I had it playing in the background. Unfortunately, I found my self laughing and yelling at the TV more often than I’d like to admit.
What the summit highlighted to me is the complete ignorance of Obama when it comes to economics. He can bring out his laundry list of sob stories, but it still doesn’t change the fundamental economics that I outlined in a previous post on root causes.
Here is a sample of Obama’s ignorance.
“So when you break down the costs, what we know is 33 percent of the costs in health care shouldn’t be there.
And how do we go about doing that? And what are the components of that cost? And when you look at, when it’s studied, if you look at what Malcolm Sparrow from Harvard says, he says 20 percent of the cost of federal government health care is fraud. That’s his number.
If you look at Thomson Reuters, when they look at all of this, they say at least 15 percent of government-run health care is fraud.
Well, when you look at the total amount of health care that’s government run, you know, you’re talking $150 billion a year.
So tomorrow, if we got together and fixed fraud, we could cut health care 7.5 percent tomorrow for people in this country.”
“So it seems to me if cost is the number one thing that’s keeping people from getting care, then the efforts of us, as we go after cost, ought to be to go to those areas where the cost is wasted.
And there’s a philosophical difference in how we do that. One wants more government-centered approach to that. I would personally prefer a more patient-centered, market-orient approach to that. But nevertheless, there’s where we can come together, just on those two areas, where we could cut costs 15 percent tomorrow. And that’s for everybody in the country.
What would — what would happen to access in this country if tomorrow everybody’s health care costs went down 15 percent? Access would markedly increase.”
“So that’s an example of where we agree. We want to eliminate fraud and abuse within the government systems.
Let’s recognize, though, that those savings in the government systems, which will help taxpayers and allow us to do more, doesn’t account for the rising costs in the private marketplace.”
Can you believe how ignorant Obama is about markets and the economy? I guess based on his performance so far, you are probably can. Coburn explains that based on the best case numbers 15% of all government spending is waste. The government accounts for 50% of all heath care spending already, so that 15% would count for 7.5% of all health care spending. Obama seems to think that there are two separate and unrelated markets and says that explains rising government costs but not the private sector costs. WHAT? Are you serious Mr. President?
This would be like dividing up a bathtub into half private and half government with the faucet on the governments side. When the tub starts overflowing, Obama would say, “Well the faucet explains why the government side is overflowing, but that doesn’t explain why the private side is as well.”
There is one health care market. It doesn’t matter where the money comes from. If more money is thrown at the same resources, prices go up. What Coburn is saying is you have 15% of all the government’s money as waste thrown into the market which is chasing the same resources as the private sector. That is one of the reasons costs are going up on both sides.
This one statement should highlight why government involvement in anything is a complete disaster. They have absolutely no concept of economics or reality for that matter. Democrats want to legislate based on feelings and wishes. Well, I may wish everyone was a millionaire, but that doesn’t mean it’s good policy. It doesn’t matter how many stories I tell about poor people.