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The Death Panel Cometh

When someone else buys you something, they decide what you get.

By Will Offensicht  |  March 16, 2012

When I rode a bus across Afghanistan in 1969, my seat mate turned out to work for the Peace Corps.  He told me his boss had proposed to the king that the Americans drill wells to get pure drinking water "so the babies won't die."  Having watched kids wash food in roadside gutters that carried sewage, I understood what he meant.

The king turned down the proposal.  "Babies have always died," he said, "but I can feed the ones that live.  If babies don't die, there won't be enough food, and people will blame me for that."

The king wasn't all-knowing - he was ousted by a Communist coup in 1973 - but he had a practical grasp of the law of unintended consequences.  He knew that when the wells ran dry, which was inevitable if the pumps pulled water out faster than it was put back by rain, the increased population would crash in a catastrophic famine when water ran out.

Someone Else Must Pay

Policies such as water regulation have consequences.  We're seeing an accelerating trend of Americans not wanting to pay for their demands.  Instead of paying landowners to conserve their land for endangered species, pro-animal groups pass laws preventing people from using their own land as they want.  If someone finds an endangered critter, they can prevent the owner from farming, building, or otherwise using the land.

This would be no problem if the pro-animal folks were willing to buy up the development rights as some do.  The majority want the land kept "pristine" without having to pay for it, however, and pass laws taking landowners' rights without compensation.  Historical societies do the same thing - they want to force a building owner to keep it the way they like it without paying for the privilege.

We see a desire to get things for free in family matters.  Men have always been more willing to have sex than to assume responsibility for any children that might result.  Back in pre-welfare days, a woman knew better than to have sex unless the man married her because she'd be holding the baby.  She wouldn't marry him unless he had a job, because she'd need financial support.

With our welfare system in place, it doesn't matter.  Instead of her husband paying, someone else will pay for her apartment, her pregnancy, and anything else.  Why are we surprised that more than half of American children are born to unwed mothers?  It's a whole lot easier for a woman to get pregnant than to get a husband.  "Someone else" will pay, so why not?

Medical Follies

This trend is spectacularly evident in medicine.  Back before tax-free medical insurance was put in place during WW II, people paid for their own medical care, did without, or persuaded some other entity like a charity to choose to provide care.  On the other side of the counter, suppliers such as doctors, hospitals, and pharmacies had to make sure their products were affordable or they'd have no customers.

With health insurance, however, people got used to medical care that was free to them - someone else would pay.  For those lacking insurance, laws were passed saying that hospitals couldn't turn anyone away, no matter how sick or broke.  That's how one illegal immigrant ran up more than a million dollars worth of hospital charges in New York City.  The hospital passed the costs on to its other patients, of course; not all hospitals are as successful with creative accounting - it's not unheard of for hospitals to go bankrupt and close their doors despite every bed being full.

Once society decides that people shouldn't be responsible for their own medical care, once you decide that someone else should pay, there's no stopping.  The whole blowup over requiring medical insurance plans to supply free contraception is just another manifestation of the idea that nobody should pay for their own health care, just pass the bill to someone else!

Follow the Money

Let's look at some medical situations which cost a lot of money.

I have a disabled friend who's on Medicaid.  Enough welfare recipients make the hospital Emergency Room their second home that costs are skyrocketing.  My friend recently got a letter saying that the government would pay for no more than 4 Emergency Room visits per year unless the visits were due to real emergencies.

Another friend told me how that worked out.  He went to the ER with a blocked urethra.  When your urethra's blocked, your bladder can't empty.  When the pressure gets too high, your kidneys shut down or your bladder bursts.  Either way, this is a genuine life-threatening emergency, no doubt about it.

My friend waited for hours.  The local welfare community had figured out that if you arrived by ambulance, the system assumed that it was a real emergency and it wouldn't count.  They also figured out what to say to 911 to get the ambulance to come.

Not only did you get a free ambulance ride instead of having to walk, ambulance riders got to the head of the line in the ER and didn't have to wait as long!  How sweet!  Someone else is paying, so why not?

I have another friend in his 90's who's going a bit deaf.  He's very unhappy with his hearing aids even though they cost his insurance company $1,200 per ear.  He told me that on his last checkup, his hearing wasn't quite bad enough to quality for a cochlear implant.  This is a sort of artificial ear that's installed permanently.  He added that once he qualified at his next checkup, the government would cover the entire $150,000 cost.

Unintended Consequences

When "someone else will pay," nobody worries about cost.  My friend with $2,400 worth of hearing aids that don't work doesn't worry that his $150,000 implant will cost the government more than all the income tax he paid over his entire working life.  And in exchange for what?  A marginal hearing improvement in someone who can't possibly have very many years of hearing left.

We've all seen how smart phones and other electronic gadgets keep getting better and cheaper.  Why doesn't this happen with medical gadgets?  The main reason is that users don't pay for them.  The insurance company may huff and puff, but doesn't really care.  The more expensive medicine is, the more they'll boost insurance rates next year.

Doctors certainly don't care - the more expensive gadgets are, the more they can charge for installing them.  Companies that make gadgets will charge whatever they can get away with, no surprise there.  With the FDA making it hard for anyone else to compete, why shouldn't they charge whatever they can?  What would Apple charge for the iPhone without Android competing with them?

Death Panels Are Coming

Sarah Palin was right - Obamacare did set up death panels.  If a medical procedure could save your life, some bureaucrat decides you can't have it, and you die, that's a death panel.

In the old days, if you died because you couldn't afford treatment, nobody blamed the government or anybody else.  Now that we've decided that "somebody else" will always pay for whatever any pressure group can argue is an "essential medical service," people will blame government when people die just as the King of Afghanistan said he'd be blamed if people didn't have enough food.

Once "someone else" will pay, demand becomes infinite.  The only way death panels can have any effect on medical costs is to let people die.

What happened when Medicaid limited ER visits?  Instead of walking or getting rides from friends, welfare folks get to the ER by ambulance so it wouldn't count.  Costs went up instead of down.

What is Medicaid going to do about it?  Unless they bar the doors, unless they say, "No ER for you" and let people die, costs will go nowhere but up.

"User pays" is the only way besides death panels to limit costs and encourage lower prices.  Until we're ready to do that, or until our society collapses and we have no choice, cost containment is but a mirage.