“Mike! Mike! ….Its on! its on!”, called the seven year old big brother.
A five year old Michael Bechara sprinted from the kitchen, turned the corner into the living room, and did a baseball slide on the carpet to position himself perfectly in front of the TV.
A TV that was like a piece of furniture, I might add, encased in solemn walnut veneers.
As the opening theme played on the screen, the two boys watched slack jawed in complete concentration.
As the astronaut’s rocket crashed, the announcer’s voice said, “Steve Austin, a man barely alive.”
The scene then moved into the hospital’s operating room. The announcer continued, “Gentlemen, we can rebuild him. We have the technology. He will be better, stronger, faster.”
So went the opening theme for one of the best TV shows of all time. The Six Million Dollar Man starring Lee Majors.
As I look around these days, my instincts tell me many government officials may have shared my fondness for the TV show.
Recently the US healthcare system was wheeled into the operating room and the bureaucrats may be repeating the familiar refrain from The Six Million Dollar Man, “We can rebuild it, we have the technology, it will be better, stronger and faster.”
Whew..if only this delusion was limited to six million dollars!
In the new drama called the “14 Trillion Dollar Economy” bureaucrats who were incapable of running the Post Office are now in charge of major sectors of the economy, healthcare being the most recent addition to the central planning portfolio.
Of course no one doubts that our current healthcare system is broken, as it basically consists of a cartel system or a managed monopoly of insurance companies.
The issue with the “new” ideas coming out of Washington is that they ignore the problem and focuses on a symptom of the problem. The new healthcare law focuses mainly on insurance. Forcing people to buy it, trying to make it less expensive, and trying to get everyone covered by insurance in one form or another.
This approach will solve nothing. For the disease in our healthcare system is not insurance but rather costs.
Why does a single pill of ibuprofen cost about $10 in a hospital when you can buy 500 pills at that price at your local pharmacy. Why does a bandage cost about $50 in a medical environment when its $5.99 at the supermarket? Finally, why does a CT Scan in China cost a fraction of what it costs in the US, when the CT Scanner in both places is made by the same US Company?
Almost everyone I know has a good hospital story. Reading medical bills has become a sub genre of science fiction.
The point is that everyone is so dependent on medical insurance because of the artificially high costs. Ah…yes.. I think I hear the peanut gallery screaming:
“So Mike, why are costs so artificially high!”
Well, here is a partial list:
- Lawsuits. In America we have the mistaken idea that any “bad outcome” means someone did something negligent. Doctors are not gods and sometimes even the most talented among them cannot save the patient.
- Excessive regulation. Of every healthcare dollar spent, 60% goes towards administration and 40% goes toward medicine. This is a gross inversion of reality that cannot continue in perpetuity.
- Too many unnecessary medical procedures. This is due to fear of lawsuits and direct advertising of drugs and medical products to the population. I am constantly entertained by stories from family in the medical field who describe people with high cholesterol demanding MRIs.
So in a nutshell, unless the issue of cost is resolved, insurance premiums will inexorably continue to rise.
Beyond the technical side of things, there is another issue lurking in the background. It’s rarely expressed openly, but it shadows many of the discussions on this topic.
Many people I know (and respect) say that we have to help people, there are people that have been taken advantage of, and there are those that “know not what they do.”
I agree. They should be helped. But by whom?
My friends, charity comes from family, friends, charitable and religious organizations. In other words, those who voluntarily choose to help.
Charity does not come at the point of a gun. Taking money from one man by force and giving it to another is not a moral act. It is the act of a brigand.
In our economy, an even more apt analogy would be taking money from one man and then forcing him to borrow more money and then giving the entire sum to another man.
Lest you think we exaggerate, take a look at the following chart. We can see that nearly 50% of Americans pay zero federal taxes:
So the half that don’t pay taxes vote to raise taxes on those that do. Simply unbelievable.
Are we now a nation of Robin Hoods? Prowling around looking for someone who in a bureaucrat’s subjective opinion “has too much” in order to confiscate it and give it to someone else.
Is it constitutional or even moral to force someone to buy a product (insurance) from a government approved vendor?
Many are confused by the nature of charity. They do not know its meaning. Charity is not taking from one person by force and giving to another. Love and charity are voluntarily giving from oneself..one’s own time, one’s own money and one’s own property. In other words, “Love thy neighbor” …..
So we’ll wait and see what happens and hope for the best. We close this week with memories of simpler times. Enjoy the opening theme to The Six Million Dollar Man!
Have a great week,
Michael Bechara, CPA
Granite Consulting Group Inc.