Tuesday, January 11, 2005

Socialized Health Plans in Britain and Tennessee Running Out of Money

They are running out of money for a very good reason. Pricing in a free economic system convey information. High prices generally communicate "we have limited supplies of this based on how many people want this."

In a socialist or socialist-lite system, this information isn't accurately conveyed. What free medicine or very inexpensive care tells people is "come as often as you like." This creates much more demand than the system can handle. And when someone else is footing all the bills, this means a lot of money is spent.

None of us want people to die because they can't afford health care. But a system which doesn't discourage people from seeking more health care than need will lead to one thing: rationing. It could be by an HMO or by government, but you will get rationing. And then people will complain about rationing.

When the rationing is done by an HMO board or by a government official, those rules tend to be extremely inflexible.

Both HMO's and governments spend other people's money. That is their common denominator. Tax rules make it more feasible to your company to make health care decisions. And, ultimately, runaway costs because of the reasons listed above created the HMO rationing system. At least you can sue an HMO. I shudder in horror when governments start rationing health care.

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