"Cost Shifting" in Medicine

Why do we supposedly need to socialize medicine? Here’s the answer, according to one Colorado “reformer:”

Health care reform could span years
Lawmakers will begin to lay out a plan based on five proposals from a state panel, but a major package is unlikely this year.
By Jennifer Brown
The Denver Post
Article Last Updated: 01/08/2008 12:38:14 AM MST

…Convincing voters to foot the bill for massive health care reform is a huge challenge.

For starters, 92 percent of voters are insured, said Rep. Anne McGihon, a Denver Democrat who chairs the House health committee.

Why would they support a tax increase to give poorer Coloradans health coverage? Lawmakers point to this statistic: Coloradans who have insurance spend an extra $950 each year to cover the costs of those who show up at the hospital without insurance. …

The first reply to the reporter’s claim is that her figures seem to be way off. As Brian Schwartz comments beneath the article:

TAX US $400 TO SAVE $100?

…This figure [of $950] conflicts with the “Baseline Coverage and Spending” report* at the 208 Commission’s website, which shows this cost to be less than $100.

The Commission’s proposed $1.1 billion annual tax increase would force everyone to buy politically-defined insurance. Since 2.8 million Coloradans have private insurance, the tax would cost each privately-insured Coloradan about $400 — to save $100?

Out of the $1.4 billion annual medical spending for the uninsured, the uninsured themselves pay 45% out-of-pocket. Private philanthropy, workers compensation, and veterans benefits account for another 23%. Public programs, which taxpayers already are forced to fund, account for 15% of medical costs for the uninsured. Only the remaining 17% ($239 million) — categorized as “free from provider” — can directly contribute to higher premiums. That’s less than $100 per insured Coloradan. …

208 Commission report at: www.tinyurl.com/yuqkk8

Brian Schwartz, www.wakalix.com

Posted by Brian Schwartz (aka wakalix)
at 10:14 PM on Tuesday Jan 8

In other words, the socializers’ “solution” to “cost shifting” is to massively expand cost shifting.

But the fundamental question is, why are hospitals forced to give people “free” care? After all, people who need food or clothes can’t show up at the grocery store or the mall and demand free stuff. Lin Zinser and Paul Hsieh, MD, explain the history in their article, “Moral Health Care vs. ‘Universal Health Care’:”

One reason for the overcrowding and overuse of ERs is the Emergency Medical Treatment and Labor Act of 1985 (EMTALA). This law requires that hospitals that accept Medicare patients diagnose and treat anyone who comes within two hundred feet of an emergency room, regardless of whether the person can pay for the treatment. The effect of this law is that anyone can walk into an emergency room at any time and receive treatment — without concern for payment.

That law should be repealed. Those who need medical care and cannot afford it should rely on payment plans or voluntary charity, whether provided by treatment centers or individual donors.

However, the “cost shifting” resulting from forced care is only a minor part of the problem; socializers use it as a pretext to deflect the debate away from the broader issues. A larger problem is the “cost shifting” that results from underpayments by Medicare and Medicaid. But the biggest problem is not “cost shifting” at all — it is the transformation of insurance to pre-paid, tax-favored medical care, which results in more use without regard for cost and thus ever-higher costs. And that is precisely the problem that any of the schemes to expand political power over medicine would exacerbate — to then be “solved” through political price-fixing and rationing.