Controlling costs? No. Controlling America? Yes.

Obama knows that Americans will not agree to spend a trillion dollars over the next ten years to provide health care to 1/3 of Americans who don’t have it today. That, of course, will be the result of his plan according to the Congressional Budget Office. Therefore he has been marketing his plan as the means to reduce costs for all Americans. He argues that, by building a government plan based on Medicare, he will drive down costs and, therefore, expenses for all of us.

‘First, the rising cost of health care must be brought down.” That’s what President Obama recently declared when outlining the basic principles of his health care plan.

His supporters have echoed his emphasis. The New York Times writes that, when it comes to health policy, “The president’s main focus is on starting to reduce the soaring cost of health care.”

Click to enlarge

Click to enlarge

That the government will drive down costs with a program based on Medicare isn’t just difficult to believe, it is contrary to the facts. Medicare has, since 1970, increased spending per patient at a much faster rate than the private sector.

A new study I’ve completed, published by the Pacific Research Institute, takes all health-care spending in the United States and subtracts the costs of the two flagship government-run programs, Medicare and Medicaid. It then takes that remaining spending and compares its cost increases over time with Medicare’s cost increases over time.

The results are clear: Since 1970 — even without the prescription drug benefit — Medicare’s costs have risen 34% more, per patient, than the combined costs of all health care in America apart from Medicare and Medicaid, the vast majority of which is purchased through the private sector.

Since 1970, the per-patient costs of all health care apart from Medicare and Medicaid have risen from $364 to $7,119, while Medicare’s per-patient costs have risen from $368 to $9,634. Medicare’s costs have risen $2,511 more per patient.

It doesn’t take an economist to see that the private sector is far superior in its ability to control costs than is the government. In fact, that the private sector has had the level of difficulty it has experienced is largely due to government interference and social engineering.

The reality, of course, is that Obamacare has little or nothing to do with controlling costs and everything to do with controlling America.


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9 Responses to Controlling costs? No. Controlling America? Yes.

  1. a doc's wife says:

    Not only will this plan kill healthcare as we know it but it will destroy the quality of doctors we have in medicine. We will see a decline in the quality of those applying to medical school. The general public has no idea the sacrifices made by doctors and their families. I am so sick of hearing about the greedy doctors. We did not go through 4 years of med school, a 4 year residency(basically working for min. wage) and another 3 year wait hoping to make partner, and $150,000 in debt so that my husband can work for the government and be told what Obama thinks he should make. We aren’t waiting on a gov. hand out to bail us out. We will pay back our loans and carry on like any hard working American should. Now the family sacrifices- missed holidays, birthdays, dance recitals etc due to working to save the lives of others. My husband can’t just take a day off b/c my child has a school program. He can’t miss work because people are waiting for surgeries, many times to save their lives. No one with any intelligence will spend 15 or so years making sacrifices so that Obama can tell them what their salary should be and how they can practice medicine. He will destroy medicine in America. What has the gov ever run that was efficient and cost effective? No one is denied health care. A huge problem with the uninsured is the number of illegal aliens in this country. I am happy with my health care and the insurance I pay for. I am not willing to give that up for people who choose not have insurance or are here illegally. Health insurance is not a right provided by the gov but a priveledge that you must make a priority and pay for.

  2. R.D. Walker says:

    A docs wife: You are absolutely right. You get it because you have lived it. Not only will Obamacare drive up costs, it will create very real shortages in the market.

    The same principle applies to business in general. Entrepreneurs work endless hours, risk everything including their homes and their families. The result is new and growing businesses that create jobs, bring new products to market, grow GDP and improve standards of living. They also grow tax revenues.

    Obama’s confiscatory tax policies and controls on income will cause many to say “screw it” and not put in the work or take the risk. The result will be more unemployment, less economic growth, fewer new products and a decrease in standards of living for all of us. It is pure evil and, since the majority of Americans are economically ignorant, they support it.

    This is the New Order.

  3. James says:

    a doc’s wife: I hope your husband is rewarded financially for his careful hard work.

  4. R.D. Walker says:

    Larry Kudlow:

    According the U.S. Census Bureau, we don’t have 47 million folks who are truly uninsured. When you take college kids plus those earning $75,000 or more who chose not to sign up, that removes roughly 20 million people. Then take out about 10 million more who are not U.S. citizens, and 11 million who are eligible for SCHIP and Medicaid but have not signed up for some reason.

    So that really leaves only 10 million to 15 million people who are truly long-term uninsured.

    Yes, they need help. And yes, I would like to give it to them. But not with mandatory coverage, or new government-backed insurance plans, or massive tax increases. And certainly not with the Canadian-European-style nationalization that has always been the true goal of the Obama administration and congressional Democrats.

    Instead, we can give the truly uninsured vouchers or debit cards that will allow for choice and coverage, and even health-savings accounts for retirement wealth. According to expert Betsy McCaughey, instead of several trillion dollars and socialized medicine, this voucher approach would cost only about $25 billion a year.

    But the Democratic agenda has never really been about just the uninsured. And it certainly hasn’t been about real cost-cutting or true market choice and competition. Nor has it been about tort/trial-lawyer reform. Instead, the Democratic agenda has always been a class-warfare, anti-business attack on private-sector doctors, hospitals, insurance firms, and drug companies. It’s all about control, knocking down their profits, and telling them what to do.

    Because government planners know best, right? Wrong. Absolutely wrong.

  5. a doc's wife says:

    Here is a comment posted on an article I was reading about health care reform. I feel this is typical thinking of most liberal free loaders hoping for free health care. It is this type of crazy thinking that fully supports NObama’s plan for socialized medicine. It makes me furious that people like this guy take their doctors forgranted and some how want to punish them for their success and hard work. Do people really want half-ass docs working on them for nothing. I believe Obama sees docs this way and like the above comment wants to make this about class warfare and punishing those that succeed on their own. He doesn’t care about health in America. It is about control, power, and punishment.

    “Like the entire pharma-medi-drug cartel, he wants to continue to GORGE himself at the trough. An entire industry, helping themselves lavishly to people’s pocket using all kinds of fantasy excuses to justify charging $1000 for 10 minutes of labor and that this is somehow “deserved” for their “talents” and “unique” and “irreplaceable” services. The reality is these folks, like self-serving CEO whores, are just out to help themselves to the pocket books of the US underclasses. They have convinced themselvs that they are oh so brilliant and deserving of these grotesque fees. All a doctor has to do is hint at their senator that next time if they have a malvaise, maybe, just maybe, the senator won’t get quite as prompt as service and.. the senator will sign into law whatever grotesque law the pharma-doctor cartel will conjure up.”

  6. notamobster says:

    The fundamental issue with this and most other MaoBama policies is his total lack of understanding as regards the U.S. Constitution. They say he is a “Constitutional expert”. Horseshit! If he understood the constitution and followed the strict construction, he would not think that healthcare is a right.

    Privileges are granted. Rights are not! Healthcare is a service like any other. If you want someone to fix your air conditioner, you get a government card for, you pay for it!

    What’s next? A chicken in every pot?

  7. R.D. Walker says:

    A doc’s wife: The commentator you quoted is a submoron. He, like most liberals, has no idea how markets work because he has no idea how normal humans interact. There are thousands and thousands of doctors. If one doctor charges too much for a service, others will take advantage of it by charging less. There is no way that any service provider can over charge in a competitive market. Price is not a competitive advantage; it can always be undercut and will be cut down to marginal cost.

    That is in a competitive market. Health care is not competitive. The insurance industry is a third party in the process. I touched on this in my federal lemonade post. The market controls are lost with the third party payer between the patient and the doctor. There is absolutely, positively no way this is going to be fixed by introducing the government as a fourth party in the process. In fact, it will only enhance the problem.

    They either don’t understand this and, therefore, have no business in leadership or, they do understand this and are deceiving us, and thus they have no business in leadership.

  8. R.D. Walker says:


  9. UNRR says:

    This post has been linked for the HOT5 Daily 6/23/2009, at The Unreligious Right