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7.10.12

LA health care change alarmism unrelated to reality

It never ceases to amaze that in the cut-out world of the left its acolytes miss one of the most glaring of the many contradictions inherent in liberalism: the simultaneous belief that the presumably embattled lower class is rational enough to succeed were it not for being disadvantaged by some bogeyman such as big business, the wealthy, moneyed interests, Christian fundamentalists, Republicans, conservatives white males, etc., yet is too irrational to make choices in the marketplace. The reaction of them to upcoming reduction of Louisiana’s state-owned health provision infrastructure illustrates their schizophrenia perfectly.


Last week, an altered plan to reduce spending in Louisiana’s public charity hospitals was announced. In response to the federal government’s sudden retraction of money erroneously given to the state for Medicaid, which constituted the vast majority of revenues coming into that system, almost a fifth of the budget or about $500 million had to be vacuumed from the system. The plan, which covered only the seven institutions in the southern system, leaves most of those institutions with fewer than 20 beds and closes some operating rooms and specialty areas.

It’s the definitive move towards getting the state out of the hospital business in exchange for it to focus more efficiently and effectively on delivering health care to the indigent, but, as is all too typical, those invested in the idea of government provision of goods and services to the point where the sky falls at the excising of a single penny from the public sector wail and gnash their teeth at the prospect. Another cause célèbre, the closure of the Southeastern State Hospital for mental health also animates their panic.

Thus, apocalyptic scenarios get bandied about, how there won’t be enough good care available and/or facilities will be packed with intolerable waiting – although anybody who believes that this would differ significantly from the present this needs to spend one 24-hour period in the lobby and emergency room entrances at any of the charity hospitals. The fallaciousness that produces this attitude merits scrutiny.

First, they seem to think government must be and shall be the only provider of health care. There’s an inability within them to understand that health care is not a zero-sum game. There’s a great big private sector already doing the lion’s share of care in Louisiana – while in every other state their governments do almost none of it – competing with a subsidized public sector that together put the state in the upper quarter of beds provided, both general and psychiatric. Even if the public beds going away did magically disappear in their entirety, the state still would be in the upper half of beds per capita available.

Second, they don’t understand markets. The money that will pay for the care of those on Medicaid isn’t going to go away, it’s just going to be spent in a way that uses it more efficiently that ideally continues the same level of care. What were excess funds that propped up an inefficient government bureaucracy and were diverted for non-essential uses (such as the use of emergency medicine for primary care) will be mitigated it not disappear. Why should the taxpayer foot an $800-a-day tab in a government building for mental health care when the private sector will do the same job for $581 daily? And if that price isn’t tempting enough to coax enough care out of providers, then raise it to $600, or $700. That’s still cheaper than the government solution of $800. Why do they think there is such a premium in government doing something done by the non-government sector that taxpayers must shell out more for it?

Third, they don’t understand human behavior. If you increase supply of one thing, i.e. publicly-provided, cost-free care, more people use it and use it inefficiently. If you diminish it in a way that then jacks up the non-pecuniary costs, for example increased wait times, and thereby make alternatives relatively less costly, they will head to the alternative. So instead of having specialty procedures done at charity hospitals by having a primary care doctor there schedule it, have the indigent go into the Bayou Health premium support program that presents a menu of choices mostly outside of government. If the government solution gets relatively more expensive, other things equal the non-government sector will step up and supply more where government policy encourages this as Bayou Health does.

While the large majority of visits for primary care among the indigent do not involve charity hospitals, some cannot break out that mindset that every little bump and bruise, or sore throat, or ache and pain must trigger a trip to the emergency room for which they pay nothing – precisely because they pay nothing. If that doesn’t change, then maybe non-price barriers – such as increased wait times – may make them instead head to a Wal-Mart or 24-hour pharmacy to buy some low-price relief.

True, they pay their own way for this, which the left argues they can’t afford because they system has kept them from accruing more wealth and thereby owes them transfer payments. Naturally, that view has nothing to do with reality. Anywhere from a majority to large majority of the adult poor in America lack resources not because of a systemic flaw in its government or market economy but because these poor made and continue to make poor choices in their lives.

For many families, “poverty” exists because they’d rather use resources to purchase discretionary consumables that often accentuate style over value, instead of investing in the future and preparing for a rainy day. And the real crime is that government policy encourages this through a panoply of transfer programs that feeds the idea that, for example, if you don’t act more responsibly with their resources in order to be able to afford a cell phone, relax, the government will give you one for free and for $20 of your funds a month it can have unlimited minutes.

So when somebody in a household (as statistics tell us the typical household in poverty has) with cell phones, DVD players and big flat-screen TVs and the like who therefore lives paycheck/government check to paycheck/government check suddenly has a stomach ache, in Louisiana particularly those in urban areas have been trained by policy to head to the nearest charity hospital for free care. But if you understand that, provided their Medicaid dollars follow them, people respond to incentives and disincentives, then you’ll know if you remove the supply of free government care, they’ll head to a non-government provider instead. And if they don’t have the capacity now, these other sectors will ramp it up quickly to capture this new source of revenue made possible by eliminating the government extra-subsidized competition of its government-owned direct providers.

People act rationally in that way. Except if you are a true believer of the left, when they act rationally only in that they want more in transfer payments because the system cheats them, but not when it comes to responding to the changing provider mix in health care because both the poor cannot think for themselves having been conditioned by the cheating system and that system won’t respond to those same incentives and/or will try to cheat them more. Meanwhile, pure, uncorrupt government, the policies of which when generously transferring wealth condition nobody into dependency and irresponsibility, has its provision go by the wayside because of the greed of those unwashed among the non-indigent, if not of private providers themselves and their government lackeys.

Incredibly, not just a few people ignore the tremendous cognitive dissonance behind this nonsense and accept it on faith. Which is why none of the alarmist scenarios will occur; given proper attention by the state in the transition, people will get the quality care they genuinely need, most will pay little or nothing for it, even if it sometimes might be less convenient. And why (if not one born of self-interest; i.e. losing a state job and having to compete for a non-government job) their dystopian view of inadequate coverage with inadequate care bears no resemblance to the real world.

3 comments:

Anonymous said...

You telling us what is rational and what resembles the real world are, in fact, surreal.

Where's Bobby???????

Anonymous said...

YUP!!

Brad said...

There are many flaws in your analysis Jeff. Chief amongst them is the characterization that opponents of the closure of Southeast Louisiana Hospital in Mandeville are "leftists." Any objective review of the outcry shows that the vast majority of the leadership identify themselves as CONSERVATIVE REPUBLICANS.