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The Opportunity Cost–An Opportunity Lost

Posted Dec 27 2009 8:30am


There are so many things wrong with both the House and Senate self-styled healthcare ‘reform’ Bills that it may seem hard to choose the worst. Not so. The hands-down winner is opportunity cost. Before seeing why, look at the other contenders for first-place failure.

Start with inequity. Why are MediCaid and MediCare patients treated differently in Nebraska, Nevada and Louisiana? Answer: because those Senators sold their votes for higher prices than other Senators. Ask yourself: why should poor and old people get worse care in the other 47 States? Is that what we sent our ‘Representatives’ to Congress to do?

Another element that fails the smell test, apparently lost in the horse-trading frenzy, is the fact that tens of millions will remain without coverage. These are mostly people who qualify right now for Government programs but choose not to enroll. How does so-called healthcare reform try to get them into the system? Answer: by tax penalties, if the Government can find them. End result: millions will remain uninsured, will need emergency care and get it at some local ER, while the reform Bill does nothing to deal with the necessary cost-shifting.

Then there is the shell game. The Bill might increase health INSURANCE (for some). What it certainly will do is reduce CARE for all: there will be fewer dollars, as well as fewer nurses, doctors and hospitals to provide services. The way Congress is ‘fixing’ things, increased coverage will come with reduced care.

Before we get to costs–direct, avoided and opportunity–keep in mind that when the government refers to “cost cutting and “MediCare savings,” they are neither cutting costs nor saving money. When the Government cuts ITS short-term outlay and saves ITS budgetary balance, it does so by reducing payments to providers. This reduces services. Every time you hear some advocate of so-called healthcare reform wax eloquent about how she or he is reducing costs, just substitute the word services for costs and see if you still like what they are saying.

Direct cost refers to what we spend, now. Unsupportable national healthcare spending was what started the whole conversation. To this day, the President conveniently ignores the fact that the largest expense in all of healthcare spending is the “ waste of the middle ,” the bureaucracy, aka the Federal Government.

What will the self-styled reform Bill do to costs? Answer: increase spending by about $1 trillion dollars. This is the exact opposite of cost-saving. Worse, they are spending money we do not have and therefore they must print dollars. This increases the deficit, slows (stops?) our financial recovery, weakens our competitiveness globally, and further encumbers our children’s future.

Avoided cost is what we will not pay in the future by spending money now. In healthcare, this is generally money spent on preventative and maintenance care. By reducing payments to MediCare and MediCaid, the Bill will actually increase costs by failing to AVOID future costs. Ever since my home State of New Mexico balanced its 2003 budget by eliminating asthma prevention programs, it has spent more every year paying to treat acute asthma attacks and their resulting hospital admissions, very large costs that could have been avoided.

An opportunity cost is a possibility we must give up when we choose a different option. By signing ObamaCare, the President is accepting a quick and easy, political solution that will fail to cure a system with a medical problem fixable only by practicing good medicine on it. He created a great opportunity–to discuss root causes and decide what we want our healthcare system to do–and then wasted it.

The most egregious part of the self-styled healthcare ‘reform’ Bill is its opportunity cost.

At the climax of the movie “The American President,” Michael Douglas playing the President, says before a packed press conference room that the Bill he has been watering down, twisting arms and making deals to pass is fundamentally flawed; he is withdrawing it to write something that makes sense and will work. Maybe, as a belated Christmas present, the real President will see the light, veto this monstrosity, and give us back the chance to really fix healthcare: the opportunity cost–an opportunity lost.

System MD

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