July 7, 2009
Health Care will Cause U.S. Dollar Collapse
It is becoming increasingly likely that health care will be the straw that causes the U.S. Dollar to collapse. There is no doubt about it that health care costs are out-of-control in America. Unfortunately, most Americans are calling for the government to do something about astronomical health care costs, when the government is actually the cause of the crisis and will only make it much worse.
Medicare costs have increased from $3 billion in 1966 to an estimated $408 billion in 2009. This equals a compound annual growth rate of 12% and proves that inflation gravitates towards parts of the economy where government is involved in the most. Health care now accounts for 17% of the U.S. GDP, and by 2017 it is estimated that one out of every $5 spent in this country will be on health care.
Isn't it amazing that the one area of medical care that is going down in price is plastic surgery and other cosmetic procedures, because it is the area where the government is involved in the least? Free market forces dictate plastic surgery prices, because health insurance typically does not cover it.
Today we have a system where tax free health benefits from employers force Americans into expensive health insurance plans that encourage individuals to claim every small doctor's visit. This creates abuse of the system with Americans going to the emergency room for unnecessary reasons, knowing they will only have to pay a $10 co-pay.
If Americans were able to take home the cost of their health insurance plans, in the form of higher wages, they would then be able to purchase cheaper health insurance plans on their own that cover only bad accidents and major emergencies. If they wanted to see the doctor for something minor, they could pay for it out of pocket. With less people abusing the system, waits would be shorter and doctors would be encouraged to charge the least. Today, with doctors getting paid by a handful of third-party corporations, they are encouraged to charge the most.
Government intervention into health care has ruined the industry for doctors too. The government has made the industry less efficient by creating too many licenses and regulations. Doctors now spend half of their time filling out excessive paperwork while worrying about malpractice lawsuits. If somebody has a small bruise on their arm, instead of telling the patient to use ice, doctors now run multiple tests and fill out dozens of forms to comply with regulations and prevent themselves from being sued.
Obama's plan of socialized health care will wipe out the private sector and create less competition. No private health insurance companies will be able to compete with the government, which will be able to operate at a loss continuously. With any remaining efficiencies of the free market eliminated, costs will go up for all Americans in the form of much higher inflation, and the quality of health care will go down.
If we want the U.S. to remain the country where millions of people travel to for top quality medical care, we need to allow the free market to work for itself. Free market principles are the only way to drive costs down while improving the quality of health care.