Tag Archives: Price Fixing

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What economic policies do left-wing and right-wing economists agree on?

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This article is from Harvard economist Greg Mankiw. (H/T Michael)

Excerpt:

Here is the list, together with the percentage of economists who agree:

  1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
  2. Tariffs and import quotas usually reduce general economic welfare. (93%)
  3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
  4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
  5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
  6. The United States should eliminate agricultural subsidies. (85%)
  7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
  8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
  9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
  10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
  11. A large federal budget deficit has an adverse effect on the economy. (83%)
  12. A minimum wage increases unemployment among young and unskilled workers. (79%)
  13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
  14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

I wonder which political party believes in most or all of these positions?

Hmmmmn.

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MUST-READ: How Obama reduces the supply of medical care

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I had written about the so-called doc-fix before, which is the problem of doctors being underpaid by the government for things like Medicare and Medicaid when they provide services to patients. Obama chose not to “fix” these low reimbursements in his health care bill, in order to hide the true costs of socializing medicine. But he has a plan now to fix the problem of government-run medicine not reimbursing doctors adequately.

And it isn’t what you might think.

From Laura at Pursuing Holiness. (H/T ECM)

Excerpt:

Conservatives were outraged by the chicanery of separating physician payment increases from the health care reform (that’s three lies for the price of one) bill Congress recently rammed through.  The “doc fix” was separate legislation so that physician payments could be increased without adding to the total cost of the main bill, so that Democrats could dishonestly claim the bill reduced the deficit.  Now, however, we are seeing the real “doc fix.”

Some Idaho orthopedists grew weary of the low reimbursement rates the government gave them for caring for worker’s comp patients.  So they got together and agreed not to treat those patients anymore.  They hoped that their boycott would force the Idaho Industrial Commission to increase the fee schedule – their payments.  While they were at it, they decided to stop working with Blue Cross of Idaho – also a notorious underpayer – until a better deal could be negotiated.  Unions behave this way all the time, and it’s often very effective.

In a similar case in Colorado last February, the Federal Trade Commission stepped in and charged the doctors with price-fixing.

Those doctors lost, and if they want to continue to work as physicians, they will do so at the prices set by the government.

Now the Obama administration has stepped it up a notch. The FTC only deals with civil complaints. In order to deal with the Idaho orthopedists, Obama sent in Eric Holder and the Justice Department, which is at liberty to file criminal charges.  You see, those Idaho orthopedists collectively agreeing that they had enough and weren’t going to take it anymore, were actually engaged in two antitrust conspiracies.

Read the rest. This is another first class post by Laura, and a great find by ECM. (Laura also sides with me on women taking responsibility for their own actions, which is why men like her)

So, it sounds like the Obama administration is heading towards Canada’s system where the private practice of medicine is a criminal offense. Doctors will not be able to set prices for their services. A patient giving money directly to a doctor, without government approval of the price (price controls), will become illegal. That’s the way that socialists roll.They love to fix prices.

And do you know what happens when doctors make less money than government clerks but have to work 80 hour weeks? That’s right – you have a shortage of doctors! Just like in Canada! And do you know what happens when there is a shortage of doctors? That’s right – you pay for the privilege of dying on a waiting list. (Unless you want an abortion, IVF or a sex change, I guess – because that’s politically correct in Canada)

This is why there are waiting lists in every country that has tried socialized medicine. Fewer doctors means fewer claims to the government – rationing. It’s the real way that government cuts costs. Well, that and euthanasia. Once government starts to regulate the practice of medicine, and to fix prices, you choke off the supply. And then you have to start killing people to avoid bankrupting the system, without or without their consent.

News

MUST READ: How Nancy Pelosi plans to bankrupt private medical insurers

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Story here at Director Blue. (H/T Fausta’s Blog via ECM)

Here’s section 2714 of the health care reform bill.

(a) In General- Each health insurance issuer that offers health insurance coverage in the small or large group market shall provide that for any plan year in which the coverage has a medical loss ratio below a level specified by the Secretary (but not less than 85 percent), the issuer shall provide in a manner specified by the Secretary for rebates to enrollees of the amount by which the issuer’s medical loss ratio is less than the level so specified.

Unless I am mistaken, this means that medical insurers will be forced to pay out 85% of premiums collected as either losses (claims) or as rebates to customers.

So, private medical insurers will only be able to use 15% of all premium collected for operating expenses, such as salaries, rate dvelopment, claims processing, etc. But is 15% of income from premiums enough to keep a business afloat?

Director Blue writes:

Why would a loss ratio that permits only a 15% administrative margin for insurers cause companies to fail? Consider that the administrative expenses include collecting premiums; processing and paying claims; monitoring patient care; staffing customer service functions; paying costs to state and federal regulators; paying sales agents; and general overhead (rent, power, heat, light); etc.

I repeat: No company has ever survived with a loss ratio approaching 85%.

What are we to make of Obama’s claim that we could keep our health plan if we liked it, in light of this new evidence? If what Director Blue has argued is true, you will be depending on the federal government for health care. You will have no choice. And whatever they tell you to do, you will do it. They will be the sole provider of health care for you  and your family. This is how liberty dies – to thunderous applause.

What the Democrat’s health care bill means to you

Director Blue also has a post up about what the Democrat health care bill means to you, in 90 seconds.

Excerpt:

The CBO now estimates health bill spending at $3 trillion over 10 years. Since the CBO historically underestimates expenses, assume massive new deficits for a country that can ill afford them.

You’ll be required to buy a ‘qualified’ health plan. A family earning $102K a year will pay $1,700 a month in premium and out-of-pocket expenses. ‘Willful’ failure to buy a plan will result in a fine of up to $250,000 and ‘imprisonment of up to five years’. Illegal immigrants are exempt from fines and imprisonment.

Every business in America must provide a ‘qualified plan’ for employees and pay 72.5% of the cost. Failure to do so results in an 8% payroll tax.

Read the rest. I would think that some people who worked for medical insurers voted for Obama. Actually, one of the strongest Democrats I know actually left our company recently to go work for a medical insurer. He said that health care was a safe industry during a recession. He’s going to learn the importance of studying economics if this bill passes.

How the Democrats got endorsements from the AMA and AARP

One last thing. ECM also sent me this article on how the Democrats were able to get endorsements from the AMA and the AARP.