Among the noise heard about the huge defeat suffered by President Trump, Paul Ryan and the GOP, Francis Menton gives his perspective: “Third party pay for health care, whether it be government pay (Medicare, Medicaid), or near-universal insurance-company pay for ordinary and routine expenses, or a combination of both, cannot work for the long pull.”
There is no getting around the fact that medical spending has become a tremendous drag on the incomes of the middle class. If you want to find the one main reason why middle class incomes do not go up, and why middle class families are angry at their inability to get ahead, this is it.
Third party pay for health care, whether it be government pay (Medicare, Medicaid), or near-universal insurance-company pay for ordinary and routine expenses, or a combination of both, cannot work for the long pull. Unfortunately, like it or not, scarcity is the essential unavoidable condition of human existence. No-questions-asked third party pay for healthcare ignores the fundamental grinding reality of scarcity. We pretend that healthcare can be demanded and consumed in whatever infinite amounts somebody might want, without downside. It’s the usual illusion of socialism, seemingly confined to one small area of the economy; so, really, how much destruction can it wreak? Unfortunately, the amount of destruction it can wreak is vast, and may only have begun.”
There will be no real growth of middle class income in the U.S. until states take on the issue of health care reform and return the individual responsibility for low dollar health expenses to consumers. Those states that accept this responsibility will see a clear competitive advantage over those states that indulge in the socialist illusion of no cost-conscience from consumers in the medical arena.
Tomorrow, part II from the Manhattan Contrarian here.