OBAMA-CARE AND PLUMBING... WILL IT FLUSH

American’s recent introduction to government health care is a horrible experience.  Sadly, this is only the beginning of a trek down a road to hell.  Supporters claim the legislation will provide more Americans health insurance.  Assume this claim is true. There is a difference between health insurance and health care.  The fact that someone has insurance does not guarantee proper health care will follow.   This is because the laws of economics cannot be  changed by Obama-Care.

Economic principles are universal.  I use examples of home plumbing repairs to illustrate how government managed health care, while providing insurance, will not provide health care.   Private industry often must reduce costs to remain viable.  An example of this is the reduction of the price of high definition televisions.  A television costing thousands of dollars a few years ago now cost hundreds.  A private company facing reductions in the prices charged for products it produces must see matched reductions in cost if it is to remain viable.   This is usually done through innovation and economies of scale.

The rhetoric of government run medical plans includes reduced medical costs.   Government programs, not faced with a competitive marketplace, uses bureaucratic tools to “reduce costs.” This is usually done through reducing payments to providers.  The following plumbing example illustrates how government controlled medical care with destroy it.

Americans are in desperate need of excellent plumbing service at affordable prices.  It is not fair or moral that rich people get all the plumbing services they want in a timely manner while less wealthy Americans must either perform their own work or go without.  The government decrees no plumbing service will cost more than $500.  This means a plumber may charge no more than $500 regardless of the service provided.  The justification for this edict is universal access to plumbing services.  

At first glance this appears a godsend.  The homeowner will never pay more than $500 for any plumbing service. The homeowner fails to realize this does not mean every possible service will cost $500 or less. The plumber must

make a profit to feed his family. This means no solution may be offered that costs the plumber more than $400 to provide.  An entire class of solutions will no longer be offered.  

Assume a new hot water heater is needed.  This is not available as it costs more than $500.  The homeowner begins a series of temporary fixes to the hot water heater until the fixes no longer work  Most homeowners find this untenable.  Soon many homeowners find themselves in similar situations.  Two things begin to happen.  First, an illegal black market develops.  Second, plumbers begin to show more than one repair allowing them to charge a total of greater than $500.  Both of these activities are illegal.  The government counters with criminal sanctions for activity that once was the normal course of business.  Plumbers retire and there are not enough new plumbers to replace them.  An extensive waiting list develops.  The next step is government rationing to control the imbalance between supply and demand the government program created. The government now decides what plumbing system lives or dies.

This example is not far fetched.   The United States saw rationing and pricing during World War II.  Rationing and waiting lists are the inevitable result of government controlled prices. There is no way around this.  Just as the $500 plumbing job created chaos, “affordable” government health care will do the same.  You may not believe this. The sad fact is when it occurs and the reality of medical chaos exists it will be too late.