Supply Side Contraceptives – John C. Goodman – Page full

Should we really be insuring items that cost less than $400 per year? Third-party Health Plans in general, and ObamaCare specifically, continually come down on the wrong side of this issue.

Free contraceptives are only one example of how the Obama administration gets it priorities wrong when it comes to health insurance. For example, the Affordable Care At requires employers and insurers to provide a long list of preventive services, such as mammograms, blood pressure screening, cholesterol screening, etc.. And as in the case of contraceptives, the administration Officials have been claiming that the money spent on these procedures will result in overall savings.

Yet here again the evidence says otherwise. Most preventive procedures cause health care spending to go up not down. And while we are spending scarce premium dollars on low-dollar items of sometimes dubious value we are continuing to leave people exposed for large catastrophic costs.

One of the worst examples of getting the priorities wrong is the way ObamaCare changed Medicare. Every senior is now entitled to a free wellness exam of almost no medical value. At the same time, every senior continues to be at risk for tens of thousands of dollars of costs from a prolonged hospitalization.

How do we explain such irrationality? I call it the “politics of medicine.” As reported in a previous Town Hall editorial and in my book, Priceless:

In a typical U.S. insurance pool about 5 percent of enrollees will spend 50 percent of the money. About 10 percent will spend 70 percent. The numbers differ a bit from group to group, but you get the idea: a small number of people spend most of our health care dollars in any given year.

Now suppose you are a Minister of Health. Can you afford to spend half of all health care dollars on 5 percent of the voters? Even if they survive to the next election, they are probably too sick to get to the polls and vote for you anyway! Can you afford to spend virtually nothing on the vast majority of voters just because they happen to be healthy?

The answer is clearly “no.” The inevitable political pressure is to skimp on care for the sick in order to spend on benefits for the healthy. Put differently, the politics of medicine pushes decision makers to underprovide to the sick in order to overprovide to the healthy.

That is why it is easier to see a primary care physician in Britain than it is in the United States, but harder to see a specialist and much harder to access expensive technology. In the 1970s, the British invented the CAT scanner and for a while supplied half the world’s usage probably with government subsidies. But the NHS bought very few CAT scanners for use by British patients. The British also invented renal dialysis along with the United States, but even today Britain has one of the lowest dialysis rates in all of Europe.

via Supply Side Contraceptives – John C. Goodman – Page full.

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