ObamaCare is simply too complex to be successfully instituted by mere mortal men

There is a reason those famous Soviet Union five-year plans never quite worked out. It is the same reason the 2,700-page ObamaCare law will collapse like a house of cards, no matter what the Supreme Court does.

As L. Gordon Crovitz points out in an excellent and perceptive commentary in today’s Wall Street Journal (not behind the online pay wall the last time I checked), there is a logical reason Justices Antonin Scalia and Stephen Breyer questioned the complexity of the law.

L. Gordon Crovitz

Scalia asked the government’s attorney, “Mr. Kneedler, what happened to the Eighth Amendment? You really want us to go through these 2,700 pages? (Laughter.) And do you really expect the Court to do that? Or do you expect us to — to give this function to our law clerks?
Is this not totally unrealistic? That we are going to go through this enormous bill item by item and decide each one?”

Of this complexity, Crovitz observes:

“Perhaps ObamaCare will be remembered as the breaking point for top-down planning. There is not enough information available for the government to micromanage a system as complex as health care, which represents more than 15% of the economy. Austrian economist Friedrich Hayek wrote some 50 years ago about the ‘pretence of knowledge,’ meaning the conceit that planners could know enough about complex markets to dictate how they operate. He warned against ‘the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess.'”

Actually this Washington-based “pretence of knowledge” conceit is not limited to just ObamaCare. The same lofty concept of central planning is being displayed by the administration’s meddling in the power industry, trying to manipulate the market to suit its “green energy” agenda.

I also quoted Hayek talking about this in a blog posting this past July on Harry Reid’s multi-year plan for electric power generation.

Planning is a necessary aspect of life and society, Hayek concedes in his book “The Road to Serfdom,” in which he writes, “The question is whether we should create conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully; or whether we should direct and organize all economic activities according to a ‘blue-print,’ that is, ‘consciously direct the resources of society to conform to the planners’ particular views of who should have what.’”

F.A. Hayek

I then observed, “Aren’t we fortunate to have Harry and Barack to tell us what electricity to buy. When the price skyrockets, it is for our own good and the good of the planet. Same for health insurance.”

Considering Obama’s recent chastising of the court following those hearings on ObamaCare, one might call Hayek prescient when he wrote, “Public criticism or even expressions of doubt must be suppressed because they tend to weaken support of the regime. As Sidney and Beatrice Webb report of the position in every Russian enterprise: ‘Whilst the work is in progress, any public expression of doubt that the plan will be successful is an act of disloyalty and even of treachery because of its possible effect on the will and efforts of the rest of the staff.’”

Crovitz goes on to point out that part of the problem we now face is due to the inertia created in WWII by wage controls. As I noted in a recent reply on a blog posting, “Health insurance should never have been linked to employment in the first place. But during WWII wage freezes made fringe benefits one of the few ways to attract the best workers. Give all families an income tax deduction for health insurance. Then it would be portable.”

That was the “original sin,” according to Crovitz. “The federal government let employers avoid wage controls by adding health insurance as an untaxed benefit for employees. Employer-provided insurance has since insulated most Americans from the cost of care. The predictable result is endless demand for increasingly inefficient services.”

Crovitz asks, when was the last time you saw prices posted in a doctor’s office? The lack of information about cost and the lack of need to even concern oneself with cost throws the market off kilter.

A free market in which people can freely exchange goods in a manner satisfactory to both, leaves individuals free. It fosters innovation. Government control through planning and regulations is incompatible with personal and political freedom and leads inexorably to serfdom. Mainly because it drowns innovation in its infancy. The central planners are never innovators.

40 comments on “ObamaCare is simply too complex to be successfully instituted by mere mortal men

  1. nyp10025 says:

    I would be happy to replace the system of tax credits for employer-provided health insurance with a single system that provided universal coverage. Simply make Medicare available to everyone. Or expand the superb VA care system to cover everyone.
    But the idea that the problem with our healthcare system is that Sherman Frederick could not easily bargain with his surgeons over the cost of his heart bypass surgery is nuts.

  2. John Tobin says:

    You are wrong! Equal dignities attach here. An unworkable law is a perfect project for an inept government.

  3. VA is excellent? Ask a few vets.

    ________________________________

  4. I think you are being redundant, John.

    ________________________________

  5. nyp10025 says:

    By the way, readers of this blog might be surprised to know that Hayek was in favor of government-supported universal health insurance:

    “Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong… Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make the provision for the consequences, such communal action should undoubtedly be taken,”

  6. Speaking of being complex AND expensive … http://thehill.com/blogs/healthwatch/health-reform-implementation/220475-white-house-has-diverted-500m-to-irs-to-implement-health-law

    “The Obama administration is quietly diverting roughly $500 million to the IRS to help implement the president’s healthcare law.

    “The money is only part of the IRS’s total implementation spending, and it is being provided outside the normal appropriations process.”

    Outside the normal process? He can’t wait for Congress to act. King George the III was less autocratic.

  7. Helping to organize, not usurp, Petey.

    ________________________________

  8. nyp10025 says:

    So we agree that Hayek was in favor of the government organizing a comprehensive system of social insurance.
    Perhaps he would favor a system in which the government did not take over all healthcare systems, the way the UK system generally does. We can stipulate that Hayek would likely prefer a system based on private doctors, private hospitals, and private insurance companies. One in which the government’s role was limited to making sure that the insurance policies were simple, fair and available to all. One in which people and small businesses that had trouble affording insurance received assistance, perhaps in the form of tax credits. One in which “free riders” were discouraged through tax penalties on those who thought they could wait until they had an emergency before getting coverage.

    Sounds a lot like ObamneyCare. But as long as we agree that the government should organize a system of social insurance that is comprehensive, I’m generally OK with whatever one comes up with.

  9. nyp10025 says:

    By the way, the money for the IRS is provided for in the ObamneyCare law. No need for a separate appropriation. Which is why, notwithstanding the bluster, no one is challenging Obama’s use of the funds.
    And much of the money will be spent administering tax credits to small businesses that provide insurance to their employees and to individuals who need assistance affording health insurance.

  10. vclayson@cox.,et says:

    Great article, Mr. Mitchell, but you have stepped on a liberal’s toes. Obama sure has a fan in the person of nyp10025, one that sees only good in the so-called Obamacare mandate. Never mind the expense to taxpayers and the loss of free choice, never mind that the aged get shorted because their treatment is based on economic factors rather than life sustaining care. Never mind that Medicare and Medicaid are barely hanging on financially, surely a medical care plan that is much larger and more expensive will succeed where they, Medicare and Medicaid, have become a burden too expensive to maintain.

  11. nyp10025 says:

    So you are in favor of cutting Medicare.

  12. ObamaCare already cut half a trillion. It needs to be restructed.

    ________________________________

  13. nyp10025 says:

    That is not from Medicare benefits, but from reimbursement rates for the terribly wasteful Medicare Advantage program. In fact, the law specifies that no cuts may be made in Medicare benefits.

    But put that tiny detail aside: by how much does Mr. Clayson wish to cut Medicare?

  14. Steve says:

    I spend quite a bit of time taking my wife to doctors. For several things. I have good employer provided insurance.

    I see price lists showing up in some doctors offices. Annual costs and side costs. Cash discounts too. Doctors are getting very worried about this new law and some are readying themselves for out of network services now. I would provide one of the names and even a picture of the sign but it may cause a backlash the doctor might not like. He does not have a website.

    As for prices, that is ridiculous. I have to match the EOB’s with the office bills by date and service provided because in every case except one nothing else matches. Once that is done then we have to correct the copay amounts. Its a constant headache and if you thing think a central bureaucracy is going to make this better you are really blind to government paper trails, or maybe you really like them. Maybe your job relies on government inefficiency. But nyp more government is not the answer, it is usually the way to make the problem worse.

    June.

    Then November.

  15. nyp10025 says:

    So:
    1. What Steve calls “good employer-provided insurance” is actually a “constant headache” because “nothing matches.” Therefore, private insurance is superior to government-provided insurance. Forgive me if I fail to follow the logic.
    2. When you join Medicare (assuming it is still around after the Republicans take over) you will find the payment system much easier than what you are experiencing with private insurance companies, whose financial goal is to pay out as little in medical claims as possible.
    3. Mr. Mitchell says that it is a good thing for doctors to post prices in their offices. “Steve” thinks it is a bad practice, which, inexplicably, he blames on ObamneyCare.
    4. I wonder how often “Steve” uses these price lists in his doctors’ offices for the purpose of bargaining over the cost of his and his wife’s medical care. Perhaps they should follow Sue Lowden’s advice and offer to barter some livestock.

  16. Steve says:

    So
    1: lets stop putting spins on what I say. Nothing matches because the providers dont match it. The providers have the claim numbers from the insurance they just wont use them. If I don’t check this I would get screwed. Government wont fix that and I challenge you to find anything in this new law that does.

    2 private insurers do that in an attempt to hold costs down, medicare is heading for a clif so it simply refuses to pay and Doctors start looking for other means.

    3 show me where I ststed pricing is “bad practice” I stated this doctor advertises this only in the office, has no website and I have not his permission to spread it around on forums such as these or I would do so.

    4 Since I have insurance I do not use these prices to barter, I dont need to. There are plenty of people in Summerlin that do pay for this service its better than insurance for them, they do have catastrophic coverage. I guess you would call them one percenters.

    nyp called himself one of the ruling class so does that mean I should call him a one percenter? Stop being a mobius circle sir.

  17. Steve says:

    Steve is my first name nyp. No need for quotes.

  18. nyp10025 says:

    You are free to call me a “1 percenter,” or whatever else you wish.

  19. Steve says:

    I call you nyp because that is what you use for a call sign. I guess its stands for New York Pete.
    I know a Pete from Utica. He shows himself as a Liberal Democrat. I consider him a long time friend because he is one. Poitics does not stand in the way.

    I made that remark to show you I am not spinning your words, though I could. Thing is that would do no good at all.

    So have you found anything in Øcare that corrects the EOB claim number trouble I mentioned?

  20. nyp10025 says:

    Nope. Since you already have employer-based insurance, your relationship with your insurance company isn’t likely to change very much. However, you will find that more preventative services will come without co-pays. And, if you or your wife suffer an expensive illness or accident, your policy will not have a lifetime limit on benefits.

  21. Steve says:

    Again, not the insurance, its the providers that do not refer to the claims properly. The providers make the claims then when they try to bill me the providers do not refer to the claims they made. The insurance company is easy to work with the providers are not.

    Yeah I know about those provisions in the law as it stands today, some goodies prior to the other shoes.

    So, again, what does this new law do to help with the provider billing departments?

  22. nyp10025 says:

    Again, probably not. There will be a lot of important improvements in moving towards electronic medical records, but it won’t make your insurance EOB any easier.

  23. Steve says:

    Again not the insurance. The provider. The INSURANCE COMPANY IS VERY EASY TO WORK WITH.

    IT IS THE PROVIDERS THAT ARE HARD TO WORK WITH.

    THE EOB IS EASY TO UNDERSTAND AND CLEAR AS WELL. THE SERVICE PROVIDERS BILLS ARE ALL DIFFERENT AND NONE OF THEM REFER TO THE CLAIMS THEY HAVE MADE WITH THE INSURANCE COMPANY.

    OK!???

    Now try again, will anything in this law fix the problem with service providers billing departments?

    I dislike making this conclusion because you have not made a clear answer, you keep refering to the insurance company. But I am going to have to conclude you cannot find anything in the law that corrects billing practices of health care providers.

  24. Rincon says:

    I would like to ask a couple of questions that have been bugging me for some time now. True or false: The U.S. spends approximatly 16% of it’s GDP on health care. This is 30% more than the next higher spender, which spends about 12%. At the same time, 25 or so countries have citizens that live longer than Americans. If true, it seems that we’re not getting much bang for our buck – or is this false?

  25. Steve says:

    Citizens that live longer than US citizens. Those countries do not include premature births that fail in their stats. This makes it appear as though the US has a lower life expectancy. Also We spend lots more on extending life and this effects the cost issue as many of those countires won’t pay for proceedures they say will only lengthen life a short while. I posted some examples a while back but they were called anecdotal by another poster on this site.

    Stats can be made to appear to mean almost anything one wants them to.

    Just apply the mobius circle to the spin and anything you want will pop out.

  26. Athos says:

    Interesting posts, Steve. petey, you’re either a world class moron, or part of the ruling class. I think I used to characterize you as DCpetey.

    Medicare fraud, anyone? Hospitals bill the government to pay for the services of seniors. So a senior goes to the hospital, is admitted for a week and dies. Hospital adminstration sees a perfect opportunity to recoup revenue by over billing by a factor of 10. Taxpayer pays (or more acurately, China bond holders!)

    Who checks on that? And if you want to fix how employer’s structure pay, after you eliminate the nontaxable medical policies, how about eliminating the matching FICA? Let employees pay the full tax quarterly, like the rest of us.

    Maybe there won’t be as many “Where’s my free lunch?” Americans if they see just how much of THEIR money goes to that cesspool in DC.

  27. nyp10025 says:

    to “rincon”: the answers to your rhetorical questions are all true. We have a hugely inefficient system that does not deliver much bang for the buck.
    to “athos”: I would prefer that you think of me as part of the ruling class.
    to steve: As I said above, if your doctor is improperly characterizing the treatments you and your wife are receiving on your bills, ObamneyCare will not improve the quality of the Explanations of Benefits you receive from your insurance company. However, since the law will contain incentives to make the insurance administrative process more efficient, your insurer might take steps to correct what your doc is doing.
    As far as comparisons to other countries are concerned, the accepted academic studies all accounts for the various factors you cite, and yet still conclude that the quality of US healthcare lags that of our industrialized peers. Measuring healthcare quality if difficult. However, it is not true that statistics can be spun indefinitely and that truth cannot be ascertained.

  28. I believe I’ve seen similar figures, but you seem to be assuming a correlation between spending and longevity. We also have more lawyers than any other country and our lifestyles aren’t all that healthy.

  29. nyp10025 says:

    Absolutely right that there is no unbreakable correlation between spending and either longevity or what the medical-industrial complex calls “positive health outcomes.” We spend much more per person than any other country, but can’t say that we get better overall care.
    And that spending is a killer. As Ezra Klein has noted, “In 2009, Americans spent $7,960 per person on health care. Our neighbors in Canada spent $4,808. The Germans spent $4,218. The French, $3,978. If we had the per-person costs of any of those countries, America’s deficits would vanish. Workers would have much more money in their pockets. Our economy would grow more quickly, as our exports would be more competitive.”

  30. Steve says:

    So this new law does nothing to correct the current and well documented overbilling by hospitals and doctors. You just hope the insurance company will make the hospitals and doctors fix it.

    Overbilling into the billions BTW. Good thing I balance my easy to read EOB’s with those decidedly non standard office bills.
    Approx 2500 pages, it had to be passed to see whats in it and nothing in it takes any action on this at all.
    Another great reason it will not see any changes between now and 2014, right?

  31. nyp10025 says:

    So you think your doctor is deliberately overbilling?

  32. Steve says:

    Please stop the spin. Search it for yourself. It is clear from my comment I think its industry wide and clear from your answer the new law does nothing to correct it.

  33. Steve says:

    OFF TOPIC

    Search for this headline.

    Coal exports surge to highest level since 1991

  34. nyp10025 says:

    There are lots of problems in life that ObamneyCare does not correct. If anyone wants to suggest amendments to the law that would reduce the amount of over billing by doctors, feel free to do so.

  35. Steve says:

    Start over. It was all one sided.

  36. […] Recall how Justices Antonin Scalia and Stephen Breyer complained about this in oral arguments two weeks ago. […]

  37. Athos says:

    Get the government out of the health care industry.

  38. nyp10025 says:

    to “athos” – 1) Bryer did not complain; 2) I am surprised that you wish to repeal the laws that forced hospitals to treat you when you were sick and did not have the money (or insurance) to pay for your healthcare.

  39. Rincon says:

    At least 25 other nations do a demonstrably* better job than we do at keeping their populations healthy and all spend 30-50% less per person. In the last 20 years, the Democrats have tried to shove two major health care proposals down our throats. During that same time, the Republicans have done……what? Where are Republican answers to fix a system that provides second rate care at astronomical prices?

    *greater longevity and lower infant mortality

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