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RUSH: Health care news. Two stories. First from the AP, and it is from yesterday, by Ricardo Alonso-Zaldivar. “Obama Plan for Health Care Quality Dealt a Setback — President Barack Obama’s main idea for getting quality health care at less cost was in jeopardy Wednesday after key medical providers called his administration’s initial blueprint so complex it’s unworkable.” That’s not news. We’ve known that since before it was signed into law. The whole thing’s unworkable. The story is, that’s by design. It is designed to be unworkable so that the private sector element in health care goes out of business. The design of Obamacare is to in 10, 15 years have everybody have to go to government for health care.

“Just over a month ago, the administration released long-awaited draft regulations for ‘accountable care organizations,’ networks of doctors and hospitals that would collaborate to keep Medicare patients healthier and share in the savings with taxpayers. Obama’s health care overhaul law envisioned quickly setting up hundreds of such networks around the county to lead a bottom-up reform of America’s bloated health care system. But in an unusual rebuke, an umbrella group representing premier organizations such as the Mayo Clinic wrote the administration Wednesday saying that more than 90 percent of its members would not participate, because the rules as written are so onerous it would be nearly impossible for them to succeed.” Well, duh. That’s by design.

“‘It’s not just a simple tweak, it’s a significant change that needs to be made,’ said Donald Fisher, president of the American Medical Group Association, which represents nearly 400 large medical groups around the country providing care for roughly 1 in 3 Americans. Its members, including the Cleveland Clinic, Intermountain Healthcare in Utah, and Geisinger Health System in Pennsylvania, had been seen as the vanguard for accountable care. The medical groups say they are worried they will be left holding the bag for losses, that the government has designed things so there is no easy way to tell which patients are part of the program, and that there’s no reliable way to adjust for patients who are sicker and require closer follow-up and more expensive treatments.” It really is true, how complicated they’ve made this. It’s a maze that people have to go through here just for the simplest treatment.

“Many in the health care industry were silent partners backing Obama’s overhaul law, but disappointment over the accountable care rules has put a chill into the relationship.” This is the kind of stuff that just makes me want to pull my hair out. Before this law was signed into effect we’re sitting here and we’re warning everybody this is exactly what’s going to happen. You are signing on to and supporting a recipe for your own demise. Don’t you see it? Don’t you see that that’s what’s planned? The whole purpose of Obamacare is to make everything so complicated and so frustrated that there really is no improvement in anything that you scrap it and replace it with what? Single payer, government health care. That’s always been the objective, and so now, Obama’s main idea for getting quality health care at less cost in jeopardy after key medical providers called his regime’s blueprint so complex it’s unworkable.

I find it hard to believe that these smart people couldn’t see this before it was implemented. It’s all there on paper. For crying out loud, something that takes 2,000 pages to explain and that nobody’s read, wouldn’t it be quite natural to assume there’s big trouble lurking in the middle of that? This is the kind of stuff, I don’t know, I wonder about people who are supposedly smart that get caught up in all this. I’ve never intellectually understood why anybody in the private sector medical business had anything to do with this health care plan, other than fear, you know, the regime reaches out to you and sort of like a mob protection racket, if you don’t get involved — he-he-he — wait ’til you see what we do to you. And that probably is the only explanation. But now it’s so bad that they can’t even carry on the illusion. They can’t even follow through on the pretense. It’s just unworkable.

I went back, we have a story from Real Clear Markets, their website from February 26th of 2010, a little over a year ago. One of the solutions that I, a relative nobody, I’m not a health care expert, all I know is how to get sick and how to get well; other than that, I don’t know much — but one thing I’ve always understood in explaining the problem with the health care system is that the costs have no relationship whatsoever to the customer or the patient’s ability to pay, and that anywhere else in our system that would spell doom. For example, if hotel rooms were priced with no regard for what people could pay, there would be no hotel business. Automobiles, whatever it is. Food. And yet over here, standing alone by itself is this industry we call health care, and over there the prices have nothing to do whatsoever with the simple sustaining element of private sector free markets, and that’s the profit motive. The profit motive doesn’t exist.

The profit motive, by that I mean you price a service, or a product, whatever, in such a way that you earn money in the end, you earn a profit while people who buy it benefit profoundly from it. If that doesn’t happen your service or your product don’t survive. And the market rules. But nobody in their right mind would design a product and bring it to market without one shred of concern over whether or not prospective customers could afford it. Yet in health care, whether or not somebody can afford it is irrelevant. It doesn’t matter.

It’s a big bugaboo of mine. I’ve always said the cure to this problem, the solution to spiraling out of control health care costs lies in health savings accounts, vouchers, what have you. You put the patient, the customer back in charge with what he’s getting, you make the patient or the customer, whatever, have to pay and let him shop like happens for any other product, and the competition, even in health care, will see to it that prices are met with the ability of everybody involved to pay and everybody involved being able to earn a profit in a normal, everyday — the catastrophic’s a whole different thing. You do need a separate system to handle catastrophic circumstances, just as you would need a special circumstance to handle people who want to buy $500,000 cars. But it’s such a unique and rare thing, you wouldn’t have a major primary system built around that circumstance. But health care is.

Health care is built around the fact nobody can afford it. So it has no prayer. And that’s why you see these stories, the main idea for getting quality health at less cost in jeopardy because providers called the regime’s blueprint so complex it’s unworkable? Well, if the key medical providers had to price their service in such a way that people could afford it, you’d have a whole different circumstance. Imagine if we needed hotel insurance, for example, or pick any other product. You need the government coming in or somebody essentially buying it for you. That business would not last long. Health care does, for one reason, ’cause it represents the best single opportunity for Marxists and socialists to control people’s lives, and any other issue out there.

This story from Real Clear Markets is actually an opinion piece written by a doctor, David Gratzer, senior fellow, Manhattan Institute, the author of, “Why Obama’s Government Takeover of Health Care Will Be a Disaster.” Let me cut to the chase here. “But the problem with American health care isn’t greed, its structural. After all, food and clothing are all organized with the profit motive — and the President isn’t giving speeches that your butcher is too greedy or that Macy’s is overly concerned with the bottom line. The problem, ultimately, is 12.” The number 12 is the problem. I will ‘splain when we come back.


RUSH: “American health care…” this according to Dr. David Gratzer: “American health care is an accidental system. Private coverage — the type most Americans have — has its origins in the wage controls of the Second World War as employers offered rich health-insurance benefits in pre-tax dollars. Public coverage like Medicaid and Medicare, on the other hand, takes its inspiration from the Beveridge report in Britain, drafted in the early 1940s; Lord William Beveridge believed in zero-dollar health care — that people ought to pay nothing at the point of use.

“Today’s American health care fuses these two systems, but with a common economic flaw: people are overinsured, paying pennies directly on every dollar of health service they receive. The end result: for every dollar spent on health care in the United States, just 12 cents comes out of the individuals’ pockets. Imagine what food costs might be if your employer paid 88% of your grocery bill or what a trip to Saks [Fifth Avenue] might be like if your company covered the vast majority of the costs of the shopping spree.” They’d go through the roof, right? If you go out and you could get primo stuff at Saks or go to the grocery store and buy whatever you wanted and you’re only paying 12 cents of every dollar, what’s to stop you?

By the way, it’s the same theory with lowering tax rates. If you lower tax rates, you’ll report more dollars of income and go to town. But in this case, when you’re only paying 12 cents of every dollar in your own health care, you don’t care what it costs — except now it’s gotten so expensive that even the 12 cents out of every dollar can break your bank. Stop and think of it that way. On average, we only spend 12 cents out of every dollar, and we still can’t afford it! This is unsustainable — and “Barack Hussein Obama! Mmm! Mmm! Mmm!”

Little “Barry Soetoro,” he understands it. Far from addressing the 12 cent problem, Obamacare would exacerbate it. With its rich subsidies, expansion of government programs, insistence that all insurance cover specific services (and some with no copayments at all), Obamacare would pour fuel on the fire of health inflation. It’s one reason that even the chief actuary of the Centers for Medicare and Medicaid Services — a federal employee — predicts cost rises under the President’s plan,” which, by the way, this is a column from 12 or 14 months ago and costs are rising. People need waivers; they’re bumping out. It is an absolute disaster, my friends. We knew it before it happened.


RUSH: Now, a couple more things on this 12% business and why it’s bad. Some people might think, “Hey, that’s a deal! I’m only spending 12 cents of what my health care costs are?” You ought to be saying, “I’m only spending 12 cents and they’re this high?” Here’s where we are. Of many problems, this is one rather simple way of explaining it: Medical costs are based on the assumption that insurance companies are only gonna pay a percentage of the price. So, because of that belief, doctors and hospitals jack up the price in an effort to get something close to their cost from the insurance company, but people without insurance sometimes have to pay those same prices.

Now, for example, if the cost of a Band-Aid — and I’m just gonna make you people some numbers here to use. If the cost of a Band-Aid is a dollar, but insurance company is only going to pay 80 cents of that, then the hospital will jack up the cost of the Band-Aid to a buck and a half so that whatever insurance pays gets close to the real cost — and that just starts a cycle. They’re based on the assumption that insurance companies are only gonna pay a percentage of the price. So you jack the cost of so that whatever percentage they pay pretty much covers your cost, and maybe a little profit. Now, the origin of health care benefits (and Dr. Gratzer talked about it here), started in World War II, but our health care system today is in a botched circumstance because of an unintended consequence of what people thought was a great thing at the time.

Employers only offered health care benefits because, in World War II, FDR froze wages; and the only way employers could compete for good workers — and they needed them. They needed all kinds of people to work, but for certain jobs, really qualified people were needed. There’s a wage freeze. So there was competition for competent workforce people. So what happened was, employers started offering health care benefits as an incentive, ’cause they couldn’t jack up the wages. This is why wage and price controls never work.

Even though there was a control on the wage, they found a way to increase the wage by calling it something else — in this case the health care benefit — and it really started with General Motors and the UAW, the United Auto Workers. They were building tanks at the time, and it turned out to be an unintended consequence. General Motors and the UAW are a perfect example of what a big mistake it was, and everybody knows (most everybody knows) that withholding began in World War II, but so did the whole notion of pretax health care benefits because of wage controls. If there hadn’t been wage controls, who knows? We might not have ever had the concept evolve of pretax health care benefits.

We can’t say for sure because circumstances later on after World War II might have resulted in the same thing. But it was an unintended consequence. So the governor comes along and tells an employer, “You can’t pay more than this,” but there’s a competition for good workers so they had to come up with enticements, and health care was it, and, voila! Expansion out of control, and this is where we are — to the point now that 12 cents of every dollar spent on health care is actually spent by the patient. Now, I’m telling you: There is no way it’s ever gonna make sense — there’s no way costs are ever gonna be brought down — unless that ratio changes. It’s just that simple, and there’s not one thing in Obamacare that changes the ratio. It makes it worse, all by design.


RUSH: Quickly, for those of you in the audience who are of Hispanic origin and very upset at Obama for not focusing on amnesty and immigration first. If he would have focused on amnesty for 20 million illegals and the costs involved there, he woulda never gotten health care passed. So you just weren’t as important as Obamacare. It’s just dollars and cents. It’s really no more complicated than that.


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