Health Care Update

There is so much going in the health care debate it is almost impossible to keep track of it all....

President Obama is facing strong headwinds for his vision of health care reform. Americans are overwhelmingly against a public option and in many other ways against other portions of Obama's proposal like an individual mandate. The President has been addressing Congress and the American people trying to sell his ideas. He has even signaled a willingness to consider other proposals as becomes clearer that the public option may lack the votes to pass. For more on Obama's willingness to deal click here.

Recently Representative Joe Wilson shouted out to President Obama "You lie!" during an address to a joint session of Congress. The remark has been decried by both sides of the aisle as unprofessional and inappropriate prompting Representative Wilson to apologize. While I admit it was somewhat rude I am glad that someone is willing to tell the truth in the open. I think it's high time we put some of the political etiquette away and just got down to business.

One of the biggest reasons the democrats claim we need a pubic health care option is to infuse competition into the health care system and drive down prices. If only it were that simple! Our current system is a hodgepodge of government regulation and private industry that will distort any free market policies or approaches. Also, health care is not a traditional type of service, as an economist would say it is not exactly a normal good. What this means in practice is that purchasing decisions and supply decisions are not as straightforward for health care as say for oil changes, hair cuts, clothes, and the like. Why because health care is complicated and most consumers have very limited information upon which to base their decisions because they are not - well doctors. This means that simply adding more competition doesn't always result in lower prices. Take the Dallas area as an example. The Dallas Morning News recently ran an article that shows how health care in Dallas is very expensive when compared to the rest of the country despite the fact that there is a lot of competition. The article touches on some of the reasons behind this. The simple fact of the matter is that we cannot solve a problem as complex as health care by simply adding more insurance options.

Here's a good one...Under one version of the health care package working its way through Congress all individuals would be required to buy health care or pay a fine through higher income taxes. If you don't well they'll just throw you in jail where the health care is free! Anyone see a flaw here?