I once wrote about how happy one of my mother’s friends should have been when Medicare decided to no longer pay for her B-12 shots, as the private sector would figure out a way to make sure there were no shortages of B-12 injections. Ever.  Central planners, on the other hand, those in medicine in particular, who assign pricing to products and services always get it wrong.  This is the fatal conceit, about which Hayek warned us.  A bureaucrat can never discover a market clearing price (that price at which there are neither surpluses or shortages) because this price must emerge from market interactions, not be imposed on an economy.

Thousands of Medicare patients with cancer are getting their first glimpse of what the death panels will look like.  In this article by Sarah Kliff of the Washington Post, thousands of Medicare patients are reported to have been turned away from their usual cancer treatment centers because the government has decided on a different price these centers are to be paid.  If you guessed that they got it wrong on the low side, you go to the head of the class.

The real story actually has a sinister side.  Kliff touches on it but doesn’t know and probably can’t even imagine the mercenary tactics at work here by the big hospitals and Uncle Sam.   Remember that hospital-employed physicians are paid 40% more by Medicare for the very same service as physicians that are in private practice.  Likewise, hospitals are paid more by Medicare for the administration of chemotherapy than private clinics.  Keep this in mind when you hear some government apparatchik moaning about the impending bankruptcy of Medicare.  These Medicare cuts, affecting only the private clinics, will not only put them out of business, but that is the intent, the goal, the very purpose.

Remember the lesson from Jim Epstein of Reason Magazine:  “industry consolidation is the smoking gun of government corruption.”  Or apply Murray Rothbard’s penetrating question: “cui bono?”…who benefits?  If you said the big hospitals, you get a gold star. 

The short term solution, of course, to save Medicare money on chemotherapy, is to insure that no Medicare patients are treated in a hospital!  This is far too logical, though, and the private clinics don’t have the money to throw at lobbyists that the corporate hospitals do.

This is a great example of Jane Orient’s quote that “coverage doesn’t mean care.”  These thousands of Medicare patients are getting a feel for what this president means by a “right” to health care, aren’t they?  What they really have is a right to hope for chemotherapy.  The current regime doesn’t care if you have “coverage.”  They don’t care if you get care.  What they want is control of your healthcare.  Collecting premiums from the taxpayers while simultaneously denying care is a recipe for a profitable “insurance” enterprise, no?

Welcome to Obamacare.  We haven’t begun to see the worst.  I remain hopeful, however, that this tyranny will usher in a market economy in medical care.  I remain hopeful that rather than be corralled into health camps and clinics, the American people will take matters into their own hands and seek alternative sources of “coverage” and “care.”  These patients with cancer really haven’t been given much choice though, have they?

G. Keith Smith, M.D.