Luigi's murderous accomplice revealed!

(Allegedly)

I’m sure you all heard about the wacko that shot and murdered the CEO of United Health Care on a street in New York City. By all appearances, it was a targeted assassination, and various things about the case point to a killer upset in some way with health care in this country.

When contemplating a motive for such an atrocity, I imagine somebody who has experienced (either directly or with a loved one) some tragic denial of care. Or perhaps somebody saw what “managed care” can look like in this not-even-remotely-free health care system we have in the US.

I can certainly understand someone being furious. But it appears to me that in this case, the rage is horribly misdirected. This CEO isn’t the source of America’s crappy health care system. It’s government intervention that has screwed things up in this field, and has been doing so for over 100 years.

A Free Market? Please.

Over the years, government interventions, both state and federal, have crippled the free market in health care, distorting supply and demand for medical services, disconnecting actors from price signals, limiting competition, and making desired insurance policies literally illegal.

Here’s a very truncated list of interventions in the American health system:

The 1847 creation of the American Medical Association (AMA) began a “guild system” once US states required doctors to be part of the AMA in order to legally work there. This artificially limits supply, drives up costs, and confers financial benefits to guild members.

The 1935 Social Security Act: While primarily known for retirement benefits, this act laid the groundwork for future health insurance programs by establishing the Social Security Administration, which later expanded into health benefits, paid by a 3rd party, the government.

The 1942 Stabilization Act: During World War II, the US government implemented wage and price controls to “combat inflation and stabilize the wartime economy”. The government froze wages, creating shortages in the US labor force. To attract vital workers, employers exploited a loophole in the law by greatly increasing health insurance benefits. Later, in 1954, these benefits were exempted from income and payroll taxes, further entrenching the practice of people linking their health insurance coverage with their job. This intervention is a huge reason why most Americans do not directly pay for their own care, predictably resulting in a lack of price sensitivity and continually rising health care costs.

Post-World War II Insurance Regulation: States began to regulate health insurance more actively, licensing insurance carriers (effectively prohibiting inter-state competition), and requiring them to offer insurance for various favored lobbying interests (dental, vision, contraception, maternal care, hair treatment, mental health, infertility, etc). This removes choice for the customer, and makes illegal the low premium, high deductible “emergency” health insurance policies many people prefer.

Certificate of Need (CON) Requirements: In 1964, New York created a true abomination, being the first to create a CON law. Of all the red tape tying up the market for healthcare, the CON laws might be the most obviously useless. Thirty-four states and the District of Columbia enforce some version, whereby a state board or commission artificially limits the number of hospitals and emergency rooms built or medical devices or services acquired. The problem CON laws seek to solve is too much access, competition, and investment in the healthcare industry. You read that right. In order to build a new hospital (among many other line-items), a competitor must get permission from the current competition. It’s hard to imagine a more corrupt system. Obviously, this limits supply and raises prices, all to the detriment of customers and the benefit of entrenched operators.

The 1965 creation of Medicare and Medicaid: These programs, created under Title XVIII and XIX of the Social Security Act, provide health insurance for the elderly, the disabled, and the poor. These creations greatly increased the amount of US health care was paid for by the government, crippling the power of the price mechanism to control costs.

The 1973 Health Maintenance Organization (HMO) Act: Encouraged the development of the much-hated “managed care” system, further bureaucratizing the US health care system.

The 1986 Emergency Medical Treatment and Active Labor Act (EMTALA): Ensures public access to emergency services regardless of ability to pay, which indirectly impacts how hospitals manage finances and insurance. This massive distortion is a big reason why the “price” charged to uninsured patients is often so ridiculously high. The entire concept of a “price” has been regulated out of existence.

“Obamacare”, the 2010 Patient Protection and Affordable Care Act (ACA): This abomination expanded Medicaid, introduced health insurance exchanges, mandated coverage for pre-existing conditions (belying the entire concept of insurance), and included provisions for subsidies and tax credits to make insurance more affordable. Most famously and perversely, this plan hinged on the “individual mandate”, requiring all people to purchase a health insurance plan or pay a huge fine. When this “lynchpin” was removed in 2017, it predictably resulted in increased premiums. Socialism doesn’t work, folks.

Off the mark, Luigi! (allegedly)

So, while I can sympathize with a person being furious and disgusted by America’s health care system, blaming some CEO of a health insurance company is way off the mark.

With the exception of the crooked lobbyists and bribery experts who use government power to fleece the public, most business operators are as strangled by these government regulations as the rest of us.

People exasperated at our health care system and who want to fix it, need to understand what is the cause, and who is the culprit. It’s government. Until we recognize the cause of the disease, we cannot find a cure.

Naturally,

Adam