Why Obamacare Will Be No More Successful Than Soviet Central Planning

Markets find ways to make things better and cheaper. Obamacare often forbids that.


Most Americans -- even those who are legislators -- know very little about the details of President Obama's Affordable Care Act, so-called Obamacare. Next year, when it goes into effect, we will learn the hard way.

Many people lazily assume that the law will do roughly what it promises: give insurance to the uninsured and lower the cost of health care by limiting spending on dubious procedures.

Don't count on it.

wstera2 / photo on flickr

Consider just the complexity: The act itself is more than 906 pages long, and again and again in those 906 pages are the words, "the Secretary shall promulgate regulations …"

"Secretary" refers to Secretary of Health and Human Services Kathleen Sebelius. Her minions have been busy. They've already added 20,000 pages of rules. They form a stack 7 feet high, and more are to come.

Our old health care system was already a bureaucratic and regulatory nightmare. It had 16,000 different codes for different ailments. Under our new, "improved" system, there will be more than a 100,000.

Government likes to think regulations can account for every possibility. Injured at a chicken coop? The code for that will be Y9272. Fall at an art gallery? That means you are a Y92250. There are three different codes for walking into a lamppost -- depending on how often you've walked into lampposts. This is supposed to give government a more precise way to reimburse doctors for treating people and alert us to surges in injuries that might inspire further regulation.

On Government-Planned World, this makes sense. But it will be no more successful than Soviet central planning.

Compare all that to a tiny part of American medicine that is still free-market: Lasik eye surgery.

Its quality has improved, while costs dropped 25 percent. Lasik (and cosmetic surgery) are specialties that provide a better consumer experience because they are a market. Patients pay directly, so doctors innovate constantly to please them. Lasik doctors even give patients their cellphone numbers.

President Obama didn't kill American free-market health care. It began dying during World War II, when government imposed wage and price controls. At first, companies said, "Great, stability!" But then they realized that they could not attract better workers without raises. So companies got around the rules, as companies do. They gave "benefits," like health insurance.

Government then distorted the market further by giving employer-based health insurance better tax treatment than coverage you buy yourself.

But employer-based insurance is nuts. Many workers feel locked into their jobs. Company insurance largely destroyed the health care free market, since employees rarely shop for the best service at the lowest price.

Now Obamacare may kill what's left of that market.

Maybe we will soon be like Canada, where some people wait years for treatment. A producer from my TV show went to a Canadian town where the town clerk pulls names out of a box and then phones people to say: "Congratulations! You get to see a doctor this month!"

But there is at least one area where Canada offers cutting-edge, life-saving technologies. Unfortunately, to get this care, you have to meow or bark. Veterinary care is still handled by the market. Providers innovate or go out of business.

Markets find ways to make things better and cheaper. Obamacare often forbids that. For example, it requires that every insurance policy cover preventive care and "breastfeeding support." It insists that mammograms and colonoscopies be provided without any deductible.

It's tempting to believe that such rules prevent illness and save money, but there is little evidence they will. Some people will undergo invasive procedures that shorten lives instead of extending them. Some of us want those tests; some don't. Government controlled medicine means we all get them and pay for them, regardless of whether we want them. Government control kills consumer choice.

Lucky Lasik and cosmetic surgery patients! Their treatments are better in part because government doesn't consider them important enough to subsidize and regulate. If only government would neglect the rest of health care! Then we'd have better service and better care at lower cost.

And we'd have choices.

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  1. In Soviet Russia, government markets YOU!

  2. In Obamacare, free market kill you.

      1. Whaaat a country!

        *laugh like a donkey braying*


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  3. Also, "Congratulations! You get to see a doctor this month!"

    Heh heh. "You get to see the doctor this month!" "But I don't NEED to." "Still - you'd better go - you might not get to see him again for...years!"

    Also, this brings to mind Shirley Jackson's "Lottery" for some reason.

    In Soviet Canada, town clerk picks YOU!

    1. I just found out while shopping for health plans for my employees that the government forces me into an "all or nothing" deal. That is, if I have 10 employees all must buy into a basic option. I have three who are interested but the other seven don't want it.

      It's quite the annoying problem.

      It's for the children I guess.

  4. I mean, that was like a long time ago and stuff, you know? The Soviet Union and stuff. A lot has happened since then. Color television, cell phones. We're totally smarter as a society. We'll get it right. After all, we are the ones we have been waiting for. And stuff.

    1. HopeNchange.

  5. Chicken coops? Lamp posts? Seriously? Why?

    1. Accident prone farmers.

    2. If there isn't a code for getting injured by a chicken coop in an art gallery mounted on a lamp post then this administration still isn't serious about health care.

    3. That's not even close to the stupidist code. Try V91.07 Burn due to water-skis on fire.

      1. I googled this just to assure myself that you were joking. You weren't, unless that web site is the most elaborate practical joke ever concocted.

        1. Oh it gets better. Look at this site:


          Burn due to water-skis on fire
          Has 3 sub-codes:
          initial encounter
          subsequent encounter

          So not only is there a "Burn due to water-skis on fire", but there's a sub-code for multiple encounters. Which should at that point qualify you as the unluckiest person on the planet.

          Also check out some of the other codes:
          V91.04Burn due to sailboat on fire
          V91.05Burn due to canoe or kayak on fire
          V91.06Burn due to (nonpowered) inflatable craft on fire
          V91.08Burn due to other unpowered watercraft on fire
          V91.09Burn due to unspecified watercraft on fire
          V91.35Hit or struck by falling object due to accident to canoe or kayak

          Healthcare utopia is just around the corner.

          1. This is insane, to be sure, but I think that "initial encounter" means first doctor visit and "subsequent encounter" means later doctor visit.

            1. Naw, man, first the waterski caught fire and I fell off. Then I had to climb back on and ride back to shore.

    4. I suspect that there is an "Other" code that a plurality of accidents will be charged to.

  6. Several years ago, my wife was injured, but at first we both thought it didn't need medical attention. The next morning, it was obvious it did and we immediately went to the medical office and got care.
    In discussing it with a doctor who is from Canada, he said you'd never wait to see there, you'd go immediately.
    Why? Well, if you do need any sort of specialty care, you've established your place in the queue. So it is self-defeating, encouraging people who might well not need care to seek it anyway.

    1. Sevo, I don't get your story. Was he saying in Canada you wouldn't wait?

      1. I think he means that going right away, even if you don't think you need help, will get you a place in line. So if your condition gets worse over time, you might actually get to be seen.

  7. As I've always said, our health is too important to leave to the government.

    1. As I've always said, our health is too important to leave to the government.

      Well I'd say your screwed then.

  8. I remember back in the 1990s when there was a push for government health care, one of the big cries was that medical insurance bureaucracy was too intrusive, medicine needed to be between a doctor & a patient. So much for that.

    There was a forum here when Obamacare went thru Congress and all the lefty panelists made comments along the lines of "it's ridiculous to think you can run healthcare without a bureaucracy."

    We're not moving goalposts, we're uprooting them and placing them in a different reality.

  9. I remember a bumper sticker going around in 2007 while Obama was campaigning and everybody had that tingly feeling between their legs for him. It had a picture of a homeless guy who was asking for "Change". It's hard to realize people actually thought Obama was going to help everybody. It's even harder to realize people still think that. (shudders)

    1. Obama was the savior in 2008 because Bush was a disaster; has everyone forgotten that? His self-annointed successor was a cranky old fart backed up by a dingbat mayor who couldn't even answer a question about what she read.

      Obama spoke complete sentences, voted against raising the debt ceiling, and said all the right things about ending the two wars, closing Gitmo, ending the war on medical marijuana, fiscal responsibility, all sorts of things.

      Is it any wonder Obama was elected?

      Unfortunately all his idiots choose to remain deluded about his Changes becase Hope.

      1. His rhetoric on all the free shit he was going to give out and his votes for the bailouts and stimulus sort of belied his promises of fiscal responsibility. And he never campaigned on ending the Afghanistan war. In fact, he ran on expanding "the good war" in Afghanistan by consolidating resources from Iraq, which was already scheduled to wind down anyway. The fact that everybody thought he was running on ending the Afghanistan war is a good indication of how far up their asses Americans had their collective heads.

        1. President Obomba: "Give me my wars of necessity (all over the world) and I'll give you your 'gimmes'!"

          They do and he does.

    2. You were great in Munich.

  10. Many people lazily assume that the law will do roughly what it promises: give insurance to the uninsured and lower the cost of health care by limiting spending on dubious procedures.

    Without tort reform, the chance of that ever happening was exactly zero. The driver of those "dubious procedures" was always defensive medicine. If doctors are going to be exposed to massive litigation risk without the ability to offset the likelihood of its occurrence, the only rational response would be for malpractice insurers to raise their premiums for any doctor dealing with such policies.

    1. Although my doctor, and a number of studies, say that malpractice insurance isn't as big a deal as people think. The big problem is that fear of malpractice suits are one of the main reasons doctors & hospitals run so many "unnecessary" tests.

      1. I thought it was so that they could bill for each test run.

        1. Except how often are the doctors administering the tests (and presumably billing for them) the same doctors prescribing the tests. That seems pretty rare to me. Also, most doctors I run across have a pretty significant backlog. Volume work isn't really much necessary.

      2. That's sort of my point. The "dubious procedures" are defensive medicine to avoid malpractice suits.

        1. OK, got it. Sorry, misunderstood at first.

  11. *facepalm*

    Reason editors need to learn their Greek History. They've misused the caduceus here--which belonged to Hermes and is a symbol for commerce and merchants--when they meant to use the Rod of Asclepius, who was the Greek god of medicine.

    If you mean mean medicine: one rod, one snake, no wings.

    Or is getting it right asking too much?

    1. Better not tell the Army Medical Corps.


  12. It's great that there's someone like Stossel voicing anything other than hard statist ideology in MSM, but this piece is fairly disingenuous.

    The system he's describing (ICD-10-CM) has been on the table for years, and it's equally arbitrary and arcane predecessor (ICD-9-CM) has been employed in this country by healthcare providers and their partners for almost 35 years.

    1. From the Federal Register, January 16, 2009:

      In the August 22, 2008 proposed rule (73 FR 49799), we discussed the shortcomings of ICD?9?CM. The ICD?9?CM code set is 29 years old, its approximately 16,000 procedure and diagnosis codes are insufficient to continue to allow for the addition of new codes, and, because it cannot accommodate new procedures, its capacity as a fully functioning code set is diminished. Many chapters of ICD?9?CM are full, and in others the hierarchical structure of the ICD?9?CM procedure code set is compromised. This means that some chapters can no longer accommodate new codes, so any additional codes must be assigned to other, topically unrelated chapters (for example, inserting a heart procedure code in the eye chapter of the code set). The ICD?9?CM code set was never designed to provide the increased level of detail needed to support emerging needs, such as biosurveillance and pay-for-performance programs (P4P), also known as value-based purchasing or competitive purchasing. For a detailed discussion of the shortcomings of the ICD?9?CM code set, please refer to the August 22, 2008 proposed rule (75 FR 49799).

    2. Ultimately, it's a codeset that acts as a guideline for a database of patient condition evaluations, more relevant to the healthcare industry's software vendors than anyone else.

      Moreover, it's disappointing to see an argument on Reason that amounts to little more than a weak appeal to emotion. Just as any number of gun control proposals being bandied about would do nothing (retroactively or in future) to prevent a prospective Adam Lanza from killing whomever he wants, even a full repeal of ACA would have fuck all impact on ICD-10 implementation.

      1. Did you read the whole article? He doesn't blame the whole thing on Obamacare.

      2. I think the intended point of that portion was to demonstrate how absurdly bureaucratized the health care industry has become. It's worth mentioning that the quasi-private health insurance industry adopted that coding system due to, and bases its reimbursement rates on, the government's use of the system to control medical costs in the public system.

  13. "Many people lazily assume that the law will do roughly what it promises: give insurance to the uninsured and lower the cost of health care by limiting spending on dubious procedures."

    It's FREE UNIVERSAL Healthcare! That means it's FREE for EVERYBODY! Don't question it, it's FREE! Don't worry about how it's going to sustain itself, it's FREE! Why would you be so STUPID to oppose something that's FREE, stupid?!


    1. Well, the reason people think that is basically every other 1st world (and many 3rd world) country in the world pays much less per citizen for health care and yet has universal health care.

      I don't have health insurance myself and I can't afford to go to a doctor out of my own pocket, so I haven't been to a doctor in 20+ years.

      But I don't need to, being healthy for the most part.

      OTOH, my mother who had health insurance, needed a bypass operation and then got cancer. She received absolutely horrible treatment, despite having insurance. I do not see how it could possibly be worse in other countries. Our health system is just a disaster, and Obamacare will make it much worse, but I think we don't realize how bad it is to begin with.

      1. To the extent that the American system is a piece of shit, it is largely owing to existing interferences and restrictions in the health care market, which was really the point of the piece. People like to contrast Obamacare with the system that predated it as if the existing system was some sort of laissez faire free market when it was nothing of the kind.

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  15. "Why Obamacare Will Be No More Successful Than Soviet Central Planning"

    Au contraire. The Soviets were far more competent than the vast majority of Obamatons, and they understood the theoretical model for what they were doing.

    Except for a very small minority, the Obamatons are utterly clueless. The clued-in minority know that ObamaCare was designed to fail. Its failure is a feature, not a bug, and is designed to usher in either single payer or a state-run medical system.

    1. Kind of makes you wonder why more Democrats didn't get behind Dennis Kucinich's single-payer legislation, which he said was very close to what the Nixon administration had proposed.

      1. Political expediency. Obamacare was short on public support, and to this day divides people roughly evenly. Full-retard NHS style socialized health care wasn't quite ready for primetime here in the states. By the time Obamacare has blown up, it will be more than ready, politically, to accept it.

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  17. "the Secretary shall promulgate regulations ..."

    I do hope the Repubs are making plans for the regulations their Secretary will promulgate.

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