Thursday, December 24, 2009

Special Deals With the Regulators

Many people are upset about the special deals worked stuffed into the Senate Health Care bill to buy votes in the last minute legislative push.

Sadly, these special deals seem to exist in most modern level at both the state and federal level. In most cases the deals pass trhough the system with little scrutiny.

State governments and other local authorities have been regulating insurance since the inception of insurance. These regulatory bodies invariably have special deals which favor companies with inside connections. Insurance is very complex and a favor might appear to be something benign, or even progressive, but the advantages are there. The advantages usually create the dyanamic where the group receiving the favor ends up dominating the local market.

The ugly sausage making process that we saw taking place in Congress this holiday season took place in all of the local regulatory efforts.

Insurance is currently regulated. The regulations came through processes like the one that we just saw on national TV. The regulatory process invariably creates an uneven playing field which favors some constituents over others. It is the regulation process that leads to the monopolies and to the inequitable distribution of care.

Unfortunately, the federal regulation of health care is unlikely to make any improvements. What's likely to happen with the new Federal regulation is that there will now be two layers of regulation competing for influence in matters of local health care. There will be state and local regulators in conflict with federal regulators and power players diverting health care funds back and forth as they compete for influence.

If we want to break the inequities of our health care system, we need to move away from the insurance paradigm to a self-funded paradigm ... like the Medical Savings and Loan.

1 comment:

Scott Hinrichs said...

Statists have an amazing faith in the ability of this scandalous system to somehow "do the right thing."