Joseph Lawler has a short piece in the American Spectator’s Spectacle blog on how Massachusetts is proposing to fix the nasty problem of rising prices under RomneyCare:
From the Boston Globe:
BOSTON—A special commission charged with studying rising health care costs in Massachusetts is recommending the creation of an independent oversight panel to identify acceptable and unacceptable reasons for price variations in care based on which hospital or doctor is used.
The Special Commission on Provider Price Reform was created by lawmaker last year. It also recommends that state regulators be given the authority to settle price disputes between insurers and health care providers if the cost of a medical procedure exceeds the market-based median.
So, Romneycare is proving to be too expensive. And the fix is a panel of unelected experts intervening in private transactions.
A quick trip over to the Concise Encyclopedia of Economics tells you (if you didn’t already know) what happens when governments attempt to control the prices of things that should be left to the market (my bold emphasis):
The reason most economists are skeptical about pricecontrols is that they distort the allocation of resources. To paraphrase a remark by Milton Friedman, economists may not know much, but they do know how to produce a shortage or surplus. Price ceilings, which prevent prices from exceeding a certain maximum, cause shortages. Price floors, which prohibit prices below a certain minimum, cause surpluses, at least for a time. Suppose that the supply and demand for wheat flour are balanced at the current price, and that the government then fixes a lower maximum price. The supply of flour will decrease, but the demand for it will increase. The result will be excess demand and empty shelves. Although some consumers will be lucky enough to purchase flour at the lower price, others will be forced to do without.
Because controls prevent the price system from rationing the available supply, some other mechanism must take its place. A queue, once a familiar sight in the controlled economies of Eastern Europe, is one possibility. When the United States set maximum prices for gasoline in 1973 and 1979, dealers sold gas on a first-come-first-served basis, and drivers had to wait in long lines to buy gasoline, receiving in the process a taste of life in the Soviet Union. The true price of gasoline, which included both the cash paid and the time spent waiting in line, was often higher than it would have been if the pricehad not been controlled.
Did you catch that last part? When price controls subvert the price system for rationing available supply, queues take its place. In other words, get ready to start waiting in line for the dwindling supply of medical services (in Massachusetts, and all of America if ObamaCare is left to stand).
