Health Care Corporatism Arrives
In the past few months, Americans have seen their government essentially seize control of one sector of the economy after another. Federal authorities now tell the automobile, banking, credit card, and insurance industries what products and services to offer, all while hiring and firing industry executives in order to implement government orders.
Health care represents the latest frontier in this drive to centrally manage the American economy. Yesterday, the country's major health care producers, including insurance companies, hospital and physician organizations, pharmaceutical companies, and health care labor unions, promised President Barack Obama they would reduce the growth rate of their future incomes by 1.5 percent over the next ten years. If those cuts actually happened, it would mean that in 2019 health care costs (both government and patient) would be $700 billion lower than current projections, reducing health care spending by $2 trillion over the next ten years.
Why would the industry agree to this preemptive surrender? Because it means the end of competition. Under the proposed agreement, the government would guarantee a certain level of profit for each health care producer. From the industry's point of view, the goal is to get a seat at the table as politicians and government technocrats "reform" health care--which means it will decide who the winners and losers will be.