Dan Popp
April 17, 2012
Free air
By Dan Popp

I'll admit that I like free air. Who doesn't? You pull into the gas station, find the compressor, inflate your tires to the recommended pressure (thus saving at least one polar bear), and drive off. What's not to like? People resent — I resent — having to insert quarters. "Why do I have to pay for air?"

But as a business guy, I suspect that an air compressor is a fairly expensive piece of equipment. Then there's the electricity to run it, maintenance, the salary of the guy who has to go out and unkink the hose every day. And of course, the highest corporate taxes in the world. All of those costs have to be recovered somehow by the gas station owner. So you can get all the free air you want; but if you'd like that air inside your tires, someone will have to pay to get it there. And that someone is either the person who receives the benefit, or someone who doesn't.

Cost shifting is like air: it's all around us, and it's invisible. Associate Justice Elaina Kagin didn't see it. Regarding Obamacare she said [Warning: do not drink liquids while reading this quote], "Why is a big gift from the Federal Government a matter of coercion? ... It's just a boatload of federal money for you to take and spend on poor people's healthcare. It doesn't sound coercive to me, I have to tell you." Right, Madame Justice, this is what you legal scholars call in Latin, dinero ex nihilo. It didn't come from anywhere. Nobody had that money taken from him so it could be loaded onto the giant Government Love Boat. It just fell out of the free air! No coercion here, I have to tell you.

The uncomfortable truth is that any good you get for free cost someone else something.

Remember that one of the excuses for the Stalinization of healthcare was that poor people are getting "free" care in Emergency Rooms, shifting the costs to other people — and that is something up with which the government simply will not put!

Then the Administration told the Supreme Court that current healthcare cost shifting means that everyone engages in "commerce" in this area, whether they buy anything or not; therefore Congress can regulate that commerce. But stop to think for a moment. Why does a hospital shift costs from poor John to rich Jane when John is treated? Because, the pundits tell us, hospitals are forced by law to treat John for free, so they must overcharge Jane on his behalf. (If, in fact, the hospital recoups those costs via donations there certainly is no problem for the government to "solve.") So the healthcare cost shifting that shocks and appalls the government is caused by the government. One unconstitutional power-grab requires another! The silly dears don't realize that one way to solve the problems of government-induced cost shifting might be to stop doing it.

This is really very simple. When people receive healthcare services, there are only two things that can happen:

A) The patient pays for the services himself. Even the poor person, to whatever extent he can over time, should pay down his own bill. I mean, we have agreed that cost shifting is bad, right? Or,

B) Someone else pays. This is problematic, because cost shifting really does set up bad incentives. Plus it creates market distortions, which make everyone less well off and even less healthy. But I think we would also agree that it's necessary in this case for humanitarian reasons.

So having allowed at least some of option B, there are only two possible ways to shift the costs:

1) Voluntarily, by family members, churches, communities, charities and insurance companies choosing to take on the burden; or,

2) Involuntarily, by government fiat.

The upside-downer's answer is always, always, always B2. Control, compulsion, coercion. The only options he'll consider are the ones in which he wields the government gun. Any solution that does not involve federal force is pooh-poohed as no solution at all. "Private charity" (as if there were any other kind) is unreliable, he says. Insolvent and unsustainable programs rife with "waste, fraud and abuse" are his model of reliability. Perhaps the government should provide all barbarians with a free vacation to Greece.

When it comes to helping sick people, never forget that Christian charity invented the hospital. Congress invented the HMO.

Cost shifting should be avoided whenever possible, no matter how good and right it may feel to get "free air." But when cost shifting is truly necessary, it should always be voluntary. Making it mandatory is wrong. It is evil. And using cost shifting to solve the problem of cost shifting is stupid evil.

© Dan Popp

 

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