Collapsing Within ItselfAugust 2014
By William Faloon
Analogizing This To Gas Prices
Just imagine if Exxon® wanted to monopolize the gasoline market and patented a less efficient way of refining crude oil into gasoline.
Then imagine Exxon® funds a fake environmental group to lobby the EPA (Environmental Protection Agency) to ban currently used refining methods. Exxon® would then monopolize the market with its patented refining method and be able to increase the retail price of gasoline from $3 a gallon to let’s say $18—the same 6-fold increase that occurred with albuterol. This would force consumers to spend over $300 to fill their tank.
Since most people cannot afford a $300 gas tank fill, Exxon® would need to emulate pharmaceutical companies and persuade the government to use tax dollars to subsidize their artificially inflated prices. This would force the government to set up a special website to determine which Americans were eligible for gasoline subsidies based on individual income levels.
Do you see what a mess this would create? There is no way that government could afford to subsidize these artificially inflated gas prices, nor could companies do so for their employees or unions for their members. Yet this is exactly what is happening with conventional medical costs. Prices are being corruptly inflated, and all Congress does is bicker as to who is going to pay it.
The harsh fact is that no one can afford to keep paying for something that is corruptly priced far beyond its free-market value. The fallout from this occurs before our eyes with the pending insolvencies of Medicare, Medicaid, municipal health plans, along with large swaths of the American economic landscape including the post office.
This Catastrophe Is Avoidable
Medical care is not a luxury. It becomes a necessity when one falls ill. Medical care is so essential that hundreds of different state and federal government programs have been created to regulate and pay for it.
Yet many of these government programs encourage fraud and force inefficiencies. The end result has become price gouging so severe that medical care has become unaffordable to society as a whole.
By way of example, the average annual cost per household for healthcare is around $20,000.9 The average household, however, does not earn enough to part with $20,000, so no tax and redistribution system is ever going to work in the long run.
Common sense deregulation, on the other hand, would force vast improvements in healthcare while dramatically lowering costs. Compare this to the electronic industry, which has seen exponential technological enhancements, but constantly plummeting prices.
If these kinds of advances had ever been translated to the medical arena, cures for virtually every degenerative disease would likely have already occurred.
Fallacy Of Affordable Care Act
Proponents of government-subsidized healthcare fail to realize the inflationary impact it has on healthcare prices.10-12
When the Medicare Modern-ization and Prescription Drug Act of 2003 was passed, it gave pharmaceutical companies free reign to charge the federal government full retail price on prescription drugs covered by the Act.13 It should be no surprise that the Medicare Modernization and Prescription Drug Act of 2003 was written and pushed into law by pharmaceutical lobbyists.
The Affordable Care Act passed in 2010 is deceptively named. Premiums and co-pays for typical people are high, while annual deductibles are exorbitant.14-16 My private health insurance premium in 1982 was only $780 per year and paid full expenses for any hospital facility I chose in the United States. My deductible was virtually non-existent. The Affordable Care Act restricts where policy holders can get treatment, which can be a problem when a superior therapy is located outside one’s community hospital network.
Under the current so-called “Affordable” Care Act, young people today are paying around $3,000 a year in premiums for basic health insurance and are faced with annual deductibles of over $5,000!17,18 A significant percentage of the population does not have $5,000-$6,000 to cover their annual deductible, meaning the government-mandated insurance premiums they pay are often of little real-world value.
The more accurately defined “Unaffordable Care Act” has spawned fierce debate. When you see politicians attacking each other over how to best fund soaring sick care costs, remember that there is no real-world solution as long as the government grants monopolistic pricing power to conventional medicine. High medical prices would plummet in a deregulated environment, and the need for an “affordable” care act might become obsolete.
What You Can Do
The public is slowly recognizing the disconnection between medical costs and the inflated prices consumers are forced to bear. Media stories exposing over-priced healthcare are seen one day but often forgotten the next.
Politicians act oblivious to medical price gouging and can’t stop arguing about where the money should come from to fund bloated healthcare costs. If Congress just investigated why American medicine is so expensive, they might understand the need to remove archaic regulatory barriers that underlie the problem.
Three years ago, my book Pharmocracy was published for the purpose of exposing the flaws in the current regulatory system that cause healthcare to be so overpriced. I want to encourage members to not waver in this battle and to send a hard copy of Pharmocracy to their Representative and two Senators.
The cover price of Pharmocracy is $24. If members want to purchase three or more copies, we’re reducing it to just $5 per book, which include updates (like reprints of this article).
Rather than sit back and watch our nation financially flounder, I hope enough of our 200,000 members will order at least three copies of Pharmocracy and mail it, with the accompanying updated articles we’ll include, to their Representative and two Senators.
For longer life,
P.S. Turn the page to order three hard copies of Pharmocracy for $5 each—79% off the cover price!
- Available at: http://clearhealthcosts.com/blog/2010/11/the-1481-drug-markup/. Accessed March 10, 2014.
- Available at: http://www.nytimes.com/2013/08/27/health/exploring-salines-secret-costs.html?_r=0. Accessed March 10, 2014.
- Available at: http://www.nytimes.com/2013/10/13/us/the-soaring-cost-of-a-simple-breath.html. Accessed March 10, 2014.
- Available at: http://www.gpo.gov/fdsys/pkg/CHRG-111hhrg50066/html/CHRG-111hhrg50066.htm. Accessed March 10, 2014.
- Available at: http://www.fda.gov/newsevents/newsroom/pressannouncements/ucm371901.htm. Accessed March 11, 2014.
- Available at: http://www.motherjones.com/environment/2011/07/cost-increase-asthma-inhalers-expensive. Accessed March 11, 2014.
- Available at: http://www.motherjones.com/kevin-drum/2013/10/heres-why-your-asthma-inhaler-costs-so-damn-much. Accessed March 11, 2014.
- Available at: http://www.fda.gov/Drugs/ResourcesForYou/Consumers/QuestionsAnswers/ucm077808.htm. Accessed March 11, 2014.
- Available at http://www.money.cnn.com/2012/03/29/pf/healthcare-costs/. Accessed March 11, 2014.
- Available at: http://bastiat.mises.org/2013/12/how-government-regulations-made-healthcare-so-expensive. Accessed June 2, 2014.
- Available at: http://www.safehaven.com/article/32015/the-effect-of-the-affordable-care-act-on-medical-care-inflation. Accessed June 2, 2014.
- Available at:http://www.galen.org/topics/ten-obamacare-predictions-for-2014/ Accessed June 2, 2014.
- Available at: http://abcnews.go.com/Nightline/story?id=128998. Accessed June 2, 2014.
- Available at: http://www.humanevents.com/2014/03/19/obamacare-sticker-shock-get-ready-for-your-jacked-up-premiums-to-double-or-even-triple.Accessed June 2, 2014.
- Available at: http://www.cbsnews.com/news/obamacare-deductibles-deliver-hefty-sticker-shock. Accessed June 2, 2014.
- Available at: http://www.healthpocket.com/healthcare-research/infostat/2014-obamacare-deductible-out-of-pocket-costs. Accessed June 2, 2014.
- Available at: http://www.forbes.com/sites/jeffreydorfman/2013/10/31/the-high-costs-of-obamacare-hit-home-for-the-middle-class. Accessed June 2, 2014.
- Available at: http://www.bloomberg.com/news/2013-11-15/obamacare-deductibles-26-higher-make-cheap-rates-a-risk.html. Accessed June 2, 2014.