Thursday, March 27, 2008

Socialized Medicine - the Dream is Alive

Socialized medicine shares a universal aspect of socialism: The believers in socialism (communism without a KGB) always say it will work if ever it were done properly. The problem isn’t socialism, they say, but the people running it.

However, the true believers in socialized medicine have eyes but will not see, have ears but will not hear. As they speak of the marvels of socialized medicine in Europe, the reality of Europe is quite different.

The population of the European Union is shrinking and aging rapidly, as it also becomes lower skilled and less educated. Europe’s birthrate is below the replacement rate of 2.1 births per female needed to maintain zero population growth, and even Muslim immigration with its higher birthrates is not enough to stabilize its population.

As birthrates fall, longevity rises. A shrinking workforce pays ever-higher taxes to pay the benefits of the rapidly growing elderly and disabled populations.

All of this is playing out to the background music of rapid Islamification of Europe, featuring hoards of uneducated, unskilled, and because of culture and attitudes, virtually unemployable Muslim youth.

But enough of Europe’s problems, which proponents of socialized medicine studiously ignore. We are surrounded right here, in the good old capitalist United States, with classic examples of the failure of socialized medicine. The San Francisco Chronicle chronicled just such failure in a front-page article, “Newsom ready to sue over cuts in Medi-Cal; Reduced payments to doctors would burden city, he says,” March 26, 2008.

Gavin Newsom, San Francisco’s adulterous alcoholic Mayor, who would be governor in 2010, was reacting to a 10 percent reduction in California state reimbursements to doctors who treat Medi-Cal patients, which he called “unconscionable.”

(Medi-Cal is California's medical insurance program for the poor, funded half by the state, and the other half by federal matching funds. The California 10-percent cut will be a “double-whammy,” since the federal contribution will be cut the $567 million no longer required to match state funding. Medi-Cal will cost $38 billion next year and serves 6.7 million patients at an average cost of $5,672 per patient. The 10-percent reduction is only for reimbursements to doctors. If it was against the entire program, it would be $3.8 billion, or 6.7 times greater.)

(Nationally, California is already near the bottom in reimbursing doctors for treating Medi-Cal patients and dead last in how much money it spends per Medi-Cal patient, according to the California Medical Association.)

Call it what you will, Mayor Newsom, but the State of California is in a bad state financially. Its Democrat legislature, and its pseudo-Republican governor, has always spent tax revenues like a New York Mayor patronizing an escort service. However, for many years the buoyant economy and ever-higher property values produced tax revenues almost but not quite faster than they could be squandered.

What happens to all those government services and benefits when the good times stop rolling?

According to Lenny Goldberg, executive director of the California Tax Reform Association of Sacramento, which advocates equitable taxation and is supported by labor and education groups, "We have such an irrational property tax system, we rely on the growing housing market, and then when it levels off, there's an awful lot of schools and services hanging out there."

In other words, when things don’t just keep rising – our “over exuberant” economy stalls – what happens next can be summed up succinctly:


In California’s situation, the “oops” is about a 16-billion shortage of revenues compared to expenses. And it’s really a lot more than that, because California does what other governments all do (and what they don’t allow businesses to do), and ignores its burgeoning unfunded liabilities for future retirees. At a point in the not-too-distant future, this big chicken will come home to roost – it already has in some areas, such as Contra Costa County – and no matter how wonderfully the tax revenues revive, the rapidly growing retirement payments will deplete all other government-funded programs and services.

In particular, Medi-Cal will continue to have growing needs at the same time California will have less funds available for it. Mayor Newsom predicts that “physicians will stop treating Medi-Cal patients altogether and that poor people will be forced to visit hospital emergency rooms for all of their medical care.” Public hospitals, such as the ones funded by the City and County of San Francisco, must accept all patients regardless of whether they have insurance or what kind it is.

The cities, counties, states, and federal government, of course, are all in the same pickle of falling tax revenues, and all of them have based their spending programs on the assumption of ever-growing tax revenues.

Nowhere in any government plans are there provisions for temporary or permanent setbacks such as recessions, shrinking and aging populations, lower property transfers or values, or reduced benefits or public services.

Indeed, even as one system after another fails or approaches failure, there is a clamor for more of the same, and failing programs such as socialized medicine or social security are held up as examples of what we should have, or need more of.

It’s like we’re watching a train speeding down a track that we know is broken ahead, and we’re all congratulating ourselves for building a faster train. In a way, it makes sense. Without a real disaster, a world-class train wreck, we’ll do what Americans all do when faced with a problem. We’ll tinker it to death. We won’t do something new, big, visionary, or least of all, something that will effectively solve the problem.

We’ll do what we did to “reform” or “simplify” the Internal Revenue Service. We’ll add hundreds of new regulations, not get rid of any of the old ones, and just more deeply entrench the status quo.

I can hear Congress now: “They want reform? We’ll give them reform! Then they’ll learn to stop moaning and whining about reform, and keep their mouths shut!”

Still, Americans continue to ask, nay demand, that government do more of everything. Americans are like the socialists. It’s not a problem with the system, is just that the system hasn’t been done right yet.

In the meantime, be careful what you wish for, because sometimes wishes come true.

The Six Miracles of Socialism

There is no unemployment, but nobody works.

No one works, but everyone receives wages.

All get wages, but nothing can be bought with them.

Nothing is purchased, but everybody owns everything.

Everybody owns everything, but they are all dissatisfied.

All are dissatisfied, but everyone votes for the system.

(Purloined from Osmica Magazine, Yugoslavia, via Herb Caen’s column in the San Francisco Chronicle, over a decade ago, and probably more like two decades ago.)

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