Government-generated answers to government-created problems

Clear and Present Dangers: A Conservative View of America's Government.
by M. Stanton Evans (1975)

[page 210] Where price considerations are obscured, demand and resulting costs will skyrocket.

This pattern has been repeatedly shown in studies of health insurance programs, and has become generally acute in the decade [1965-1975] since the Federal government got into the health care business. Our medical economy has steadily shifted away from direct payment by the patient to third-party systems in which someone else picks up the tab. The result has been skyrocketing use of services and facilities.

Between 1965 and 1971, for example, direct payment for medical care increased only from 18.9 to $24.2 billion. Third party payment, however, leaped up from $22 billion to approximately $50 billion--with government outlays almost tripling from $10.8 billion to 28.5. As recently as 1965, more than half our medical outlays were for direct payment; by the early 1970s the proportion was down to slightly more than a third.

As that sequence suggests, the decisive factor was the arrival of Medicare and Medicaid, entitling millions of people to medical care at someone else's expense. An enormous surge of monetary demand was unleashed, crowding in on doctor's time and health facilities.

The double effect was to saddle taxpayers with a staggering bill (up to $25 billion annually) and to push up prices as demand outstripped supply.

[page 215] We confront, in sum, a round-robin of government-generated answers to government-created problems--answers that are, or very shortly will become, considerable problems in themselves.

Where private medicine has been allowed to do its work, the American record has been one of steady and often miraculous improvement; where evils in the system are complained of, we may almost invariably trace them back to one or another species of intervention.

The indicated answer is not to get the government further into medicine, but to get it out--as rapidly as possible.