What's So Bad About Death Panels Anyway?

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As the public debate over pending healthcare legislation veers into the surreal with angry voters who have never read the bill shouting at cowering Congressmen who have never read the bill, are you amused or frightened to see the debate becoming ever more shrill?

Lock 300 million people in a room, tell them that there is only a fixed amount of oxygen to go around, and have radio and TV personalities scream at them about the worsening air crisis. Then stand back and watch how ugly the national conversation gets.

"Explain this to me again," asks the earnest young man. "You're going to take money that was supposed to pay for my kid's braces and instead spend it tube feeding some demented, bed-ridden 95 year old grandma who's been sucking on Social Security for 30 years so she can have an expensive surgical procedure designed to keep her consuming even more of our country's limited healthcare budget?"

Bring on the Death Panel!

Death Panel deniers are shocked at the accusation that cost controls will inevitably dictate end-of-life care, currently hoovering down 27% of the Medicare budget. At the same time they're claiming that reforms will magically save money and reduce the federal deficit while extending coverage to 47 million new lives. Given Congress's track record with every other thing they've touched, is it any wonder that some people are bit skeptical?

It's tough sewing the seeds of zero-sum economics then trying to hide from the logical consequences. If the nation's medical care pie is only so big and too expensive as it is, and you're determined to give every citizen a slice regardless of ability to pay, then everybody's pie slice on average has to get smaller. Any third grader can puzzle this out. Furthermore, if we're all going to be forced to eat from the same pie, someone has to dish out the helpings. And let's face it, grandma already ate her share!

The only way to avoid this fate is to pursue economic policies that are not zero-sum, allowing for outcomes that are not one-size-fits-all. This is an alien concept to central planners despite the fact that most markets do perfectly fine relying on supply and demand to set prices. The individual choices of every consumer do the rationing and the pie grows bigger as competitive innovation drives the cost per slice down. True, not everyone is guaranteed a bite, at least initially, and some do go hungry. But in the long run it's amazing how effective this approach has been at spreading all sorts of pies around, from PCs to package delivery.

For better or worse we abandoned this approach to healthcare in the 1960s when LBJ got Congress to "take care of some doctor bills" for needy seniors. What we are witnessing today is the inexorable logic of the Great Society coming full circle. Some celebrate it, others fear it, but there is no doubt that when the process reaches the logical conclusion that Barack Obama called for back when he was a humble state senator free to speak his mind, we will end up with a comprehensive single-payer government run health plan.

Mixed solutions "half slave and half free" are neither economically nor politically stable. When the final solution arrives the pharmaceutical industry will be effectively nationalized by the monopsony purchasing power of the government, private insurance companies will voluntarily leave the healthcare field seeking profits elsewhere, employer-paid health plans will disappear as surely as defined-benefit pensions, medical R&D will be conducted only in not-for-profit government labs and universities, most doctors will be civil servants, and yes Ms. Pelosi - panels of experts will most certainly decide who gets what kind of care when and how. And every time young people ride a bus they're going to glower at old people knowing what a fat hunk of their paychecks it takes to keep granny around breathing their air.

This won't happen overnight and the rich will always have the means to seek the services they want even if it means flying to India to get a hip replacement, the way Canadians do when they get tired of sitting on waiting lists. But let's not fool ourselves into thinking that somehow we can escape this destiny. In every other developed democracy the voters have eventually delivered themselves and their neighbors into healthcare collectivism where each is treated according to his needs paid for by others according to their ability. If by some miracle it doesn't happen now, it will happen during Chelsea Clinton's presidency. What else do you think the words "everyone has a right to health care" can possibly mean?

Bill Frezza is a fellow at the Competitive Enterprise Institute, and a Boston-based venture capitalist. You can find all of his columns, TV, and radio interviews here.  If you would like to have his weekly columns delivered to you by e-mail, click here or follow him on Twitter @BillFrezza.

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