first piece of legislation that put health care on a slippery slope
began in the depths of the Great Depression with the McGarron-Ferguson
Act which allowed the insurance companies to exchange information and
act as a cartel. Followed on the heels was the Hill-Burton Act, in the
1950s, which created over-capacity, and then a series of entitlement
programs out of the Great Society programs of the 1960s, including
Medicare and Medicaid.
The net effect of nearly 20 pieces of legislation has been:
1. To allow concentrations of power amongst financial intermediaries--insurance companies;
2. To make the federal government and its proxy, the states, into the largest payor;
3. To disconnect demand from supply through the excessive use of financial intermediaries;
To allow the use of prospective payment, price fixing, negotiations and
cost shifting to destroy normal market-based price setting behavior.
sum total effect has been to precipitate a cascade of unintended
consequences, leading to hyper-inflation, thus justifying financial
intermediaries and the federal government-as-payor to take even more
draconian measures, thus, setting off another round of ill-effects.
must assume a new role and that is as an agent of empowerment, rather
than as regulator. It must insist that the playing field be level, that
financial intermediaries are kept in their place, and that the players
from both the supply and demand side are playing by a set of rules.
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