Australian Election - Latest Bribes
Why "Free " Health Care Isn't Free
It might seem somewhat churlish of me to pick on a policy announced by the Australian Labour party at a time when so-called conservative administrations are spending money like the proverbial "drunken sailor" (i.e. Bush in the USA with record deficits and Howard in Australia going for the record in election giveaways). However, the policy promising free hospital care to the over-75s is irresponsible in the extreme.
Firstly, one of the problems with "free" health care of any sort, is that the removal of the price mechanism opens the floodgates to an almost inexhaustible demand. This is one of the main reasons why pretty much every public health system sees costs escalate way beyond what was expected and why they become a black hole sucking in funds.
Secondly, already the biggest strain on public finances in the coming years will be pensions and health care costs arising from the ageing population. This policy simply adds fuel to the flames!
Like all government spending, socialised health care is inherently wasteful and results in a misallocation of resources. By coincidence, today's "Sydney Morning Herald" carried an article entitled "Make Medicare's billions work for the sick, not for the doctors".
"A wrong-headed funding regime is keeping doctors out of general practice and rural areas, writes John Ferguson."
The article talks about how it's more lucrative for doctors to go into such areas as cardiology rather than general practice because Medicare pays more for cutting people up rather than keeping them well. No surprise that when bureaucrats decide on resource allocation, rather than leaving it to the market, we get these sorts of problems.
It might seem somewhat churlish of me to pick on a policy announced by the Australian Labour party at a time when so-called conservative administrations are spending money like the proverbial "drunken sailor" (i.e. Bush in the USA with record deficits and Howard in Australia going for the record in election giveaways). However, the policy promising free hospital care to the over-75s is irresponsible in the extreme.
Firstly, one of the problems with "free" health care of any sort, is that the removal of the price mechanism opens the floodgates to an almost inexhaustible demand. This is one of the main reasons why pretty much every public health system sees costs escalate way beyond what was expected and why they become a black hole sucking in funds.
Secondly, already the biggest strain on public finances in the coming years will be pensions and health care costs arising from the ageing population. This policy simply adds fuel to the flames!
Like all government spending, socialised health care is inherently wasteful and results in a misallocation of resources. By coincidence, today's "Sydney Morning Herald" carried an article entitled "Make Medicare's billions work for the sick, not for the doctors".
"A wrong-headed funding regime is keeping doctors out of general practice and rural areas, writes John Ferguson."
The article talks about how it's more lucrative for doctors to go into such areas as cardiology rather than general practice because Medicare pays more for cutting people up rather than keeping them well. No surprise that when bureaucrats decide on resource allocation, rather than leaving it to the market, we get these sorts of problems.
posted by Kevin Francis at
8:08 pm
