[Vision Thing]

Last year, Massachusetts passed a prematurely-celebrated health care initiative entitled "Commonwealth Care" that provided state-subsidized coverage and required all residents to purchase insurance. State residents who fail to obtain insurance are penalized with additional state taxes. The law also required employers to either pay for health insurance or cough up a hefty tax penalty for each employee that they cannot cover.

Anyone who has passed Econ 101 could have predicted what would happen next, but it nevertheless caught government bureaucrats by surprise.

Across the state, primary care providers are now turning away patients, and waiting times have lengthened because physicians receive below-market payments along with an influx of new patients. Thus, Massachusetts bureaucrats are learning a lesson that even Communist bloc countries learned decades ago: when government social planners artificially increase demand and reduce supply via price controls and rationing, shortages and inferior quality quickly follow.

I'm still agnostic over Mitt Romney, but this part of the article is not good news for him, because he was partly responsible for Commonwealth Care. I'm sure his people will blame it on the Democrat state congress who partnered with him on this program.

On another note, I've got one little quibble with the author's logic in the following sentence: ". . . waiting times have lengthened because physicians receive below-market payments along with an influx of new patients." Below-market payments do not result in longer waiting times. Instead, I'd say that the influx of new patients is the only cause for the new delays.

[pnh102]

Below-market payments do not result in longer waiting times.

Consider this angle. If a doctor in a socialized healthcare system knows that he is not going to be properly compensated for the work that he does, then that doctor has no real incentive to offer his services. This doctor might move to another state which would allow for him to make more money, or he might decide that being a doctor where he is now isn't the best of jobs and might consider another career choice instead. Either way, that is one less doctor providing medical service. Even if the number of patients stayed the same, with fewer doctors, delays would have to go up because there are fewer doctors to treat patients.

[gridlock]

Below-market payments do not result in longer waiting times. Instead, I'd say that the influx of new patients is the only cause for the new delays.

If the payments were not held artificially low (below market), the influx of new patients would create a shortage, which would bid up prices, which would result in a increase in services as doctors relocate to Massachusetts to reap the windfall.

By holding prices low, there is no reason for any doctor to move to Massachusetts. In fact, there is a perverse insentive to relocate from the state, thus reducing supply and creating even more of a backlog.