Obamacare won't create death panels, but will lead to rationing nevertheless

(AP Photo/Jason Reed, pool)

Of all of President Obama's misrepresentations about Obamacare, the one that was most inartfully addressed by his opponents concerns whether bureaucratic death panels will be formed to decide who gets what health care. As he said last night, the president doesn't "plan to set up panels of bureaucrats with the power to kill off senior citizens." As far as I know, no legislative proposal has provided for such.

However, Obama surely knows that even he cannot repeal the basic laws of economics. As John Stossel recently noted in an  article for Reason:

The House bill does deal with the issue. (The Senate Finance Committee bill did until the provision was removed the other day.) Section 1233 amends the Medicare law to add "advance care planning consultation" (counseling about living wills and the like) to the list of reimbursable services... But even if some conservative Republican critics are wrong about Section 1233, there is good reason to worry about Obama's nationalization scheme.

The reason can be found in Econ 101. Medical care doesn't grow on trees. It must be produced by human and physical capital, and those resources are limited. Therefore, if demand for health care services increases—which is Obama's point in extending health insurance—prices must go up. But somehow Obama also promises, "I won't sign a bill that doesn't reduce health care inflation."

This is magical thinking. Obama, talented as he is, can't repeal the laws of supply and demand. Costs are real. If they are incurred, someone has to pay them. But as economist Thomas Sowell points out, politicians can control costs—by refusing to pay for the services.

It's called rationing.

Advocates of nationalization hate that word because it forces them to face an ugly truth. If government pays for more people's health care and wants to control costs, it must limit what we buy…

This brings us back to end-of-life consultation. As the government's health care budget becomes strained, as it must—and, as Obama admits, already is under Medicare—the government will have to cut back on what it lets people have.

So it is not a leap to foresee government limiting health care, especially to people nearing the end of life. Medical "ethicists" have long lamented that too much money is spent futilely in the last several months of life. Are we supposed to believe that the social engineers haven't read their writings? ...

In the end, perhaps the biggest objection to nationalized health care is the "principal-agent problem." For whom does the doctor work? Ordinarily, the doctor is the agent of the patient. But when government signs the checks and orders doctors to reduce spending, it is not crazy to think that this won't influence their "advance care planning consultation."

As I wrote about before, there's a chance this is what's happening in Britain in response to that nation's increase in demand for health care. Despite what the president says, it's extraordinarily likely that it would happen here as well. True, Obama's "new" bill is his bill. But because the public option is still there, so too is the risk.

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For more on Obamacare, check out: Federal government won't waste your money, because Obama said so; Obamacare will insure illegals; The lesson from Britain; and Obama settles 'public option' debate, challenges you to know better

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