Published, Friday, June 22, 2012 in Washington Times
By Jane M. Orient, M.D.
When government subsidies collapse, prices will normalize.
People generally don’t recognize a bubble until it bursts. In order to sharpen awareness of our current dilemma, let’s compare the housing market around 2007 with health care now.
Prices are rising with no end in sight. New building projects are everywhere: then, McMansions, now, Walgreens, CVS drugstores and new hospital wings. New job opportunities are opening up: then, in real estate flipping and construction, now, in compliance, health information technology and physician extenders. Stocks are a “buy”: then, those related to the construction industry; now, managed-care cartels and pharmaceutical manufacturers. More and more people are drawn in to exercise their “rights”: then, to homeownership; now, to “health care.” Financial managers draw enormous salaries: then, bank executives and now, hospital and managed-care CEOs.
Behind it all are government subsidies, loan guarantees and regulations to end “disparities” in loan approvals or insurance coverage.
Government spending on health care has increased 5,400 percent since 1970, while total government spending has increased 1,890 percent, writes Dr. Andrew Foy in the summer issue of the Journal of American Physicians and Surgeons. With the federal government already borrowing 40 cents of every dollar it spends, continued inflation of the bubble must stop eventually.
