Lesson: Government can't fix healthcare

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• Why is the government so bad at healthcare?
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• They've been at it for seventy-five years and still can't get it right.
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• It's expensive. Access is spotty.
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• It's mired in bureaucracy. And it's fraught with waste.
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• Obamacare was supposed to fix all this,
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• but instead, like every other government healthcare program before it, it just made things worse.
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• Why? Because the government is a third-party payer.
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• Let me explain. Suppose you are going to buy something for yourself.
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• You have two priorities: price and quality.
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• You want the highest quality for the lowest possible price.
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• Say you're buying a television.
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• You have many options: the size of the screen, the quality of the image, the price.
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• Only you know which one best suits your needs and your budget.
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• And a lot of companies are competing for your business.
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• You do your research; you make your choice.
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• This is called a first-party purchase, the person paying is the person using.
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• Now, let's suppose that either the price or quality is not controlled by you;
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• in this case, you are buying something for someone else.
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• You care about the price because you are paying for it, but you are a little more flexible on the quality.
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• A good example would be a wedding gift, say, a coffee maker.
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• You might think, by the time it breaks they'll forget who gave it to them anyway the cheaper one will be fine.
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• All of us have bought things for others we never would have bought for ourselves.
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• We care about the price because we're paying for it,
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• but not so much about the quality because we're not going to use it.
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• Or, suppose that we're going to use something, but we're not going to pay for it.
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• Then we're concerned about the quality because we're consuming it,
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• but the cost is not as important because we're not paying for it.
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• Any father who ever got roped into paying for an open bar at a wedding understands this program.
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• Nobody ever orders the cheap stuff when it's free.
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• These are called second-party purchases.
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• The person paying is not the person using.
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• And now, for the coup de grace: when it is not your money paying for something, and you don't use it.
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• Then you're not concerned about either the price or the quality.
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• Suppose the boss gives you 150 dollars to buy a door prize for the office party.
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• In a store window, you see a six-foot tall stuffed frog marked 149 dollars You think, Oh, that's perfect, let's buy it.
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• The raffle winner is awarded the six-foot frog. Everyone laughs at the gag.
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• Now, this is called a third-party purchase,
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• a purchase that is made with money that is not yours,
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• therefore you don't care about the cost,
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• to buy something you're not going to consume therefore you don't care about the quality.
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• Here's the point: By definition, all government purchases are third-party purchases.
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• The government spends other people's money on things it won't consume.
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• It doesn't care about the price or the quality.
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• Thus, there will always be waste in government spending.
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• That is why, to paraphrase Abraham Lincoln, government should do only those things that a man can't do better for himself.
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• If 300 million Americans were free to buy health insurance for themselves,
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• just as they buy their own life and home and car insurance,
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• then that little gecko on television would offer us health insurance with a little more coverage for a little less cost.
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• And he wouldn't be the only one.
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• Insurance companies and hospitals would be working night and day to get our business.
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• Quality would go up, and prices would go down.
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• It's already happened with laser eye surgery. It used to cost 2200 dollars per eye.
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• Now it can cost as low as 500 dollars per eye.
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• That's the way free enterprise competition works every time.
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• But when the government gets involved, costs go up, waste and fraud go up,
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• essential medical services are denied or unavailable.
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• These are the hallmarks of government healthcare bureaucracies around the globe.
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• The sooner we make health insurance a first-party purchase again,
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• the sooner Americans will get the health care they want finally.
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