Saturday, October 30, 2010

Mortgage meltdown or medicine meltdown?

As we enter the final phases of the election cycle you can get a good idea of the spoils of big government just by looking at the rhetoric in the campaign.

Clearly, one issue is dominating the election this fall: the economy, and more specifically the lack of jobs.

So I would like to pose a few questions and ideas on just how government actually performs in creating economic growth and in kick starting job growth. I don't necessarily have the answers, but I'm real good at asking questions.

Did government assisted mortgages help the economy? Certainly by artificially lowering mortgage rates and the creation of investor owned, government back sub-prime mortgage equities, the federal system of assistance in home buying has become the norm.

But given the meltdown in the mortgage industry, did we do a service to Americans by putting people in homes they couldn't afford? Flipping houses became the source for a evening cable television show and the folly of many particularly young home buyers.

As liquidity in the mortgage market disappeared so did the dreams and savings of many Americans -- including those that had invested in the "government" back equities of Fannie Mae and Freddie Mac.

Is government funded healthcare going to be beneficial for our country in the long term? Just like mortgages, are we going to put our country into a health system they can't afford?

Out current federal health legislation creates "coverage" for 85% of our citizens, but does nothing to promote access to care or an improvement in health care choices.

The latter is particularly concerning.

Regardless of the life style choices one makes, there is a guarantee of coverage. There certainly needed to be an improvement in health care services for the uninsured, and there needed to be some limitations on the growth in spending, but wouldn't it have been better to put incentives on the user?

The real question becomes: will we be facing a health care meltdown just like the mortgage industry? As the requirements for health care services rise, there being no limitations on cost, and no impediments to limiting health care decisions, can the system continue to function?

The biggest concern here is whether physicians and other health care industry providers (pharmaceutical companies, insurance companies, hospitals) can continue to function in an economic environment of continued declining reimbursement for services.

This is especially true given the proposed 23%+ cut in Medicare rates next month with more to follow in January.

Will there be a decline in health care liquidity?

Physicians and other health care providers may find themselves in a situation much like the mortgage industry: servicing consumers with health care services they and the government really can't afford.

I guess the real question is will there be a foreclosure on your new sub-prime health coverage?

- Posted using BlogPress from my iPad

No comments:

Post a Comment