Letters to the Editor
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The article about SCHIP has a fundamental flaw in logic
The basic premise of this article is that insurance companies have an incentive to provide as little service at as high a price as possible and that this is somehow unique to insurance. The fact is that ALL businesses have an incentive to provide less at higher prices. However, all customers have an incentive to get as much service for as low a price as possible. Markets resolve this to the satisifaction of both the business and the customer EXCEPT when the customer isn't the one paying. When a third party pays then the customer has an incentive to get as much service as possible regardless of cost and then the payer and the business have the same incentive to provide less service. This is the simple reason that socialism always results in rationing of services by some artbitrary authority in some uninformed way that satisfies no one. We already have a near socialist healthcare system now and that is why costs are always increasing far more than the costs of other types of products.
My standard example is that there is zero problem matching the number of people who want TVs with all sorts of different options to the providers of TVs. America is overflowing with TVs including every so-called poor household in the country (third world citizens risk their lives to be "poor" in America). I have three even after donating two to Goodwill Industries. If only healthcare worked the same way, we would all have easy access to the kind of care we want at prices we are willing to pay even given the fact that some of us are hypochrondiacs and some of us think most doctors are quacks. Insurance is about risk not about service. Once the customer pays for most care and uses insurance only to mitigate risk, costs will come down and care will go up.