Yesterday we learned that, in order to “stimulate the economy,” the federal government spent millions of dollars buying boiled ham. Pushing back against the public outcry, Secretary of Agriculture Vilsack proudly proclaimed that his department had purchased the ham for the needy, and at $1.50 per pound.
It didn’t take long for people to point out that any shopper could purchase that same ham for (drumroll please) about 79 cents per pound.
So the federal government paid twice the market price for ham, right? No, it’s worse than that.
When you’re buying millions of dollars worth of ham, shouldn’t you be able to negotiate the best possible price? A price lower than the full retail price that any consumer pays at the grocery store? Isn’t it more likely that the Feds paid 3 or 4 times what they should have for boiled ham?
This kind of inefficiency is a defining characteristic of government.
Absent competition and other market incentives to spend wisely and maximize efficiencies, government routinely pays too much for goods and services, and tolerates a level of fraud that would never occur in the private sector.
Which brings us to the current claim that the best way to hold down health care costs is to give government a bigger role and greater control over the health care industry, since it will be able to take advantage of the government’s vast purchasing power and economies of scale.
Right. If you can’t do it with boiled ham, how are you going to be able to do it with radiological services and neurosurgery?
But there is one unique function in our society that government (and only government) wields, and that’s the use of force.
And it’s through the use of force, not through economies of scale, that the Feds will attempt to hold down the growth of health care costs. Force by placing effective price controls on drugs, medical devices and medical services. Force by denying coverage for certain treatments and by denying payments to service providers. The blunt instrument of government force, applied to health care.
Do we really want the people who pay 3x the price of boiled ham, and who have the exclusive right to control prices and put people in jail, running the health care system?