Deval Patrick vs. reality

What to do when confronted with increasing health care costs? Ban them!

Governor Deval Patrick is seeking sweeping authority to review and reject rates charged by hospitals, physician groups, medical imaging centers, and insurers, in a broad new effort to make health care more affordable, particularly for smaller companies and their workers.

A 40-page bill filed by the governor yesterday proposes to give the insurance commissioner the power to essentially cap health care price increases.

Rates hospitals and other health providers charge insurers would be “presumptively disapproved as excessive’’ if they increased faster than the level of medical inflation, and they could be rejected after a public hearing.

Similarly, for health insurance plans sold to employers with 50 or fewer workers, premium increases that exceed one and a half times the level of medical inflation would be considered excessive and could be turned down.

This is a failure not only of Massachusetts' health care reform which expands the role of government (basically the prototype for ObamaCare) but also econ 101. Costs and prices don't appear out of thin air or at the whim of business owners, they are a reflection of the use of scarce resources. Rather than attempting to understand why price increases are occurring, however, Gov. Patrick would prefer to simply ban them and continue with business as usual.

See these related posts: Shooting the messenger and Legislating away our problems.