What happens when you fund ‘health care reform’ that pays for 16,000 new IRS agents and zero new physicians or nurses

Orlando Health is preparing for its largest layoff in history; it will eliminate 400 employees in order to save money to comply with ObamaCare.  (Hat tip: Sunshine State Sarah.) Medicaid reimbursements are down 20%, or $15 million.  Medicare, which pays for seniors, will be cut in 2014 – to the tune of $100 billion a year nationwide.  Given that Florida has more than your average number of people age 65 or older, it stands to reason that Florida hospitals will be hit particularly hard by the cuts, which will effect reimbursement rates.

This doesn’t stop people who live in a dream world from not understanding these “unexpected” effects:

Laura Goodhue, executive director of the health-advocacy organization Florida Chain, also questioned whether the layoffs were necessary.

“I’m not sure why they’re having layoffs now. And I’m not sure what they’re referring to in regards to reduced payments,” she said.

“As a result of the Affordable Care Act, more Floridians are going to have health coverage, not fewer, so there will be more paying Floridians in the system,” Goodhue said.

If the government mandated that a grocery store were to give out 10% more food despite stagnant or falling revenues, the stores would cut staff, too.   There’s nothing magical about medical care that makes the laws of economics inapplicable.  You simply cannot pay for ‘free’ medical care for an additional twenty million people, cut Medicare by $100 billion per year, destroy cost-saving measures like FSAs, develop mandatory issuance of insurance (even to those who are already sick), and not have massive price increases and/or layoffs in the medical industry.

Again, ObamaCare pays for sixteen thousand new IRS agents but not a single extra physician or nurse.  It sets up a system wherein almost all medical transactions will be run through an insurance company, thus increasing the cost of care by increasing the transaction costs. This will lead to layoffs and decreased quality of care.

 

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Filed under Economics, Medicare/Medicaid, ObamaCare

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