Politics & Health Care in Illinois: “Even Crooks are Appalled”

I feel a little lazy going after such low-hanging blog-fruit as Gov. Blagojevich, but as long as he refuses to give up command of the good ship Illinois, I suppose he’s fair game.

Yesterday’s Wall Street Journal ran a guest column by Chicagoan and NPR radio-man, Scott Simon, noting that “even Chicago’s crooks are appalled” by Gov. Blagojevich shaking down a kids’ hospital. The governor allegedly threatened to block an $8 million reimbursement from the state unless the Children’s Memorial Hospital ponied up $50,000 to his campaign.

But let’s face it, Mr. Blagojevich is an “exceptional” example, to put it mildly. Those of us who want the government to give us back our health care dollars and let us decide how to spend them can’t rely on a poster-boy like this hitting the headlines every few months.

Instead, we’ve got to show how even well-meaning politicians and public servants cause harm when they interfere in the people’s health care. Even when they’re not bad folks, they have neither adequate information nor appropriate incentives to get it right.

An unrelated story in the same edition related the story of Chicago’s Mount Sinai Hospital. There’s no mention of corruption, just the troubles of a relatively small, non-profit hospital with a social mission. Unfortunately, Mt. Sinai’s non-profit (and therefore tax-free) status depends on government agents demanding evidence that it provides “enough” charitable care to avoid dunning by the Illinois or federal tax-man – imposing a bureaucratic burden on the facility.

Furthermore, the state’s Medicaid program (which usually underpays) provides perverse incentives for acute care, where preventive care is more appropriate. Medicaid pays a higher fee for treating asthmatic children who show up in the ER, but Mt. Sinai thinks its better to employ educators who teach asthmatic children to self-treat properly, reducing the risk of having to rush to the ER.

As well, the Medicaid payments are perversely designed so that the wealthy University of Chicago Hospitals (recent employer of Michelle Obama, whose last reported salary was $317,000) got paid more than Mt. Sinai!

All of these policies were imposed by politicians and public servants who thought that they solved problems. Unfortunately, they created unintended consequences and harmed the community.

The solution is to leave the money in the community, where the government cannot abuse it. We shouldn’t need a crooked governor to learn that lesson.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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