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July 27, 2007

It's the Little Things

If you want to find out what's really going on, ignore the front pages. Turn instead to page B37, where the little land mines being buried by the Beltway geniuses are noted for the record, and for the amusement of such antisocial types as, well, the Beltway writ large, which believes with all its heart and soul---or as much heart and soul as it actually can muster---that the economy, the Nation, the Planet simply cannot be saved unless others are forced to sacrifice.

So what is it this time? Well, the health care legislation introduced on Wednesday in the House Energy and Commerce Committee has a provision (Section 651) prohibiting doctors from referring patients to hospitals in which they have an ownership interest.

This stroke of genius, you see, purportedly will prevent conflicts of interest. Or something. Au contraire, my friends: It will prevent physicians from diversifying their activities in a world in which they face price controls at every turn, thus reducing the long run provision of medical services. And the conflict-of-interest argument is simply wrong: Uncompetitive prices at the hospital will reduce earnings at the pre-hospital stage of physician service, because it is the package of medical services that patients actually are buying, either directly or through third-party payment. Do the politicians actually not understand something so straightforward? Well, apparently not. They must read the front pages.

Posted by Benjamin Zycher at July 27, 2007 08:47 PM


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