Despite Sen. John McCain’s (R-AZ) claim that Gov. Sarah Palin (R-AK) “will help me reform Washington,” Palin’s adherence to a rigid conservative ideology that treats health care like any other commodity will only drive-up health care costs.
While governor Palin led an effort to repeal Certificate of Need laws, (CON) — “a regulatory process that requires certain health care providers to obtain state approval before offering certain new or expanded service.” As the National Council of State Legislatures points out, “the basic assumption underlying CON regulation is that excess capacity (in the form of facility overbuilding) directly results in health care price inflation”:
When a hospital cannot fill its beds, fixed costs must be met through higher charges for the beds that are used. Bigger institutions have bigger costs, so CON supporters say it makes sense to limit facilities to building only enough capacity to meet actual needs.
Palin argued that CON programs have failed to “lower costs for the consumer”:
But after much consideration, we believe that the program has not accomplished what it set out ultimately to do more than 30 years ago — lower costs for the consumer. It is time to end Alaska’s program in its present form. Doing so will not only reduce the cost of health care, it will also improve the access to health care, allow more competition and improve quality of care for patients.
But as Joe Padula points out over at Managed Care Matters, Palin has “no clue what she’s talking about.” In fact, a study of the health care costs of the big three automakers concluded that “CON states have lower health care costs than non-CON states”:
Like many conservatives, Palin assumes that increasing the number of hospital beds will lower health care costs. But “health care is not like any other good or service.” Indeed, “competition in health care is very different from other types of products and services,” — “the more supply there is, the higher costs are.”