Sunday, August 16, 2009

The Government Effect

Health reform in Canada... have none of these people ever heard of the law of unintended consequences?

Unintended consequences are outcomes that are not (or not limited to) the results originally intended in a particular situation. They may be foreseen or unforeseen, but they should be the logical or likely results of the action.

Now what do you think might be the unintended consequence of this:

"He has also said the Canadian system could be restructured to focus on patients if hospitals and health-care institutions received funding based on the patients they treat, instead of an annual, lump-sum budget.

This "activity-based funding" would be an incentive to provide more efficient care, he has said."

Dr Ouellet is counting on all those positive consequences he's already concluded would be the result. But understanding the nature of bureaucracy isn't his forte apparently.

Bureaucracy's love their budgets, its how they live. When they are given a set budget they will spend it all, every time, in the hopes that;

a) It won't be cut next year because they proved through frugality or efficiency that they did not need all the cash and;

b) That if they spend it all they will have the opportunity to ask for more for next year so that the bureaucracy can expand (as is their wont).

But the good Doctor is proposing an open budget. One that (apparently) rewards the bureaucracy for its efficiency.

But in the land of unintended consequences is quality a necessary part of the equation? No. The only necessary part of the equation would become processing the largest possible volume of patients to receive the largest possible payment.

This system would not be a problem in a free market because if the quality of the service dropped to meet the need of efficiency then the patient would be able to go somewhere else and the offending business would be forced out of business by the companies offering both quality and efficiency.

But since all hospitals in this country are state owned there is no hope for a market correction of that type, and what you would have is hospitals becoming sausage factories. With no reason to offer quality and efficiency, then efficiency (expediency) will win out.

Once that budgetary imperative has taken hold, the other unintended consequence will rear it's head, namely the cost of health care in this country will go through the roof, which means our taxes will go through the roof.

There ought to be a corollary to the Law of Unintended Consequences called "The Government Effect" stating simply that when any government program results in unintended consequences the cost of said unintended consequences is inevitably downloaded onto the individual in the form of some tax levied against him or some sacrifice of his freedom.

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