What does failure mean? The most obvious was the exploding healthcare.gov website that in the first day of operation only managed to enroll six people in the program. Looking through the notes from the war room, one observes all the troubles that every highly ambitious and poorly constructed website has: tangled databases, bad connections, leaky memory explosion, mixed-up authentication rules, and about a thousand other things.
Will it be fixed? Possibly. But at what price? To prepare the site, the feds have already spent some $600 million and deployed a dud. More than twice that sum will be spent on repair, but with what results? If the site follows the usual government pattern, it will only work as long as it is frozen in time. It can’t adapt to change and will become antiquated in only a few years, and will thereby require other massive infusions to keep up.
A government-run website is the digital-age equivalent of the failure of government to run factories and farms in the 1920s and 1930s. Under socialism, it was true that with enough force and money, even Soviets could produce trucks, grain, and bombs. But every economic decision involving physical resources and time requires trade-offs: If you do this, you are not doing that. The real question is, at what cost? Lenin made some progress in electrification even while major parts of the newly socialized Russia were experiencing famine.
Likewise, healthcare.gov has become a costly symbol of a wider system failure.
The website can and probably will be fixed—but will the program itself achieve its aims? The ACA promised to retain existing health-insurance coverage and then expand it. Upon implementation, the ACA immediately and dramatically reduced coverage by forcing many individually provided healthcare plans to be dropped. Otherwise, most are experiencing sticker shock.
In many cases, mandated coverage of new ailments made continued service economically unfeasible. In other cases, existing plans were suddenly outside the law. For example, the government said that plans must cover outpatient care, emergency room visits, lab tests, hospitalization, maternity, preventative services, pediatric services, prescription drugs, and much more. If the plan didn’t, it was essentially declared illegal and had to be cancelled.
In other words, the companies who dropped millions from the rolls were merely complying with the law. They were obeying government diktat. That few people expected this outcome reveals the true nature of government planning. Two lessons emerge from the mess: Planners cannot account for all contingencies and/or they must lie to get what they want.
Then came the doubling—in some cases tripling—of premiums of many individual plans because of the requirement that insurers take no account of pre-existing conditions, which is a bit like requiring that auto insurers cover drunk drivers who are training for NASCAR.
It is very easy after the fact to look at any government failure and point to all the reasons why the failures should have been anticipated and thereby prevented. But remember that this is knowledge gained after the fact. Before the trial, there are a million possible contingencies, and it is not possible for anyone to prepare for them all. That’s why markets specialize in embedding trial and error as a feature of the system. A market system learns over time, copying success and avoiding failure. Governments are terrible at this. They build, release, and forget about it—with very little ongoing adaptation.(Via A Conservative Blog for Peace.) Share
After the disaster took place, some politicians immediately responded by saying: Make it illegal to stop dropping coverage. This response piles error on error. It amounts to a form of nationalization of already cartelized companies—another step away from the market and toward fully socialized healthcare. Of course, those who’ve always called for a single-payer system won’t mind—even as it will turn U.S. healthcare into a Brezhnevian breadline. (Read more.)