The latest evolution of the health care monstrosity slinking through the Capital is just as dangerous as earlier versions. The House is considering a version that would supposedly allow doctors to negotiate prices with the government instead of the earlier plans that included set prices that amounted to price controls.

Price controls are a problem because they are historically unrealistic and, over the long run, produce shortages. When a company is forced to sell an item at a price below the cost of production, distribution, and profit they stop producing—resulting in a shortage. Price controls also cause shortages through overconsumption. Thomas Sowell in Basic Economics (pg 29) tells of wealthy people who did not even live in the city holding on to apartments covered under New York’s rent control laws. This reduced the number of apartments available for the poor who were supposed to benefit from the laws.

When one of the agents is the government, negotiated prices are price controls with a less offensive name. Control is negative and implies a use of force. Negotiation sounds warm and fuzzy, sitting down over coffee and biscotti, and seeking what is best for both parties. In order for a negotiation to be effective, and balanced, each must have something to offer and negotiate from an equal footing. When one agent is far more powerful than the other, negotiation quickly gives way to demand. How is anyone, other than a separate sovereign nation, to negotiate with the US government? This is not possible because the government will set the terms of the negotiation. This will quickly degenerate to hidden price controls along with the resulting shortages.

What our healthcare system needs is a healthy dose of free market economics. Our system has been under the boot of big government for too long; Mr. Obama and his cronies in the Congress want us to believe the solution is adding the other boot.