Wednesday, November 16, 2011

The Health Care/Jobs Bill

It appears that the Patient Protection and Affordable Care Act has morphed into the jobs bill -- see this Reuters story.

The essence of the new initiative is that up to $1 billion (of the $10 billion set aside for "innovation" at the Center for Medicare and Medicaid Services (CMS)) will be used as grants for people who come up with good ideas to save money and improve care.

Ah, but the wrinkle is this:
"To get a grant, projects must start within six months and the program will concentrate on those ideas that spur the most hiring and workforce training, the Department of Health and Human Services said."
Here we have a perfect example of economic engineering. Give grants/subsidies/impose taxes, with a variety of specific constraints, all meant to achieve what some policymakers think is the current objective.

But what if the projects that save the most money are the ones that lay off a bunch of health care workers? Funny, but at our local hospital, layoffs are proceeding at a rapid rate. So we will have one set of incentives to lay people off and another set of incentives to hire new ones...but only in certain areas..."shovel ready health care projects."

The health care bill is starting to look like our tax code, and it hasn't even kicked in yet.

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