Posts tagged ‘PCT’

What Happens When You Abandon The Price Mechanism to Allocate Resources

When the government does not allow prices to float in real time in response to changes in supply and demand, then gluts and shortages are inevitable.  When shortages occur, due to prices that are capped or not allowed to move upwards sufficiently quickly, queues and/or spot shortages occur.  When the government decides it does not like this, the jack-booted thugs step in and we have government-enforced rationing.  California, famous for its stupidity in letting wholesale electricity prices float while capping retail prices and thus creating an economic disaster several years ago, is at it again in the electricity market:

What should be controversial in the proposed revisions to Title 24 is
the requirement for what is called a "programmable communicating
thermostat" or PCT. Every new home and every change to existing homes'
central heating and air conditioning systems will required to be fitted
with a PCT beginning next year following the issuance of the revision.
Each PCT will be fitted with a "non-removable " FM receiver that will
allow the power authorities to increase your air conditioning
temperature setpoint or decrease your heater temperature setpoint to
any value they chose. During "price events" those changes are limited
to /- four degrees F and you would be able to manually override the
changes. During "emergency events" the new setpoints can be whatever
the power authority desires and you would not be able to alter them.

other words, the temperature of your home will no longer be yours to
control. Your desires and needs can and will be overridden by the state
of California through its public and private utility organizations. All
this is for the common good, of course.

I can't think of anything that better illustrates the tie between free exchange and freedom.  And by the way, how long before the greenies in the legislature suggest using this mechanism even when there are not shortages to turn down everyone's air conditioner, just because they can.

Update: Exercise for the reader -- Figure out how, once this policy goes bad, the state of California will again blame Enron for their failure.

The Pain of Single Payer

Expect the next Democratic presidential nominee to run strongly on single-payer (ie socialized) medicine.  Vodkapundit reminds us what this is like, with the latest from England:

Hospitals across the country are imposing minimum waiting times -
delaying the treatment of thousands of patients.

After years of Government targets pushing them to cut waiting lists, staff
are now being warned against "over-performing" by treating patients too quickly.
The Sunday Telegraph has learned that at least six trusts have imposed the
minimum times.

In March, Patricia Hewitt, the Secretary of State for Health, offered her
apparent blessing for the minimum waiting times by announcing they would be
"appropriate" in some cases. Amid fears about £1.27 billion of NHS debts, she
expressed concern that some hospitals were so productive "they actually got
ahead of what the NHS could afford".

The Sunday Telegraph has learned of five further minimum-waiting-time
directives. In May, Staffordshire Moorlands PCT, which funds services at two
hospitals and is more than £5 million in the red, introduced a 19-week minimum
wait for in-patients and 10 weeks for out-patients. A spokesman said: "These
were the least worst cuts we could make." In March, Eastbourne Downs PCT,
expected to overspend by £7 million this year, ordered a six-month minimum wait
for non-urgent operations. Also in March, it was revealed that Medway PCT, with
a deficit of £12.4 million, brought in a nine-week wait for out-patient
appointments and 20 weeks for non-urgent operations.

Doctors are also resigning. One gynæcologist said that he spent more time
doing sudoku puzzles than treating patients because of the measures. Since
January, West Hertfordshire NHS Trust, with a deficit of £41 million, has used a
10-week minimum wait for routine GP referrals to hospital. Watford and Three
Rivers PCT, £13.2 million in the red, has introduced "demand management": no
in-patient or day case is admitted before five months.

Note that this is not a bug with single-payer systems, it is a feature.  Any 3rd party payer system has to impose some sort of artificial rationing or bankruptcy will ensue.  Would you drive more if your gasoline costs were all covered by a single-payer system, such that you did not pay directly for gas.  Would your choice of cars be affected?

Along the same lines, from Marginal Revolution comes this story of new scholarship showing the enormous spike that occurs in health care demand under third party payer (e.g. insurance) systems.