Ahem. There's a difference in price and cost

Ed Morrissey does a sweet job of offering up some tutelage to Congressional Democrats about the fact that putting price controls on medical treatments does not lower the costs of those treatments. Apparently, that is a fundamental economic principle of which they seem ignorant.

Here is what the Democrats are claiming.

The $871 billion estimate -- well under the $900 billion limit set by President Obama -- is the latest of several versions scored by congressional budget analysts, according to a Democratic aide, speaking on condition of anonymity to discuss private talks. The measure would include a government-run insurance plan that pays providers at rates tied to Medicare, the aide added. That so-called "robust" public option is preferred by liberals because it would save the government money and could force private insurers to lower their own reimbursement rates, driving down the cost of health care overall. (emphasis added)

Here is Morrissey's tutorial.

Fixing prices does not lower costs. Let me repeat that: fixing prices does not lower costs. “Costs” are borne by providers, who get reimbursed by either consumers (in a rational market) or by third parties (American health care) for their goods and/or services. In a competitive market, providers have to set their prices at an attractive level in order to get business without missing out on profit opportunities, but their prices have to cover their costs — or they go out of business.

Not coincidentally, the latter is what happens when price-fixing is used. When government fixes the price of goods and services, it usually does so to mask costs, not reduce them. This is what Medicare has done for years, which is why doctors avoid Medicare patients now. When the fixed price becomes less than the actual cost to provide the service, the provider is forced out of business.

Is that where we're heading with many doctors - simply because our politicians don't understand Economics 101?