HSA Plans Gain Popularity as Premium Costs Rise

The marketplace works in health care, just as it does in other sectors of the economy:

HSA Plans Gain Popularity as Premium Costs Rise

About half of all employers are expected to soon offer Health Savings Account (HSA) plans to their employees. This projection offers the best hope for restraining runaway health care costs, according to John Goodman, president of the National Center for Policy Analysis (NCPA).

"The best way to control health care costs is to put patients in control of more of their health care dollars," said Goodman. "The increasing popularity of HSAs is a result of managed care's failure."

According to a report released this week by Hewitt and Associates, a global human resources company, "account-based plans are gaining traction by employers as a way to control costs." Hewitt's research found that more than 20 percent of companies offer, or plan to offer, a high-deductible health plan with an HSA by the end of this year and almost half are considering offering one at a future date. While just 3 percent of employees elected these plans last year, most companies anticipate that enrollment will grow to 20 percent in 5 years.

This is good news for those who want to preserve high quality medical care while keeping costs down.

Government control is bad for your health

The September 26, 2007 Rocky Mountain News printed the following OpEd by Brian Schwartz:

Government control is bad for your health
Wednesday, September 26 at 12:00 AM
By Brian T. Schwartz, Boulder

The 208 Commission is spending your tax dollars to inject poison into our health-care system — the very same poison already crippling it: government controls over your medical choices. These controls chain you to your employer’s health plans, prohibit the sale of affordable insurance policies and allow Medicaid to provide lousy health care while perpetuating poverty.

Because the tax code exempts employer-provided health insurance, but not other types, you’re essentially stuck with your employer’s high-cost nonportable choices. Hence, insurance companies can afford to be stingy and deny you care; they know that losing you as a customer requires that you change jobs.

Tax-exempt insurance coddles insurance companies by encouraging you to forgo a higher salary for more expensive coverage than you may need. This especially applies if Congress denies you a tax-free Health Savings Account because your insurance doesn’t qualify. Why save $100 each month on a more economical policy when, after taxes, you’re left with only $45 to save for when you’re older? You might as well keep the costly insurance, even though you probably won’t utilize those high premiums and you could be saving.

Our insurance-friendly tax code has resulted in our demanding prepaid medical care instead of real insurance. Since medical care appears almost free at the point of service, patients overconsume, are not cost-conscious, and providers need not compete on price. Providers do not strive to satisfy you as a customer because you aren’t a customer — your insurance company is. Yet, extensive research has shown that patients with higher-deductible policies spend much less than those with prepaid plans — with negligible difference in health outcomes.
They also seek more preventive care.

To champion fairness and affordable quality medical care, the 208 Commission should support a tax code that treats out-of-pocket medical expenses and insurance equally, regardless of who pays insurance premiums. President Bush’s tax deduction for insurance falls short, as it still favors insurance companies and penalizes out-of-pocket medical purchases.

A viable solution is universal eligibility for tax-deductible Health Savings Accounts, now available only with high-deductible insurance. Since taxes shouldn’t favor insurance over savings, anyone should be able to open an HSA. Further, to free us from our employer’s insurance, we should be able to purchase insurance with HSA deposits.

It’s bad enough that government pampers insurance companies by penalizing savings and pushing you to buy needlessly expensive insurance. Worse yet, Colorado’s mandated-benefits laws make it a crime to purchase affordable health insurance. The 208 Commission supports plans to extend these laws, even though they already increase your premium costs by between 21 percent and 54 percent.

The Colorado legislature should expand eligibility for “mandate-lite” policies and ultimately repeal mandates. It should also advance the goal of the Health Care Choice Act, which would allow you to buy insurance that meets less damaging regulations of other states.

Lastly, the 208 Commission foolishly supports Medicaid expansion. As shown in FAIR, my free-market proposal at WhoOwnsYou.org, Medicaid fails to meet its criteria of increased access, personal responsibility, financial stability, and fairness. Instead of unfairly competing with insurance companies with Soviet-style government-controlled insurance, Medicaid could at least mimic food stamps with insurance vouchers.

This would be an improvement, but it’s still unjust. For every dollar expropriated from you to fund Medicaid, private charities lose a potential donation. A tax credit for donations to medical charities would partially level the playing field. The threat of lost revenue would motivate Medicaid administrators to be effective, and taxpayers would have more freedom to fund charities they deem worthy.

Government controls cripple medical care. Effective reform requires phasing out destructive controls and programs, not creating more of them. Paraphrasing Colorado activist Robert LeFevre, government-controlled medicine is a "disease masquerading as its own cure."

Brian T. Schwartz, Ph.D., is a resident of Boulder.

Brian Schwartz on Free Market Health Care

The September 24, 2007 Boulder Daily Camera printed the following LTE by Brian Schwartz:

We do not have free-market care

"If the market alone could supply the answer, 47 million Americans would not lack health insurance," stated a Boston Globe editorial supporting of Hillary's big-government plan (Sept. 21). This implication that America has free-market medical care is the huge deception behind government's hostile take-over of medicine. Our tax dollars already account for almost half of all medical spending. That's no free market.

Neither is a tax code that coddles insurance companies. It deeply discounts employer-paid insurance, chaining you to your employers costly non-portable plans. As a captive customer, insurers can afford to mistreat you — changing insurers requires changing jobs.

Tax-discounted insurance also encourages you to buy more comprehensive insurance than you probably need, hence penalizing saving for future medical expenses. With prepaid health care posing as "insurance," we consume medical care like a business traveler dining on the company's expense account: Since someone else pays the bill, patients need not shop around, so providers don't compete on price.

You can also thank government meddling for mandated-benefits laws, which criminalize the purchase of affordable insurance. This is like banning cars that lack features of a Lexus, and calling for more government controls because people cannot afford cars.

Instead of imposing more government meddling, legislators should restore free markets. First repeal the insurance tax exemption and lower taxes commensurately. If that's not feasible, extend the tax exemption to all medical expenses and insurance by allowing anyone to open a tax-deductible Health Savings Account. The ability to purchase insurance with untaxed HSA deposits would free us from employer-based plans. The Legislature should also repeal mandates and support the Health Care Choice Act, which would allow us to buy insurance that meets less damaging regulations of other states.

Paraphrasing Colorado activist Robert LeFevre, government-controls are a "disease masquerading as its own cure."

BRIAN T. SCHWARTZ

Uninsured in America

The video "Uninsured in America" from FreeMarketCure.com examines the facts behind the conventional wisdom about the 45 million Americans without health insurance:

A Short Course In Brain Surgery

This short video from Stuart Browning and FreeMarketCure.com shows the reality of the Canadian system of socialized medicine in all of its horror for Lindsay McCreith.



Without the semi-free American system to diagnose and operate on his brain tumor, Lindsay McCreith would likely be dead today. (Via Susan Mashaw)

ARI on HillaryCare

The Ayn Rand Institute has sent out the following press release on Hillary Clinton's health care proposal:

HillaryCare 2.0:
More of the Poison that Is Killing Our Healthcare System

Sept. 18, 2007

IRVINE, CA -- Hillary Clinton has announced her new “universal healthcare” plan, which she claims will solve the problem of high insurance premiums. “You’ll never again have to worry about finding affordable coverage,” says Mrs. Clinton. “Your coverage will be guaranteed -- if you pay your premiums and follow the rules, your insurance company will be required to renew at a price you can afford.”

Alex Epstein, an analyst at the Ayn Rand Institute, denounced the proposal. “Like all other ‘universal healthcare’ -- that is, socialized medicine -- schemes, Mrs. Clinton’s is guaranteed to lead to disaster if implemented, because it ignores the basic requirement of medical progress and falling prices: freedom for doctors, patients, and insurance companies.

“Health care is a mess because it is one of America’s most controlled and socialized industries -- beginning with the fact that we are all forced to pay for one another’s health care through Medicare and the government-induced third-party-payer system. In the name of the individual’s ‘right’ to health care and the government’s ’responsibility’ to provide it, the government has reached its tentacles into every facet of medicine, from how many doctors are allowed to be licensed to which medical professionals may perform what procedures, to what procedures insurance companies must provide on their plans.

“Mrs. Clinton and other advocates of socialized medicine all seek to ‘solve’ this problem by adding more government coercion to the system. For example, her ‘guarantee’ that ‘your insurance company will be required to renew at a price you can afford’ is a veiled call for price-controls -- and a prescription for insurance companies to be exposed to a bankrupting combination of huge liabilities with comparatively low premiums.

“If anyone is interested in fixing American health care, there is only one solution: remove coercion from the system. If medicine were left free, with individuals responsible for paying for their own care and insurance, and America’s businessmen, doctors, and educators liberated to offer it at all different price points, we would see quality and price improvements like those for flat-panel television sets. Indeed, we already see this in the few realms of medicine that are left free; laser eye surgery, for example, has improved dramatically over the years while prices have fallen. We could see such developments with medical care as a whole -- as soon as we agree to take responsibility for our own health, and get the government out of it.”

Copyright © 2007 Ayn Rand® Institute. All rights reserved.

Another Canadian Politician Gets Treatment In the USA

Belinda Stronach, Canadian MP and former cabinet minister recently travelled to California for her breast cancer surgery, rather than having it performed within the Canadian medical system. (Here's a related story.)

Her people are denying that it indicates any lack of confidence in the Canadian system.

I don't fault someone for seeking the best treatment for themselves, or for following the advice of their doctors. That is completely rational. What I do find horrible is a system that explicitly forbids patients from spending their own money on what's best for them, and instead requires that they wait in line until the government decides it's acceptable for them to receive treatment.

Some Canadians don't mind their system too much, because they can avoid the waiting lists. Wealthy Canadians just travel to the USA and purchase the care they need here. The politically well-connected use their "pull" to move up the waiting lists without too many questions being asked -- something that ordinary Canadians bitterly refer to as "queue jumping." The people who are harmed the most by the Canadian single-payer system are the sickest, the poor, and those without special political connections.

(Via Jim May and Richard Bramwell.)

Single-Payer Health Care Is Anything but Free

The Ayn Rand Institute has released the following OpEd, written by myself:

"Single-Payer" Health Care Is Anything but Free

By Paul Hsieh

Michael Moore's latest movie "SiCKO" sings the praises of the Canadian "single-payer" socialized medical system. Some Americans want a similar system implemented in the United States. Defenders of the Canadian system frequently claim that patients don't have to worry about money when they're sick -- the health care is free. But is this really true?

No.

First, it is ludicrous to think the system is free. Each citizen is forced to pay for his neighbors' medical care in the form of high taxes. (As a percentage of GDP, total taxation is 28 percent higher in Canada than in the United States.) The government, rather than individuals, then decides how that money is spent.

Even worse, in the name of "equal access" the government generally forbids patients from purchasing medical services outside of its system. Canadian law makes it difficult or impossible for citizens to spend their own honestly earned money on medically necessary care for themselves or their loved ones, even when both the doctor and the patient are willing.

To control costs, the government restricts access to crucial medical services via infamous waiting lists. This imposes a second, hidden, cost on patients: their time.

According to the Vancouver-based Fraser Institute, "Canadian doctors say patients wait almost twice as long for treatment than is clinically reasonable, ... almost 18 weeks between the time they see their family physician and the time they receive treatment from a specialist."

Because of the waiting lists, mortality rates for treatable conditions such as breast cancer and prostate cancer are significantly higher in Canada than in the U.S. A Canadian woman who discovers a lump in her breast might wait for months before she receives the surgery and chemotherapy she needs, with the cancer cells multiplying rapidly as each week goes by. If she lived in the United States, she could receive treatment within days.

This tax on time is especially cruel because the burden falls hardest on the sickest patients, i.e., those with the least time to spare.

Consequently, Canadian patients routinely suffer and die while waiting for their "free" health care. The National Center for Policy Analysis notes, "During one 12-month period in Ontario, ...71 patients died waiting for coronary bypass surgery while 121 patients were removed from the list because they had become too sick to undergo surgery."

To guarantee "free" health care, a government must force the individual to pay for everyone else's medical care and limit his freedom to pay voluntarily for his own. With bureaucrats deciding who receives what, the individual is therefore forbidden from spending his money according to his own rational judgment (and the advice of his doctors) as to what's best for his health. When a government forces people to act against their own interests, it's no surprise that the results are misery and death.

Fortunately, Canadians are starting to recognize the problems inherent in "single-payer" health care and are taking very small steps towards limited private medicine. America must not repeat Canada's mistakes. As P. J. O'Rourke said, "If you think health care is expensive now, wait until you see what it costs when it's free."


Paul Hsieh, MD, guest writer, is a practicing physician in the south Denver metro area. He is a founding member of the Colorado group Freedom and Individual Rights in Medicine (www.WeStandFIRM.org). His e-mail address is: paulhsiehmd@gmail.com. The Institute promotes Objectivism, the philosophy of Ayn Rand -- author of "Atlas Shrugged" and "The Fountainhead."

Copyright © 2007 Ayn Rand® Institute. All rights reserved.

The Health Care Freedom Coalition

A group of organizations supporting generally pro-free market health care have come together to form "The Health Care Freedom Coalition". Looking at their official agenda (PDF format), I find much to commend, and one item with which I disagree.

I do like the following elements:

No mandates
No government price controls
No basic benefits package imposed by force by the government
No government sponsored "connectors" or government-run purchasing pools
Health Savings Accounts for all American
Removing insurance mandates
Allowing insurance to be sold across state lines

I do disagree with their support of government funded insurance for the so-called "high risk pool". Instead, that small group of patients can and should be covered by private charities. I don't believe my neighbor should be forced to pay for my care, if I happen to have a higher than average risk of a rare cancer. But if he wishes to voluntarily donate to my health care fund because it accords with his rational values, then I would gratefully accept his contribution, recognizing that it was a gift, not mine by "right".

As Dr. Leonard Peikoff points out in his essay, "Health Care Is Not a Right":

Some people can't afford medical care in the U.S. But they are necessarily a small minority in a free or even semi-free country. If they were the majority, the country would be an utter bankrupt and could not even think of a national medical program. As to this small minority, in a free country they have to rely solely on private, voluntary charity. Yes, charity, the kindness of the doctors or of the better off--charity, not right, i.e. not their right to the lives or work of others. And such charity, I may say, was always forthcoming in the past in America. The advocates of Medicaid and Medicare under LBJ did not claim that the poor or old in the '60's got bad care; they claimed that it was an affront for anyone to have to depend on charity.

But the fact is: You don't abolish charity by calling it something else. If a person is getting health care for nothing, simply because he is breathing, he is still getting charity, whether or not any politician, lobbyist or activist calls it a "right." To call it a Right when the recipient did not earn it is merely to compound the evil. It is charity still -- though now extorted by criminal tactics of force, while hiding under a dishonest name.

And this is the case even if the patients are sick (or have a high genetic predisposition towards certain diseases) through no fault of their own.

Stossel on Health Savings Accounts

John Stossel of ABC News has written an excellent article on Health Savings Accounts (HSA's), and the success story of Whole Foods company in adopting this as the basis of their health plan. Here's an excerpt:

"Health Savings Accounts: Putting Patients in Control"

Don't you hate that high deductible on your insurance policy? You have to pay thousands of dollars before insurance covers your care. That's terrible, some say, but is it really? A version of it may be the key to lowering costs and putting you in charge of your health care.

Five years ago, the grocery chain Whole Foods Market switched to a different kind of health insurance, a policy that puts patients more in control.

...Whole Foods has an insurance policy with a high deductible. That means an employee like Braden Weirs must pay about $1,000 before his insurance kicks in. If he gets cancer or heart disease, his insurance covers it.

But if he has a sore throat or a sprained ankle, he pays.

To help workers pay, Whole Foods puts money into an account for them. Weirs got $1,500 this year. If he doesn't spend it on medical care this year, he keeps it and the company adds more next year.

"And I have plenty of money left over," Weirs said. "So I can go get my new prescription glasses at the end of the year."

These plans encourage individual responsibility, save money, and yet still preserve high quality care. The whole thing is worth reading.

ARI: Blame the Government, Not the Market, for Exorbitant Health-Care Costs

The Ayn Rand Institute has issued the following press release on the cause of rising health care costs:

Blame the Government, Not the Market, for Exorbitant Health-Care Costs
September 13, 2007

Irvine, CA -- The New York Times reports that employer-sponsored health insurance premiums have increased by 6.1 percent this year -- not as high as last year's 7.7 percent increase, but still far ahead of wages or inflation -- and that since 2001 they have increased by 78 percent.

"These statistics will be used by the advocates of collectivized medicine to say, once again, that the 'free market' has failed, and that we need some form of government-controlled 'universal health care' scheme," said Alex Epstein, a junior fellow at the Ayn Rand Institute. "But the truth is the opposite. These skyrocketing premiums are testament to the huge destruction that the government's massive control of healthcare to date has already wrought.

"Health-care is one of America's most controlled and socialized industries -- beginning with the fact that we are all forced to pay for one another's health-care through Medicare and the government-induced third-party-payer system. In the name of the individual's 'right' to health-care and the government's 'responsibility' to provide it, the government has reached its tentacles into every facet of medicine, from how many doctors are allowed to be licensed to which medical professionals may perform what procedures, to what procedures insurance companies must provide on their plans. Is it any wonder that health-care is a mess?

"Observe that in the fields that are left free, like the computer and electronics industries, over time the cost of any given product generally goes down, not up. If medicine were left free, with individuals responsible for paying for their own care and insurance, and America's businessmen, doctors, and educators liberated to offer it at all different price points, we would see quality and price improvements like those for flat-panel television sets. Indeed, we already see this with the few realms of medicine that are left free; laser eye surgery, for example, has improved dramatically over the years while prices have fallen. We could see such developments with medical care as a whole -- as soon as we agree to take responsibility for our own health, and get the government out of it."

Copyright © 2007 Ayn Rand® Institute. All rights reserved.

Stuart Browning - September 18

Ari Armstrong alerted me to this event involving Stuart Browning, and the viewing of a premiere of shot films depicting socialized medicine -- called Free Market Cure.

FREE MARKET CURE
The Independence Institute announced that it will be hosting the Colorado premiere of Free Market Cure, a series of short films that depicts the dangers of socialized medicine. Independent film maker and producer of Free Market Cure Stuart Browning will be guest of honor.

According to Browning, those on the left including Hollywood and many politicians "are gearing up to bring socialized medicine to the U.S. under the guise of 'universal healthcare.' Americans should be aware, however, that government-run health care means high taxes, medical rationing - and waiting lists to see specialists, get diagnostic tests and to receive surgery."

Free Market Cure is designed to counter Michael Moore's Sicko, which Browning called "a large dose of misinformation and propaganda."

The premiere will be on Wednesday, September 19, at the Shwayder in the Mizel Center for Culture and Arts at 350 S. Dahlia Street in Denver. The movies and Browning's commentary will begin at 7 p.m. and will be followed by coffee and dessert. The event is free and open to the public but seating is limited so reservations are requested. Please contact Kay at 303-279-6536 or kay@i2i.org. For more information. http://www.i2i.org

208 Commission Wants Individual Mandates

The 208 Commission is considering a 5th proposal for universal health care coverage, which would rely heavily on a so-called "individual mandate", according to the September 11, 2007 Rocky Mountain News:

Under the plan, Coloradans would be required to provide proof of health insurance when filing their state income taxes. Failure to do so could result in a tax penalty equal to the cost of a year's worth of coverage.

Yet, this has already been tried in Massachusetts and is generating serious problems because it does not address the fundamental cause of skyrocketing health care costs, namely the government interference in medicine. The state mandates expensive "comprehensive" plans that many people (rationally) would not necessarily choose for themselves. As a result, many of the working poor are being squeezed. According to this recent MSNBC.com article:

About 160,000 uninsured people in the state have incomes that are too high to qualify for subsidized health insurance -- but too low to afford the lowest-cost unsubsidized plans. About 60,000 of these working poor won't face a penalty for not getting insurance, but the 100,000 others are in a bind.

"What I'm starting to see," [single mother Maureen] Linehan said, "is the people have to pay for their health care, and now they can't afford to pay their rent."

In other words, the plan hurts the working poor the most - the very people it is supposed to help.

Even former Massachussets governor Mitt Romney, one of the key architects of the Massachusetts plan, is now backing away from his former support of an individual mandate in his national political campaigning. The August 24, 2007 New York Times reports:

There is no individual mandate in Mr. Romney’s plan for the rest of the country. Instead, it concentrates on a "federalist" approach, premised on the belief that it is impossible to create a uniform system for the entire country.

..."He's run away from the Massachusetts plan," said Stuart Altman, a health economist at Brandeis University who worked in the Nixon administration and has helped advise many politicians since, including Senator Barack Obama, a Democratic presidential contender.

The individual mandate violates an individual's right to decide how best to spend his own money for his own health, and attempts to substitute a bureaucrat's judgment instead.

If the man who signed it into law in Massachusetts is no longer supporting the individual mandate, why should we adopt it here in Colorado?

What good is health care if no doc will see you?

Yet another problem unfolding in Massachusetts. The state system guarantees "coverage", but of course that's not the same as actual health care.

"What good is health care if no doc will see you?"

Lee Sampson didn't expect to find herself without health insurance. But when her job as a medical transcriptionist got outsourced to India earlier this year, Sampson, 47, had to find a way to get covered.

She found it in Commonwealth Care, a group of subsidized health insurance plans that was created as part of the state's new law requiring people to buy coverage. While the little income Sampson had disqualified her for the state's Medicaid program, the subsidized option was more doable than pricier plans targeting the uninsured from carriers like Harvard Pilgrim and Blue Cross/Blue Shield.

Sampson was enrolled in a plan run by a subsidiary of Boston Medical Center called BMC Health Net. But before her benefits would take effect, she had to find a primary care doctor. That's when her frustration with the new system reached a boiling point.

Sampson started calling primary care doctors within a half-hour drive of her home in Kingston. The response from nearby doctors: "We're not taking (that insurance plan), we're not taking new patients."

Sampson estimated she called about 50 doctors. In some cases, administrators at doctors offices said they didn't know why they were on lists as accepting the insurance when they don’t. In others, they just weren't accepting new patients.

"One woman I talked to said, 'My son is going through the same thing,'" Sampson said. "People are very sympathetic."

Sampson's experience may become more common as residents - many who don't have insurance for financial reasons - scramble to find plans ahead of the Jan. 1 state deadline, after which people lose their state income tax personal exemption of about $219 and face the prospect of stiffer penalties later on.

The government can offer the "stick" of harsh penalties against patients if they don't purchase the state-mandated package. But it can't create actual medical care from thin air. (Via KevinMD.com)

Another Physician Shortage in Canada

From the CBC news comes this report of another physician shortage in Canada. Here's an excerpt (items in bold are mine):

A shortage of urologists has become so pronounced that patients' lives are at risk, managers of a St. John's-based health authority have been warned.

In a powerfully worded letter to the Eastern Health regional authority, urologist Dr. Douglas Drover said an "excessive volume of work" in the specialty has meant waiting times of almost a year for patients seeking treatment.

Andy Grant, a member of a prostate cancer support group in St. John's, said he is afraid that people will die -- or already have -- while waiting for surgery.

..."First of all, [patients deal with] the shock you might have prostate cancer, then the shock of being confirmed with prostate cancer," he said. "Now you have the shock of saying, 'I have to wait until next year?' "...

But, hey - at least the health care in Canada is "free"!

(Via KevinMD.com)

More Labor for Political Medicine?

The following article was published originally by Grand Junction Free Press on September 3:

Reformers demand more labor for politically-run medicine

by Linn and Ari Armstrong

Some health "reformers" are celebrating this Labor Day by trying to force you to labor more to pay exorbitantly higher taxes. A recent AP story carried the headline, "$26 billion tab to provide health insurance to all Coloradans, panel says."

But that figure refers only to the most outrageous plan. The danger is that the legislature will reject the worst of the five plans under review by the "208" Healthcare Commission, then pass a "compromise" package that massively expands the political control of medicine, but falls short of government monopoly financing.

This is a little like the Mafia threatening to bust your kneecaps with a baseball bat, but then kindly backing down and requiring only "reasonable" weekly pay-offs.

So the question is whether Colorado citizens will cave in to such extortion and allow politicians to interfere even more extensively with their medical choices. Those who value their liberty and their health will instead demand that politicians repeal existing controls that have caused medical expenses to spiral out of control.

One fact that today's health "reformers" refuse to acknowledge is that existing problems with American medicine are caused exclusively by decades of political interference in medicine. Such reformers do not attempt to disprove this fact -- they cannot -- so they simply ignore it. They pretend that the "solution" to the problems caused by political interference in medicine is (drumroll, please) more political interference in medicine.

The federal government imposed tax distortions that entrenched high-cost, non-portable, employer-paid insurance. Health insurance, but not any other kind of insurance, is provided by employers to cover routine, expected expenses, and it is so expensive, because of unjust and hopelessly stupid federal tax policy. To that burden federal and state politicians have added massive tax spending and reams of controls over medical services and insurance. The inevitable consequence? We pay more for worse health care.

Unfortunately, the "reformers" keep trotting out the bogus argument that largely-socialized American medicine is worse than mostly-socialized European and Canadian medicine. Even though politicians have royally screwed up American medicine, it's still partly free, and therefore it's still better. We addressed the international comparisons in our columns of May 14 and June 11. We noted that, by various measures of health outcomes, the U.S. is clearly superior. We also pointed out that one problem with using lifespan as a basis of comparison is that more Americans are obese.

John Stossel points to another problem: "We have far more fatal transportation accidents than other countries. That's not a health-care problem. Similarly, our homicide rate is... higher... When you adjust for these 'fatal injury' rates, U.S. life expectancy is actually higher than in nearly every other industrialized nation." For more on this point, see The Business of Health by Robert Ohsfeldt and John Schneider.

And yet here's what one "reformer" told Congress earlier this year: "The United States spends more on health care than any other nation in the world. ... Yet the US lags behind many of these countries in life expectancy and health outcomes." The person making that wildly misleading claim is John Sheils. What's interesting about Sheils is that he's a lead analyst for The Lewin Group, the outfit hired by the 208 Commission to "study" the plans.

It therefore comes as little surprise that the plan that shines in Lewin's analysis is the most socialistic one ("single payer") that would let politicians and bureaucrats take over the financing of medicine, thereby in effect making doctors and hospitals wards of the state. (He who pays the piper calls the tune.)

But, according to Lewin, we'd actually "save" money by putting politicians and bureaucrats in charge of medical financing. Do you really believe that government-controlled medicine will remain either cheaper or more effective? Well, pedantic utopians used to claim that the Soviet economy outshined the U.S., too. But government bureaucrats lack the knowledge and incentives to effectively run any business.

It is, of course, possible that a "single payer" plan could save money in the short run, but that's only because it gives bureaucrats the ability to ration your health care. But there are two longer-run problems. First, as special interests kept wrangling over the tax dollars, the bureaucracy would tend to grow ever larger. Second, as "free" health care attracted to Colorado those with high medical expenses and repelled healthier workers who are stuck paying the taxes, expenses would go up as tax revenues slumped.

The cheapest of the other plans, according to the Commission's press release, would start at around a billion dollars per year in tax spending. But the real cost would be much higher, as government rationing, higher taxes, and expanded bureaucracy perpetually eroded our health as well as our liberty.

For more information about what's wrong with health care and how we can fix it by enhancing our liberty in Colorado, please see WeStandFirm.org and WhoOwnsYou.org.

Uh Oh, Canada

Bill Steigerwald asks some much-needed questions about government-run health care in Canada. Here's an excerpt:

If Canada's national health-care system is so dang wonderful, why are so many Canadians coming to America to pay for their own medical care?

Why is the hip replacement center of Canada in Ohio -- at the Cleveland Clinic, where 10 percent of its international patients are Canadians?

Why is the Brain and Spine Clinic in Buffalo serving about 10 border-crossing Canadians a week? Why did a Calgary woman recently have to drive several hundred miles to Great Falls, Mont., to give birth to her quadruplets?

It's simple. As the market-oriented Fraser Institute in Vancouver, B.C., can tell you, Canada's vaunted "free" government health-care system cannot or deliberately will not provide its 33 million citizens with the nonemergency health care they want and need when they need or want it.

Why would anyone want a system like that in Colorado?

Socialized Medicine and Medical Innovation

One important secondary effect of a government takeover of medicine would be the stifling of medical innovation. Currently America has the freest medical system in the world, and also leads the world in medical innovation. This would be jeopardized if we turn towards socialized medicine.

A recent report in the August 28, 2007 Vancouver Sun shows what might happen to us if we adopted a Canadian-style system. Here are some excerpts:

"Canada lags in health innovations"

Canada lags behind several other developed countries when it comes to health innovations, such as developing new prescription drugs and medical devices, according to a Conference Board of Canada report.

...Canada's performance is relatively low, despite being the third highest per capita spender on health care, behind the U.S. and Switzerland.

Among the study's findings about health care research in Canada:

- There is little collaboration between universities and business enterprises.

- Canada has drastically fewer medical patents and applications than other countries.

- Fewer university graduates in Canada have advanced research skills.

..."The Canadian health care system, when compared with those of other OECD countries, is not a high-performing system," states the report.

Thomas Sowell on health care

Thomas Sowell's column today is powerful, because at no time does he advocate government intervention in medicine or health insurance. He begins with a very good discussion of health care in the context of the first 30 years of his life as an uninsured American who paid cash for medical services.

The column begins:

During the first 30 years of my life, I had no health insurance. Neither did a lot of other people, back in those days.

During those 30 years, I had a broken arm, a broken jaw, a badly injured shoulder, and miscellaneous other medical problems. To say that my income was below average during those years would be a euphemism.

How did I manage? The same way everybody else managed: I went to doctors and I paid them directly, instead of paying indirectly through taxes.

This was all before politicians gave us the idea that the things we could not afford individually we could somehow afford collectively through the magic of government.

When my jaw was broken, I was treated in an emergency room and was given a bill for $50 -- which was like a king's ransom to me at the time, 1949. But I paid it off in installments over a period of months....

The comments to the column are worth reading as well.

Stossel on the Commonweatlh Fund

John Stossel has written a powerful critique of the recent Commonwealth Fund report on US health care, which gives the US a bad report relative to other countries. He shows how the criteria used by the Commonwealth Fund are badly biased, and chosen to make socialized systems look superior to the current (mixed) American system. Read the whole thing.

It's also quite ironic that the Commonwealth Fund ranks Hawaii and Maine as the two best US states for universal health care delivery in the US. But as we've noted previously, Hawaiian patients have a very difficult time getting actual care (as opposed to theoretical government "coverage"). Similarly, the New York Times has written a lengthy article on the problems of Maine's system.

One could argue that the Commonwealth Fund rankings could benefit from more reality and less ideology.

Brian Schwartz on Health Savings Accounts

The August 31, 2007 Denver Post website includes the following eLetter by Brian Schwartz:

Health Savings Accounts

Health Savings Accounts offer fairness and choice to rich and poor. The tax code’s discounting employer-based insurance is unfair. It ties us to our employer’s expensive non-portable policies and hence limits insurance companies’ incentive to satisfy patients.

Imagine you want a more economical insurance plan. A less expensive plan could save you $50 per month, which you could save for medical expenses without your insurance company interfering. But since you’ll be taxed on this investment, you’re left with much less. To avoid this penalty, you’ll probably keep the expensive plan, hence wasting money on premiums instead of saving for medical expenses in the future.

Health Savings Accounts are the first step in eliminating this injustice. If a qualified high-deductible insurance plan is best for you, you can invest income saved on premiums in a tax-free HSA - equivalent to a 401(k) plan for medical expenses.

Since the tax code should not discriminate between money spent on health care or health insurance, HSAs should be available to anyone, regardless of their insurance policy. Further, to free us from our tax-preferred employer-based plans, we should be able to buy health insurance with funds from our Health Savings Accounts.

Brian T. Schwartz, Boulder