The Economic Consequences of BaucusCare

John Goodman explains the economic havoc that the Baucus health care bill (or any variant) will wreak in his post, "The Baucus Bill Explained".

The consequences include:

1. Millions of jobs lost
2. A shift to independent contracting
3. Major industrial restructuring
4. Emergence of niche markets
5. Growth of the underground economy
6. Higher insurance premiums
7. Fewer insurance choices
8. Higher than anticipated taxpayer costs
9. New unfunded liabilities
10. Exacerbating the problems of cost, quality and access

His conclusion:

Not only will "reform" not solve any of the problems it is supposed to solve, it will almost certainly undermine the ability of entrepreneurs in the private sector to solve them.

(Read the full text of "The Baucus Bill Explained".)

This is an entirely predictable consequence of the government taking control over 1/6-th of the US economy.

Coming New Taxes

Americans for Tax Reform lists a variety of new taxes that would be imposed on Americans if the 1900-page HR 3962 House health care "reform" plan is passed into law.

Here are a few of them:

Employer Mandate Excise Tax
Individual Mandate Surtax
Medicine Cabinet Tax
Increased Additional Tax on Non-Qualified HSA Distributions
Surtax on Individuals and Small Businesses
Excise Tax on Medical Devices

(Read the full list and related discussion.)

Watkins: In Defense of Health Insurance Discrimination

Don Watkins of the Ayn Rand Center for Individual Rights has written a nice blog post explaining why insurance companies should be able to charge different rates for different customers (or decline to cover some people at all).

Here's an excerpt from his post, "In defense of health insurance discrimination":

Forcing insurance companies to take all comers, and to charge all customers similar fees can accomplish only one thing: to force some health insurance customers (primarily the young and healthy) to subsidize other health insurance customers (the elderly and the sick). That's not insurance -- that’s welfare.

The overall effect of eliminating health insurance discrimination is to drive up the costs of health insurance. As the Wall Street Journal points out, states that currently prevent insurance discrimination through community rating and guaranteed issue rules have the most expensive individual insurance markets in the country. "In 2007, the average annual premium in New Jersey was $5,326 for singles and in New York $12,254 for a family, versus the national average of $2,613 and $5,799, respectively."

...If we can painlessly ban health insurance discrimination, then why don't we end all discrimination for all forms of insurance? Why should we have to buy car insurance before we get in an accident? Why should Geico be able to drop Robert Downey, Jr. after his fifteenth DUI? Why should a three-pack-a-day smoker have to pay more for life insurance than Michael Phelps?

Insurance is inherently discriminatory. An insurance company cannot function without assessing risk, charging greater fees for greater risks, and refusing to provide "insurance" to those for whom the outcome in question is certain. It is by carefully assessing risk and discriminating accordingly that insurance companies enable us to protect ourselves against some of life's unknowns. That is a crucial benefit, and those who provide it should not be smeared, but thanked.

(Read the full text of "In defense of health insurance discrimination".)

For more on this topic, see my Objective Standard article, "How the Freedom to Contract Protects Insurability".

Costs Keep Rising in Massachusetts

The October 27, 2009 Wall Street Journal includes a piece by Grace-Marie Turner discussing the fact that health care costs have continued to rise in Massachusetts despite the promised savings of the state's health care reform.

As Turner notes:

Massachusetts is a problematic model on which to base federal health-care reform because the state relies heavily on Medicaid. Washington in 2008 agreed to provide the state with $10.6 billion over three years as part of its Medicaid waiver request, which allows the state to subsidize insurance for people with incomes higher than Medicaid rules normally allow.

Unlike Massachusetts, the federal government doesn't have a back-up source of funds to help it pay for national health care. Washington might want to see how Massachusetts does in solving these problems before proceeding with a similar model for the country.

(Read the full text of "Costs Keep Rising".)

Implementing the Massachusetts plan at a national level will be a recipe for disaster.

Peikoff Videos: Health Care Is Not A Right

On Dr. Leonard Peikoff's website, he notes: "In light of the current debate on socialized medicine, this week's podcast will be a talk on the subject given 16 years ago by Dr. Peikoff."

His original speech was delivered at a Town Hall Meeting on health care in Costa Mesa, California, on December 11, 1993.

You can watch his talk here.

The updated 2007 version of his speech can be found here in HTML format or as printable PDF version.

Samuelson: Public Plan Mirage

In the October 26, 2009 Washington Post, Robert Samuelson explains some of the smoke-and-mirrors behind the newly revived "public plan". Here's an excerpt from his piece, "Public Plan Mirage":

...The public plan's low costs would be artificial. Its main advantage would be the congressionally mandated requirement that hospitals and doctors be reimbursed at rates at or near Medicare's. These are as much as 30 percent lower than rates paid by private insurers, says the health-care consulting firm Lewin Group. With such savings, the public plan could charge much lower premiums and attract lots of customers. But health costs wouldn't subside; hospitals and doctors would offset the public plan's artificially low reimbursements by raising fees to private insurers, as already occurs with Medicare. Premiums would increase because private insurers must cover costs to survive.

As for administrative expenses, any advantage for the public plan is exaggerated, say critics. Part of the gap between private insurers and Medicare is statistical illusion: Because Medicare recipients have higher average health expenses ($10,003 in 2007) than the under-65 population ($3,946), its administrative costs are a smaller share of total spending. The public plan, with younger members, wouldn't enjoy this advantage.

Likewise, Medicare has low marketing costs because it's a monopoly. But a non-monopoly public plan would have to sell itself and would incur higher marketing costs. Private insurers' profits (included in administrative costs) also explain some of Medicare's cost advantage. But profits represent only 3 percent of the insurance industry's revenue. Moreover, accounting comparisons are misleading when they don't include the cost of Medicare's government-supplied investment capital. A public plan would also need investment capital. And suppose the public plan suffers losses. Congress would assuredly bail it out.

The promise of the public plan is a mirage. Its political brilliance is to use free-market rhetoric (more "choice" and "competition") to expand government power. But why would a plan tied to Medicare control health spending, when Medicare hasn't?

(Emphasis mine. Read the full text of "Public Plan Mirage".)

Samuelson correctly notes that our politicians still feel the need to cloak their proposals in a free market guise to gain public approval. They recognize that overt socialism still won't sell with the American public.

Instead of adopting faux-free market reforms, perhaps our politicians should try the real thing.

Boston Health Reform Tea Party

Jared Rhoads of the Lucidicus Project reports on the October 17, 2009 Boston Health Reform Tea Party.

As he describes:

I had a slot as one of the featured speakers. I spoke for about nine minutes, near the middle of the program, after a prominent local conservative activist. My primary message was that the Tea Party movement needs to advocate for capitalism, not just against socialism, and that the only way to do so is with a moral defense of individual rights.

Here's an excerpt from his speech:

Yes, we need change. But it has to be rational change. We're not out to "block health reform" as such, or "stand in the way of progress" as President Obama put it yesterday. We're out to block Washington's version of health reform, because every last facet and feature of these health reform bills serves to introduce more government into the system, not less.

...This does not have to happen in America. There is a moral defense. It's a defense that recognizes man as an end in himself, not the means to the ends of others. It's the defense that man has a right to his own life, and that we have no duty to sacrifice ourselves to the alleged benefit of others. It's the only foundation from which one can consistently defend free markets.

(Read his full post, "Boston Health Reform Tea Party", which includes a short video clip of Jared speaking to a reporter.)

Thank you, Jared, for speaking out!

Catron: The AMA's Quisling Strategy

David Catron of HealthCareBS.com has written a nice piece in the October 22, 2009 American Spectator showing how far the American Medical Association has fallen.

Here is an excerpt from his piece, "The AMA's Quisling Strategy":

...The once-feared organization has become far more pliant in recent years, however. Since the Sustainable Growth Rate formula was imposed in the 1990s, the AMA has repeatedly been forced to go hat-in-hand to its Beltway masters for stays of execution. Each time, Congress has issued a reluctant reprieve from payment cuts -- but not without a price. In exchange for its 2008 reprieve, the AMA was forced to cooperate with congressional Democrats in their disgraceful move to gut Medicare Advantage (MA), a program that has greatly benefited poor and minority seniors. In that tawdry episode, the Dems attached an SGR waiver to a bill that cut funding for Medicare Advantage, whereupon the AMA cravenly began parroting DNC talking points about insurance company profits. This collusion helped the Democrats push through the first of several cuts in MA funding.

This year, the price of the AMA's reprieve is support of whatever health care legislation emerges from Congress. And, so long as the final bill does away with SGR, the organization is obviously prepared to be a willing accomplice in whatever fraud the Democrats perpetrate.

...The tragic irony of this cynical strategy is that it will not work. As Vidkun Quisling discovered in October of 1945, the advantages of collaboration are always short-lived. A temporary reprieve from Medicare payment cuts is all Dr. Rohack will have gained by delivering his patients and colleagues into the hands of Washington's health care bureaucrats. Because socialized health care systems are explicitly designed to circumvent the market mechanisms that actually control costs, they must always revert to the only remaining alternatives: rationing services to patients and cutting payments to providers. All government-run systems do both, and Obamacare will be no different.

(Read the full text of "The AMA's Quisling Strategy".)

Catron is absolutely right. Instead of taking a principled stand against government-controlled health care, the AMA has chosen to try to cut a deal with its future masters -- a strategy doomed to fail, as it has all throughout history.

And unfortunately, they'll end up betraying their patients' health and doctors' long-term ability to practice good medicine.

To paraphrase Benjamin Franklin, "Those who would exchange essential liberty for a temporary reprieve in Medicare cuts deserve neither the reprieve nor liberty."

(Note: I'm not a member of the AMA. According to this story, less than 30% of licensed US physicians are members of the AMA. Certainly, the AMA cannot claim to speak for anything close to a majority of US doctors.)

To Cut Your Health Insurance Costs, Move

How much do state-level insurance regulations raise the costs? As Steve Malanga notes, a lot. Here are a few excerpts from, "To Cut Your Health Insurance Costs, Move":

...[T]he trade group for the nation's insurers, America's Health Insurance Plans, estimated that the average premium for family coverage in the individual market nationally was $5,800. But the study found wide disparities in costs, ranging from average premiums north of $12,000 in New York and Massachusetts to premiums costing on average only $3,000 to $5,000 in more than a dozen states. Some states have even allowed insurers to introduce low-cost, high-deductible policies that can cost under $1,000 a year.

It's fair to say that the costs imposed by some states based on how they regulate health insurance are now a bigger burden on individuals and small and mid-sized firms than state and local taxes.

...There's no evidence that states garner any benefit from such regulation and mandates. States with numerous mandates don't have healthier populations, for instance. Indeed, many state mandates are enacted for political reasons that have little to do with health care outcomes. Several years ago New York's then-Governor Pataki signed into law the state's hefty in vitro fertilization mandate as a payoff to conservative religious groups whose members favor big families and lobbied heavily for the law. It's a rather classic example of how, when you vest such power in lawmakers, some will eventually abuse it.

(Read the full text of "To Cut Your Health Insurance Costs, Move".)

These increased costs are a result of the government usurping the individual's right to spend his own money for his own benefit according to his best judgment.

Extending these onerous regulations to the national level (as the President and Congress propose) will only make the problem worse, not better.

Swiss Update

John Goodman discusses the Swiss health care system in his October 19, 2009 post, "Swiss Health Care: The Good, the Bad and the Ugly".

One point I'd like to make is that the good aspect (i.e., the fact that health insurance is "individually owned, personal, and portable" would naturally happen in a free market, and would not require an individual mandate. As Goodman points out in the sections on the bad and the ugly, new regulations are driving insurance costs and and reducing patients' ability to retain a desirable plan.

In other words, the good elements of the Swiss system are present despite the mandates and regulations, not because of it.

Hillman: Kiss Your Money And Freedom Goodbye

Former Colorado state senator Mark Hillman discusses the fundamental problem with mandated insurance in his latest analysis, "Kiss your money and your freedom goodbye".

Here's an excerpt:

From a practical standpoint, the requirement to purchase health insurance will start badly and grow even worse. That's because the choice of what kind of insurance to purchase will no longer belong to consumers but to politicians and bureaucrats, relentlessly pressured by lobbyists to add to every conceivable screening or procedure in the nanny-state's wish list to your mandatory policy.

Politicians who resist that pressure and defend your right to choose your own level of coverage will be smeared at election time by dishonest advertisements accusing them of opposing mammograms and maternity care.

Requiring health insurance to pay for preventive screenings is like mandating that auto insurance must pay for oil changes and new tires. Only in health care do we forget that insurance was designed to pay for unforeseen catastrophes, not for predictable events for which we should plan and budget.

...If Congress can order us to use our own money to buy goods or services that we might not otherwise purchase, what's to stop it from ordering us to drive hybrid vehicles, install solar panels on our homes, or eat our vegetables?

(Read the full text of "Kiss your money and your freedom goodbye".)

Hillman is correct to highlight the dual threat to our pocketbooks and our freedoms. Both are violations of our individual rights, and must be opposed as such.

A Small Positive

I haven't had much positive to say about the Obama administration's health care policies. But when they do something decent, I want to acknowledge that fact.

Hence, I'm glad to support their move to refrain from bringing federal prosecutions against patients and physicians using medical marijuana in accordance with state laws.

This is a small step in the right direction of allowing patients to freely seek medical services from willing providers without government interference.

Of course, there are even further steps the federal government could take to reduce and eventually eliminate bad drug laws. But for now, I'll gladly welcome this small step and I hope this will be the first, not the last, move in this direction.

Gratzer's Broadside

Dr. David Gratzer has written a new short pamphlet criticizing the current ObamaCare proposals entitled, "Why Obama's Government Takeover of Health-Care Will Be a Disaster".

It is part of the new Broadsides series of public policy pamphlets published by Encounter Books, covering a variety of domestic and foreign issues.

In this short 48-page essay, Gratzer discusses the current proposals, shows how similar ideas have been harmful to both patients and doctors in Canada and the UK, and offers constructive alternatives that would move us in the direction of genuine free market reforms.

Overall, I thought the essay was quite excellent. Many of the ideas were also discussed in his earlier book The Cure: How Capitalism Can Save American Health Care, but updated for the current 2009 political context.

The most valuable portions were the discussions of how relevantly similar policies have already played out in Canada and the UK. The end result of any kind of government-run health care is rationing. Those countries should serve as a clear warning to Americans not to adopt any further government-run health care.

Gratzer's discussion of the special tax-exempt status of employer-provided health benefits and the damaging effect on the health insurance market (specifically in driving up costs and encouraging inefficient utilization) was also very clear and cogent.

Several of his specific free market proposals were also quite good, such as allowing insurance companies to compete across state lines and allowing Americans to use Health Savings Accounts for routine expenses. I do disagree with a few of them -- for instance, I believe Medicare and Medicaid shouldn't be reformed but rather eliminated altogether and replaced by private charity (although it would have to be done in a staged fashion over a number of years).

Gratzer makes a strong practical case against socialized health care. In conjunction with the more fundamental moral arguments, such as those discussed by Dr. Leonard Peikoff in his "Health Care Is Not A Right" (PDF version), he provides good intellectual ammunition for supporters of free market health care reform.

In summary, Dr. Gratzer's essay "Why Obama's Government Takeover of Health-Care Will Be a Disaster" is a short, timely, and informative contribution to the current health care debate.

Obligatory Disclaimer: The publisher gave me a free electronic review copy of this pamphlet, and I am disclosing this fact in accordance with forthcoming new FTC rules for bloggers. The retail value of this pamphlet is $5.99. There was no expectation or promise that I would publish any specific commentary about this pamphlet, either positive or negative.

I also think these FTC rules are dangerous and wrong, for the reasons outlined by Diana in her 10/5/2009 blog post, "Regulating Speech to Death".

For more on this topic, I also recommend the following:

"Interview with the FTC's Richard Cleland" (Edward Champion, 10/5/2009).
"The FTC's Mad Power Grab" (Jack Shafer, 10/7/2009).
"Required FTC blogger disclosure" (Walter Olson, 10/8/2009)
"FTC vs. bloggers, cont'd" (Walter Olson, 10/9/2009)

Free Market Referrals

As the threat of a government takeover of health care becomes closer to reality, more Americans are interested in finding ways to preserve their health care outside of any government system.

I expect that more doctors will start offering their services outside of any sort of state-regulated insurance system. And brokers and clearinghouses will naturally emerge to help match patients and doctors in a relatively free market.

One example of this is this website by Erickson Financial Services for "Affordable Surgery in the USA":

If you are in need of surgery, let Erickson Financial Services help you arrange for affordable surgery right here in the United States of America. Erickson Financial Services offers access to high quality, affordable surgery at a fraction of the cost of traditional U.S. hospitals. How do we do it? Quite simply, Erickson Financial Services acts as a liason between our clients and reputable, licensed practitioners who offer direct-pay services at reasonable, non-negotiable rates. There is no charge for our services.

If you are a citizen of the United States of America, there is no need for you to look towards medical tourism as a solution for your unresolved healthcare needs. The USA offers some of the highest quality healthcare services in the world. Why leave the country when you can receive services right here in the USA at prices comparable to those in countries such as Thailand?

Disclaimer: I have no financial relationship with Erickson Financial Services or any other referral service, and this does not constitute any sort of endorsement. Similarly, I'm not endorsing this particular surgery center or any of the physicians who practice there. I'm merely offering EFS as an example of the sorts of businesses that will likely arise in response to ObamaCare.

Likewise, EFS notes:

Erickson Financial Services offers no guarantees with regards to surgical outcomes. Once we have put the client into contact with a doctor or facility, we are no longer involved with any interaction between doctor and patient. It is up to the client to do his/her own due diligence to determine whether he/she wishes to receive services from the physicans that we refer.

As long as private health care remains legal in the United States, many smart patients will continue to seek the best for themselves and their loved ones outside of any government-run medical system. Hence, such free market alternatives will likely thrive.

I discuss related advice from concierge physician Dr. Steve Knope at: "How To Protect Yourself Against ObamaCare".

The Medical State of the Union

Richard Ralston of Americans for Free Choice in Medicine has written another OpEd, "The Medical State of the Union".

Here's an excerpt:

...The red herring that everyone who currently has insurance will be allowed to keep it omits the detail that a government-managed "public option" would provide an overwhelming financial incentive to every employer in the country to drop insurance for their employees in favor of throwing them into the public plan.

The President and many in Congress have indeed made it clear that they prefer a completely government-controlled, single-payer insurance system. The public option, as supporters like Rep. Barney Frank (D-Mass) have stated, is the best and surest path to a single-payer system and would accomplish that end by demonstrating "the strength of its power," as he puts it -- an accurate, if ominous, turn of phrase. The public option would be enacted with that intent and would be administered with that objective.

Further to that end, a "trigger" to impose a public option if insurance companies fail to reduce costs -- after all of the government-imposed costs are in place -- would inevitably be implemented by those anxious to pull the trigger.

Most deceptive about the President's stubborn defense of the public option is the assertion that only government can provide competition to private insurance, when it is only the government that now prevents private insurers from competing with each other. Current federal legislation that prohibits the selling of insurance across state lines could be repealed along with the massive coverage mandates now required in most states.

(Read the full text of "The Medical State of the Union", also available on the AFCM website.)

Brook: Capturing the Moral High Ground

"Capturing the Moral High Ground" the concluding talk from a presentation given at the National Press Club in Washington D.C. on September 19, 2009 by Yaron Brook during a public briefing on the "Joint Defense of Freedom in American Medicine" sponsored by Americans for Free Choice in Medicine.

Part 1:



Part 2:



Part 3: This is the Q&A session. The link will be posted when available.

Hsieh in Heartland Health Care News

The October 2009 issue of the Heartland Institute's Health Care News will include my OpEd, "Health Overhaul Could Force Doctors to Quit".

This is a condensed version of my earlier PajamasMedia piece, "Is Your Doctor Getting Ready to Quit?"

I'd like to express my deepest gratitude to the Heartland Institute for allowing me to appear in the pages of their monthly newsletter!

Government Air

The latest short video on government-controlled health care from the Independence Institute:



(Via Ari Armstrong.)

Dental Denial

Licensure requirements for medical and dental practitioners are another form of restriction of the free market, and hinder the ability of patients to seek services from willing providers.

Maggie Koerth-Baker shows how dental licensure requirements are harming patients in rural portions of America in her post, "Armed To the Teeth".

And of course, similar arguments apply to medical licensure. For more information, see this discussion from economics professor Shirley Svorny of Cal State University Northridge.

The Benefits of Tort Reform

How much difference would tort reform make in curbing excess medical costs?

According to this October 9, 2009 story from the Associated Press, a lot. Here are excerpts from "Limiting malpractice lawsuits can save big":

Limits on medical malpractice lawsuits would lead doctors to order up fewer unneeded tests and save taxpayers billions more than previously thought, budget umpires for Congress said Friday in a reversal that puts the issue back in the middle of the health care debate.

The latest analysis from the nonpartisan Congressional Budget Office estimates that government health care programs could save $41 billion over ten years if nationwide limits on jury awards for pain and suffering and other similar curbs were enacted. Those savings are nearly ten times greater than CBO estimated just last year.

...[CBO Director] Elmendorf essentially acknowledged what doctors have been arguing for years: fear of being sued leads them to practice defensive medicine. Some doctors will order a $1,500 MRI for a patient with back pain instead of a simple, $250 X-ray, just to cover themselves against the unlikely chance they'll be accused later of having missed a cancerous tumor.

...The CBO report means the malpractice issue will stay alive as the health care debate in Congress builds to a climax this year. The budget scorekeepers estimated the total effect of malpractice curbs could reduce the federal deficit by $54 billion over 10 years, once $13 billion in new tax revenues from economic ripple effects are taken into account.

Even in the health care debate, that's real money.

(Read the full text of "Limiting malpractice lawsuits can save big".)

In my practice, I see this sort of defensive medicine all the time. The ordering physicians don't like it. The radiologists reading these unnecessary scans don't like. Insurance companies don't like it. Patients don't like it.

But as long as the current legal system punishes doctors who fail to practice this sort of defensive medicine, we'll continue to see doctors practicing that way.

(Via Bradley R. Hennenfent, M.D, who blogs at BradMD.com.)

The Truth About The Baucus Bill

Mark Tapscott of the Washington Examiner has written a helpful two-part economic critique of the Baucus health care proposal.

Find out why the numbers just don't add up:

"The truth about the Baucus bill - Part 1" (October 11, 2009)
"The truth about the Baucus bill - Part 2" (October 12, 2009)

The Price of A Life in Massachusetts

Massachusetts' "universal" health care system moved one step closer towards explicit rationing, as reported by the Boston Globe in this October 11, 2009 story, "State plan may place limits on patients' hospital options".

Here are some excerpts:

Controlling Massachusetts' soaring medical costs, many health care leaders believe, may require residents to give up their nearly unlimited freedom to go to any hospital and specialist they want.

..."You can't reap these savings without limiting patients' choices in some way," said Paul Levy, chief executive of Beth Israel Deaconess Medical Center.

...A state commission recommended in July that insurers largely scrap the current fee-for-service system -- in which insurers pay doctors, hospitals, and other providers a negotiated fee for each procedure and visit -- and instead pay providers a per-patient annual fee to cover all of the patient's medical care.

This new system of "global payments" would discourage overuse of expensive medical services, force providers to live within a budget, and improve coordination of care for patients, supporters argue.

(Read the full text of "State plan may place limits on patients' hospital options".)

What the supporters don't mention is that it also creates a tremendous incentive for physicians and hospitals to render as little care as possible. Under the Massachusetts proposal, if your care costs less than the annual allotment, then they keep the unused portion. If your care costs more, then the difference comes out of the providers' pockets. Such a system thus pits your doctor's interests against your own.

For the sake of argument, suppose your annual allotment is $5000 and you've already spent $4500 for that year. Now you go to your doctor's office complaining of a severe headache. He examines you and says, "No, Bill, you don't need a $1000 MRI scan of your brain. Just take two Tylenol and call me in the morning".

Will you be 100% sure that he's giving you unbiased medical advice?

And even if your doctor consistently and conscientiously acts for his patients' best interests, he will inevitably find himself at odds with hospital administrators questioning whether this or that expenditure is appropriate:

"Does Mr. Jones really need another ultrasound test? Is there a cheaper antibiotic you could use? Isn't his heart rhythm stable enough to allow moving him down to a regular hospital bed, rather than spending another night in an expensive ICU bed?"

Do you want your doctor constantly looking over his shoulder trying to balance your needs vs. the demands of a hospital administrator who might be deciding whether or not to renew his practice privileges?

It is precisely this potential conflict-of-interest that caused patients in the 1980s to reject the similar "capitated" payment systems of HMO's (Health Maintenance Organizations). The 2009 Massachusetts proposals may carry a new name, but the basic principle is the same.

Advocates of government-run health care like to claim that it is morally superior because it "doesn't put a price on human life".

But when the government sets an annual spending cap for each patient, then that's exactly what they're doing. In that case, you had better hope that your life is still worth enough to your government...

(Boston Globe story link via Instapundit.)

Update: Thank you, HotAir vistors!

The Stressed German Model

The October 10, 2009 Wall Street Journal points out that Germany's system of universal care is on the verge of collapsing.

Here's an excerpt from, "The Stressed German Model":

Germany's health-care system was brought to life in 1883 by Otto von Bismarck and became the model for virtually every such state-directed national insurance plan since. Alas, the German system is starting to come apart at the financial seams. Germany's system relies on a handful of state-supported health insurers. This week they informed the government that the system was on the brink of a financial shortfall equal to nearly $11 billion.

There's no reason to think that state-controlled health insurance will work any better in the United States.

Will The Baucus Plan Really Save Money?

Um, no.

And Mark Tapscott explains why not.

Paying the Health Tax in Massachusetts

In the October 9, 2009 Wall Street Journal, Wendy Williams explains how the Massachusetts mandatory insurance has harmed her and her husband.

Here are some excerpts from her article, "Paying the Health Tax in Massachusetts":

My husband retired from IBM about a decade ago, and as we aren't old enough for Medicare we still buy our health insurance through the company. But IBM, with its typical courtesy, informed us recently that we will be fined by the state.

Why? Because Massachusetts requires every resident to have health insurance, and this year, without informing us directly, the state had changed the rules in a way that made our bare-bones policy no longer acceptable. Unless we ponied up for a pricier policy we neither need nor want -- or enrolled in a government-sponsored insurance plan -- we would have to pay $1,000 each year to the state.

...IBM seems like a rock of stability compared to the state of Massachusetts. It's apparent that state health-care policies can change at the whim of politicians in Boston, and we might not be able to adjust to the new rules. The way we figure it, if we sign up for a state-subsidized plan we will be at the mercy of the state.

So we are sticking with our plan and paying the tax. But what bothers me most is that a similar health-care mandate is being proposed in Washington, and some of the same promises that were made here are being made again -- such as that the mandate will never hit middle-class folks with a new tax.

We have been warned.

Onion: Health Care Plan Would Give Seniors Right To Choose How They Are Killed

As a change of pace, here's the latest Onion piece on health care, "Obama: Health Care Plan Would Give Seniors Right To Choose How They Are Killed".

Here's an excerpt:

WASHINGTON -- President Barack Obama held a nationally televised address Tuesday to "clarify any misunderstandings" about his health care proposal, assuring Americans that under the new bill senior citizens—and not the federal government—will have the right to choose how they are executed.

"Let me dispel these ridiculous rumors once and for all and set the record straight: Under my plan, seniors are going to be killed the way they want to be killed, end of story," said the president, who acknowledged that "wiping out" the nation's elderly population has always been his No. 1 priority. "If your grandmother would rather be euthanized in the privacy of her own home than be gutted and hanged on a high school soccer field, she is entitled to that right."

"Once again, let me be perfectly clear," Obama continued. "Seniors, rest easy knowing that I will never, under any circumstance, sign a bill that doesn't give you the option of being murdered by my administration in a manner of your choosing. I promise you that..."

(Read the full text.)

Mayo Clinic Unit Stops Accepting Medicare

The October 9, 2009 Arizona Republic reports that, "Mayo unit no longer to accept Medicare".

Here's an excerpt:

One of the Mayo Clinic's two family-medicine practices in Arizona soon will stop accepting Medicare, leaving thousands of patients to pay out of pocket for routine doctor's visits or find a new physician.

...Hospital officials called the new policy a "two-year pilot program" and said Thursday that the changes are necessary because of low Medicare reimbursement rates.

..."Medicare now only covers about half our costs," [vice chairman of the executive-operations team at Mayo Clinic of Arizona, Dr. R. Scott] Gorman said.

If a "Medicare-for-all" system were implemented at the national level, expect to see more doctors declining to accept such patients.

This again illustrates the principle that "coverage" does not equal care.

(Via @aemenefee.)

WSJ: How the U.S. Government Rations Health Care

The September 30, 2009 Wall Street Journal featured a piece by Scott Gottlieb explaining, "How the U.S. Government Rations Health Care".

Gottleib shows how the bureaucracy in programs such as Medicare leads to bad spending decisions and de facto rationing. Yet this is the program being touted as model for "universal" health care?

Read the whole thing.

Which Insurer Denies the Most Claims?

The answer may surprise you.

Teresi: Free Market Best For Health Insurance Reform

The October 7, 2009 Colorado Springs Gazette has published an excellent OpEd by Amanda Teresi entitled, "Return to free market best hope for health insurance reform".

Here's an excerpt:

...In a free market, insurers and consumers voluntarily make an agreement to mutual benefit. When politicians dictate what policies and services will be sold and to whom, those politicians undercut people's ability to reach insurance agreements that work best for them.

In a free market, companies that don't take care of their customers risk losing them to a competitor, creating an incentive to provide the best service at the best price. When there is no free market for health insurance, there is less competition, resulting in less need to out-bid competitors for our business.

A free market also depends on the reliability of contracts. Once a contract between an insurance company and an individual is made, breaking that contract should be punishable by law. This means that if an insured individual's coverage is dropped when they find a medical problem that was covered, they should be able to sue the company for breach of contract.

It is true that many people today with pre-existing conditions have trouble finding affordable coverage. But politicians, not a free market, created the problem.

Currently, employer-based insurance makes it difficult for those with pre-existing conditions to stay on the same insurance because it is not portable. Current tax law that favors employer-sponsored insurance over directly purchased plans makes it more likely individuals will be tied to their employer for insurance.

Insurance is meant to hedge against unforeseen, catastrophic events or illnesses, as opposed to covering every doctor visit. If it were, protection against major health problems or accidents would be possible for a majority of individuals and pre-existing conditions would be much less of a worry for those who need coverage...

(Read the full text of "Return to free market best hope for health insurance reform".)

Thank you, Amanda, for making these excellent points!

WSJ: The Lesson of State Health-Care Reforms

In the October 6, 2009 Wall Street Journal, Peter Suderman reviews "The Lesson of State Health-Care Reforms".

Let's go through the list of states that attempted Obama-like policies in the past:

New York - FAIL
Massachusetts - FAIL
Maine - FAIL
Tennessee - FAIL

Suderman concludes:

Despite these state-level failures, President Barack Obama and congressional Democrats are pushing forward a slate of similar reforms. Unlike most high-school science fair participants, they seem unaware that the point of doing experiments is to identify what actually works. Instead, they've identified what doesn't -- and decided to do it again.

(Read the full text of "The Lesson of State Health-Care Reforms".)

John Lewis At National Press Club

Professor John David Lewis, PhD, of Duke University gave the following talk at the National Press Club in Washington D.C. on September 19, 2009 during a public briefing on the "Joint Defense of Freedom in American Medicine" sponsored by Americans for Free Choice in Medicine.

Here is Professor Lewis' lecture on the theme of "Individual Rights & Health Care Reform" (in 3 parts).

Part 1:



Part 2:



Part 3:

Positive Report on Retail Health Clinics

The September 30, 2009 Denver Post has a positive story on retail health clinics. One excerpt from "Coloradans shop for health care in retail-store clinics":

National researchers have now officially blessed both the quality and the pricing of fast-growing retail clinics. They say the care is as good as, and sometimes better than, emergency rooms and regular doctors' offices, and the fees are dramatically lower.

While the limited-care retail centers may not solve the entire health care mess on their own, Dr. Ateev Mehrotra said they are "intriguing."

Burgeoning retail health outlets are "providing care at a lower cost, at a higher quality, where it's more convenient," Mehrotra said. He wrote a RAND Corp. study in August praising costs and outcomes at retail clinics treating ear infections, sore throats and urinary tract infections.

(Read the full text of "Coloradans shop for health care in retail-store clinics".)

These clinics represent a small step in the direction of free market health care. It's no surprise that the result is good quality care, shorter waits, and lower costs.

(Via Brian Schwartz.)

The Canadian "Private Option"

Ari Armstrong alerted me to two recent stories about the "private option" in Canadian health care:

"In Canada, a move toward a private healthcare option"
By Kim Murphy, Los Angeles Times, 9/27/2009

"Canada's lack of special care empowers brokers"
By Valerie Richardson, Washington Times, 9/28/2009

From the first article:

...More than 70 private health providers in British Columbia now schedule simple surgeries and tests such as MRIs with waits as short as a week or two, compared with the months it takes for a public surgical suite to become available for nonessential operations.

"What we have in Canada is access to a government, state-mandated wait list," said Brian Day, a former Canadian Medical Assn. director who runs a private surgical center in Vancouver. "You cannot force a citizen in a free and democratic society to simply wait for healthcare, and outlaw their ability to extricate themselves from a wait list."

At a time that more Canadians are recognizing the merits of private health care over the public system, too many American politicians are trying to push our country towards a "public plan".

Do Americans really want to give their lives over to the government like that?

Swiss Hit -- Or Miss?

As more American realize that they don't want to duplicate either the Canadian or British health care systems, proponents of "universal health care" have been casting about for other less well-known countries to propose as models.

The latest model being pitched as a "hit" is Switzerland. For example, the September 30, 2009 New York Times featured a piece by Nelson Schwartz entitled "Swiss Health Care Thrives Without Public Option".

In particular Schwartz claims:

The Swiss government does not "ration care" -- that populist bogeyman in the American debate -- but it does keep down overall spending by regulating drug prices and fees for lab tests and medical devices. It also requires patients to share some costs -- at a higher level than in the United States -- so they have an incentive to avoid unnecessary treatments. And some doctors grumble that cost controls are making it harder these days for a physician to make a franc.

But what does that really mean?

Fortunately, Linda Gorman of the Independence Institute has looked more closely into the Swiss system and noted the following:

...[W]hen the Swiss replaced mixed government and private financing of health care with mandatory health insurance in 1994, the resultant cost cutting efforts both damaged quality and introduced a lot of waste into the Swiss system.

In 2002, the government banned all new medical practices to control costs. The ban runs until 2010. Until then, a new physician cannot open a practice unless an old physician retires or dies. Efforts to save money by merging hospitals have created irrational allocations of specialty units. Alphonse Crespo, a Swiss orthopedic surgeon, reports that resources are now so poorly distributed that "because of the mergers, the distances between specialty units in some cantons are large." Patients needing a urologist may have to go to another hospital. Patients have actually been put in helicopters just for a consultation. Researchers at the University of Lausanne report difficulties in accessing psychiatric care, rehabilitation care, long-term care, and orthopedic care. Rationing is more likely to be imposed on the elderly and those with "a poor level of social integration."

...Between 1971 and 2005, the average inflation-adjusted general practitioner salary in Switzerland fell by 37 percent before taxes. More young doctors are choosing to become specialists because the pay is better and the work is more interesting. There is a developing shortage of primary care. In March, swissinfo.ch reported that general practitioners held the first doctors' strike "in living memory." The government had decided to further ration practitioner access to laboratory tests.

With mandatory health insurance premiums set to rise 15 percent this year, the Swiss government is proposing more cuts. The cuts include restrictions on the type of health insurance that can be offered, restrictions on outpatient services, and a "patient tax" that would require people to pay for their first six visits to a doctor’s office.

...Even with the cuts, in some cantons, the mandatory premium increase may be as much as 20 percent.

(To see her references and hyperlinks, go to the full text of her post "Taking Another Look at Swiss Health Care".)

Restricting new medical practices? Raising prices to limit access? Limiting the availability of lab tests?

Sounds an awful lot like rationing to me.

Rather than being a hit, their system is a giant Swiss Miss...

Armstrong: Pay your own doctors

The October 1, 2009 Colorado Daily has published Ari Armstrong's latest OpEd, "Pay Your Own Doctor". Here's an excerpt:

While Barack Obama pretends that insurance companies are at fault, the reality is that federal tax distortions drove insurance into the expensive, non-portable, employer-paid system. This tax distortion explains why Americans tend to use insurance as pre-paid health care, rather than to cover unexpected, high-cost treatments.

Even as Obama demonizes the insurance companies that federal policies have coddled and favored, his policies expand political favoritism. Obama wants to force you to buy politically controlled insurance, on penalty of huge fines.

If you want to control your health care, you should advocate free- market reforms that expand medical competition, not more political controls. The experiences my wife and I have had with a Health Savings Account (HSA) and high-deductible insurance illustrate the benefits...

(Read the full text of "Pay Your Own Doctor". His piece also appears in the October 2, 2009 Denver Daily News under the title, "Health and the empowerment of payment".)

Hsieh OpEd in Denver Post: "The Real Stakes"

The October 1, 2009 Denver Post has published my health care OpEd, "The Real Stakes".

Here's the opening:

During President Obama's recent speech to Congress, he stated that health care was "a moral issue; at stake are not just the details of policy, but fundamental principles of social justice and the character of our country."

President Obama is right, but not in the way that he means. Thousands of Americans recently assembled at Tea Parties across the country precisely to oppose the fundamental principles behind the President's plan. These protests were not just about health care, but about the proper scope of the government -- and ultimately, the future of America...

(Read the full text of "The Real Stakes".)

Hsieh CSM OpEd - "Health Care in MA: Warning for America"

The September 30, 2009 Christian Science Monitor has published my latest OpEd, "Health Care in Massachusetts: A Warning for America".

Here is the introduction:

In his recent speech to Congress, President Obama could have promoted healthcare reforms that tapped the power of a truly free market to lower costs and improve access. Instead, he chose to offer a national version of the failing "Massachusetts plan" based on mandatory health insurance. This is a recipe for disaster.

Three years ago, Massachusetts adopted a plan requiring all residents to purchase health insurance, with state subsidies for lower-income residents. But rather than creating a utopia of high-quality affordable healthcare, the result has been the exact opposite -- skyrocketing costs, worsened access, and lower quality care...

(Read the full text of "Health Care in Massachusetts: A Warning for America".)

It's also mirrored here at Yahoo! Opinion.