Knope: Bernie Madoff for Health Czar

Dr. Steven Knope has penned another OpEd on our current unsustainable system of government-managed health care. Here are some excerpts, but read the whole thing:

Bernie Madoff for Health Czar

...As I mentioned in my first healthcare letter, we do not have the money to pay for our current nationalized healthcare experiments, which we call Medicare and Medicaid. To open yet another financial wound, we do not have the money to fund Social Security over the next 30 years. So before you buy something expensive, it would seem wise to ask if you can afford to maintain it. The unfunded liabilities for Medicare and Medicaid alone have been estimated at $47-trillion dollars. This is the cost of insuring 30-million Americans. We do not have enough money for these existing programs, much less to expand these services to cover the lives of 304 million Americans.

What I am telling you is that Medicare and Medicaid will run out of money. The system will go bankrupt. It will be like AIG, which was "too big to fail", but which has failed despite pouring billions into it. People in my generation, and those younger, are "investing" in a Medicare system which promises to pay big dividends in healthcare dollars during our retirement. However, the politicians running the plan understand that this is a fiscal impossibility. It is dishonest. That money will not be there for us. It will be all used up by the time we reach age 65. The reason is that there will not be enough young workers to fund the Medicare system and keep it going for the aging baby boomers. Does this scenario sound familiar to you? Have you recently read about other people who have set up scams like this? You guessed it. Medicare is a Ponzi scheme.

...So why is a doctor like me engaging in "politics" or going on a rant about the healthcare dollar? Because money is a necessary part of the discussion! When you try to buy something on a credit plan that you can't afford, it is only a matter of time before that something is repossessed. Before we scrap private healthcare and open another credit card for nationalized healthcare, we should think about what we will do when we can't afford the payments. The answer is that people won't get the medical care they need, which is what happens in Canada. In all seriousness, I'd start putting away some extra cash in the bank for the day when Bernie Madoff or his sons reject your request for an MRI of the brain. You'll need that extra money to travel to Dubai for your MRI or your knee replacement - to purchase quality healthcare in a free-market system that is not dominated by a government rationing panel.

(Read the rest here.)

For more advice from Dr. Knope on how protect yourself from the upcoming fiasco of "universal" Obama-Care, read this post.

Slowing The Push Towards Fast-Tracking

Democrats in Congress are getting close to a deal which would allow them to "fast track" their plans for government-run "universal health care".

As former US Senator John Sununu notes in the April 27, 2009 Wall Street Journal, this would allow a bare miniumum of senators to impose "National Health Care With 51 Votes".

Part of the Congress' apparent urgency on this issue is that they may believe that momentum is slipping away from them unless they strike quickly. The Tea Party protests have galvanized many Americans against further government takeovers of the economy. And David Catron notes that public support is shrinking for "universal health care".

And as we've noted, most Americans are pretty happy with their current health care. But they are legitimately concerned about rising costs. And they've also been led (or misled) to believe that everyone else is having problems (thus justifying more government intervention).

All of these signs indicate that free market reforms might receive a fair hearing -- if Congress decides that it wants to take a deep breath, not rush headlong into creating any new massive government programs, and have a open honest discussion about the kinds of reforms we actually need to correct our current problems.

Americans have already been burnt by the Congressional rush to pass the "stimulus" bill -- which many legislators now acknowledge that they didn't even read before voting for it. Congress should not make the same mistake by rushing to pass "universal health care" legislation.

Our friend Hannah Krenning and my wife Diana Hsieh have sent the following letters to our Colorado Senators Michael Bennet and Mark Udall:

Dear Senators Bennet and Udall,

I have read the recent Reuters article and want to register my vehement objection to this underhanded approach to the debate on health care. I do not want government involvement in my health care decisions. I want a free-market approach to medicine.

Creating new government tentacles to surround my physical well-being and doing so in a way that "rams" it through (Reuters words, not mine) betrays the unprecedented power-lust present in Washington these days. Your participation in this "deal" would be a gross betrayal of your constituents and the Constitution. I hope you will find the conscience and backbone to resist participation.
Sincerely,

Hannah Krening
Larkspur, Colorado


Dear Senators,

I am writing to express my dismay over the prospect that some kind of socialized medicine (like mandatory, universal coverage insurance) will be imposed on America by "fast-tracking" health care reform. It is grossly irresponsible for the legislature to take such drastic action without proper debate and discussion. We've already seen too many frantic attempts to do something quick -- anything, no matter how irresponsible -- over the past few months. It's time for the legislature to slow down -- preferably before you grind the economy to a halt.

You might have won an election, but you have no right to dispose of anyone else's life, health, and wealth. For you to attempt to ram socialized medicine down our throats -- without so much as offering Americans the chance to form and express their opinions on the matter -- is morally wrong. It's also a sign that your position is weak -- that you cannot persuade Americans of the merits of your views by any rational appeal to facts. Indeed, you have reason to worry: socialized medicine in any form is always disaster.

I do not want any government involvement in my health care. I do not wish my life and health to be subject to the whims of government bureaucrats. I support the elimination of the whole horrid web of entitlements and controls that are strangling medicine while driving up costs. The free market has not failed: your government controls have failed. Repeal them -- and restore the doctor-patient relationship to its properly private sphere.

Diana Hsieh
Sedalia, CO

(Disclaimer: FIRM is non-partisan and does not support either the Democratic or Republican parties. FIRM does support free market health care reforms.)

Goodman: A Prescription for American Health Care

The March 2009 issue of Imprimis features an article by John Goodman on the future of American health care. The economic picture he paints is pretty bleak.

Here is an excerpt:

A Prescription for American Health Care

...Social Security and Medicare have been spending more than they are taking in for quite some time. As the Baby Boomers start retiring, this deficit is going to grow dramatically. In 2012, only three years from now, Social Security and Medicare will need one out of every ten general income tax dollars to make up for their combined deficits. By 2020 -- just eleven years down the road -- the federal government will need one out of every four income tax dollars to pay for these programs. By 2030, the midpoint of the Baby Boomer retirement years, it will require one of every two income tax dollars. So it is clear that the federal government will be forced either to scale back everything else it's doing in a drastic way or raise taxes dramatically.

Any form of "universal health care" will merely worsen these problems and lead to draconian rationing.

Fortunately, he also describes some free market solutions that would address these problems.

We still have time to act. The big question is whether we will have the political will to do so.

(Disclaimer: With respect to one of the solutions Goodman discusses, I do believe we should allow people to use Health Savings Accounts to pay for their future health care expenses. However, Goodman's piece is slightly ambiguous as to whether he believes this use of HSAs should be voluntary or mandatory. I believe this should be voluntary, and I hope Goodman would agree.)

Gratzer on Socialism and Cancer

David Gratzer, MD, discusses some of the flawed comparisons between health care in the US and other countries in this essay from the Winter 2009 issue of The New Atlantic, "Socialism and Cancer".

Here are a few excerpts:

...In a 2000 assessment of the world’s health systems, the World Health Organization (WHO) ranked the U.S. system thirty-seventh -- lower than even that of Colombia. In Sicko, Michael Moore’s 2007 documentary comparing health care systems, the U.S. system is portrayed as broken and cruel. A Commonwealth Fund study published in early 2008 surveyed nineteen nations in terms of preventable death and ranked the United States last.

This unrelenting stream of negativity has shaped the debate over U.S. health care reform. Consumers are souring on U.S. health care; policymakers are weighing the political and economic costs of changes to the system; and, according to one recent poll, even doctors—historically the most vocal opponents of socialized medicine—now support the idea of government-run health care.

...Ask yourself a simple question: If your daughter had a bad cough, would you call your pediatrician -- or get her on a flight to Bogota, Colombia?

While international comparisons make for good headlines and moving speeches -- Democrats, in particular, like to cite the WHO findings on the stump -- these studies are frequently quite limited and flawed. Most of the work is either highly ideological (Michael Moore's cannot withstand a basic fact-check) or confuses health with health care (the Commonwealth Fund study reflects the fact that Americans smoke more and exercise less than citizens in many other Western countries). The WHO study -- intolerant of any patient-borne expenses, heavily rewarding "equity," and focusing on smoking rates and other public health measures—suffers from both these problems of ideology and confusion. That is how it could reach the conclusion that America's health care lags behind Colombia's -- a conclusion no patient or doctor would second with his feet. (And indeed, even the WHO study had to concede that the American health care system was more responsive to citizens' expectations than any other nation's system.)

Gratzer correctly argues that one should analyze how well a country's health system does once people actually become ill, and he uses cancer diagnosis and treatment as one measure, because we have good comparative data on this set of diseases:

Of course, there is more to health care than a response to one disease -- yet, with the focus of so many governments on cancer care, with the common nature of this illness, and with the excellent statistics available, it's fair to use it as a proxy for health care performance. How does the United States fare? Excellently, two major studies suggest.

...Looking at specific cancers yields striking results: For men, the bladder cancer survival rate in the United States is 15 percent higher than the European average. With prostate cancer, the gap is even larger: 28 percent. For American women, the uterine cancer survival rate is 5 percent higher than the European average; for breast cancer, it is 14 percent higher. The United States has survival rates of 90 percent or higher for five cancers (skin melanoma, breast, prostate, thyroid, and testicular), but there is only one cancer for which the European survival rate reaches 90 percent (testicular). Lung cancer, once considered a death sentence, now has better survival rates over five years -- and Americans do better than Europeans, 16 percent versus 11 percent.

He also discusses some of the controversy over prostate cancer statistics.

He then discusses the reasons for these differences:

Why then is the United States better in overall survival? There are several contributing factors. Certainly the ability of cancer patients to get access to new medicines is helpful.

...And socialized health care systems don't just lag on cancer drugs -- new technologies, too, are less available. The problem is well illustrated by the story of Deb Maskens, a mother of two young children who suffers from kidney cancer...

Government-managed and -funded health care systems are not simply averse to new drugs and technologies. These systems are often plagued by rationing through waiting. People wait for diagnostic tests and specialist consults, delays that allow cancers to grow and spread. The diagnostic gap is well documented...

And he offers some concluding thoughts:

Government-run health care systems control costs by rationing care. In contrast, for all its flaws, the American health care system does not hesitate to spend, eager to embrace new technologies and treatments. And that’s why Americans do so much better.

...Cancer care in London or Paris may not seem relevant to Americans in Las Vegas or Providence. But in the coming years, Americans will need to think very hard about their health care system. With a Democratic-controlled Congress and White House, the forces are aligned for far greater government involvement. This does not bode well: value in health care -- as in the other five-sixths of the economy -- will come from competition and choice, not a government committee.

...That is why American health care reform demands an American-made solution, one that respects the power of markets and competition instead of putting trust in government bureaucrats.

Overall, he makes many arguments that politicians should heed.

Anyone interested in more discussion along these lines can find it in his book, "The Cure: How Capitalism Can Save American Health Care" (now in paperback.)

Who Should Control Your Health Care?

In his April 20, 2009 essay at PajamasMedia.com, Jeff Emanuel warns about the latest move by the government to wrest control of medical decision making from doctors and patients. Here's an excerpt from his article:

Who Should Control Your Health Care?

Who should have control over your medical care: your family doctor or a bureaucrat you've never met whose sole job is to look out for the government's financial bottom line?

That question is being debated in court right now, as three states are currently seeking a ruling from a federal judge that the final say in an individual's medical treatment lies with the government and not with that patient's doctor...

Read the whole thing.

The state claims that because it is paying for the care, it should have some say in how that money is spent.

If the US proceeds to adopt any sort of government-run universal health care, then this argument will become the norm -- as it already is in Great Britain and Canada.

The inevitable end result will be rationing.

This is just the latest of the many warning signs that Americans have heard about government-run health care. The critical question is whether we'll heed them before it's too late.

Washington Times on Rationing

The April 21, 2009 Washington Times has published their editorial warning about health care rationing under the Obama plan. Here is an excerpt:

Rationing health care

It doesn't matter what your doctor says; the Obama administration plans to decide if you will have cancer treatment or heart surgery.

Appearing on "Meet the Press" on Sunday, Lawrence H. Summers, President Obama's chief economic adviser, stated, "Whether it's tonsillectomies or hysterectomies ... procedures are done three times as frequently [in some parts of the country than others] and there's no benefit in terms of the health of the population. And by doing the right kind of cost-effectiveness, by making the right kinds of investments and protection, some experts ... estimate that we could take as much as $700 billion a year out of our health care system."

Let's be clear - Mr. Summers is talking about rationing...

They correctly note:

Nationalized health care puts bureaucrats - not doctors - in charge of deciding who needs what medical treatment. Rationing is inevitable under these schemes. That's one reason Mr. Obama's universal heath care plans must be stopped.

Admin: Twitter Feed

FIRM now has a Twitter account. I'll see if I can automatically mirror the blog posts onto the Twitter feed.

WSJ: When Doctors Opt Out

The April 17, 2009 Wall Street Journal published an OpEd by Dr. Marc Siegel addressing one of the biggest fallacies in the debate over universal health care, namely the conflation of "coverage" with care.

Here's an excerpt:

When Doctors Opt Out
We already know what government-run health care looks like.

Here's something that has gotten lost in the drive to institute universal health insurance: Health insurance doesn't automatically lead to health care. And with more and more doctors dropping out of one insurance plan or another, especially government plans, there is no guarantee that you will be able to see a physician no matter what coverage you have.

...More and more of my fellow doctors are turning away Medicare patients because of the diminished reimbursements and the growing delay in payments. I've had several new Medicare patients come to my office in the last few months with multiple diseases and long lists of medications simply because their longtime provider -- who they liked -- abruptly stopped taking Medicare. One of the top mammographers in New York City works in my office building, but she no longer accepts Medicare and charges patients more than $300 cash for each procedure. I continue to send my elderly women patients downstairs for the test because she is so good, but no one is happy about paying.

Read the whole thing.

Governments can make all sorts of promises of theoretical "coverage", but that is not the same thing as delivering actual medical care. And as we've seen in countries such as Canada and the UK, the people are all "covered" but they must often wait months for medically necessary care. And in some case, the government simply denies their care.

David Hogberg summarizes this issue nicely in his OpEd in the June 9, 2007 Washington Times:

'Health care,' more or less

...Believing health care and health insurance are the same thing easily leads to some mistaken, if not dangerous, notions. It leads to the beliefs that (1) universal health care and universal health insurance are the same; and (2) that if a nation has universal health insurance, where the government pays for every citizen's health care, that nation will have universal health care, where citizens will have ready access to health care whenever they need it. As the experience of other nations shows, however, universal health insurance often leads to very restricted access to health care.

There's one final danger that also needs to be raised. If doctors continue to opt out of government-run health care, then the next logical step will be to force them to treat patients. This is inevitable logic of the mistaken notion that health care is some sort of a "right".

Rights are freedoms of action (such as the right to free speech), not automatic claims on goods or services that must be produced by others. There is no such thing as a "right" to a car -- or a tonsillectomy.

Instead, people do have the right to seek health care from providers on mutually agreeable terms free from government interference. The government should protect that right.

Whenever government attempts to guarantee an alleged "right" to health care, it can only do so by violating the actual rights of taxpayers (who must pay for that service) and the health care providers (who must work on the governments' terms, rather than on their own terms). And that is what is fundamentally wrong about "universal health care".

Two From Pacific Research Institute

John Graham and the Pacific Research Institute have published two worthwhile health care items recently.

The first is a short paper on the problems with the proposed "government plan", entitled "Government Health Care Competition: The Audacity of Hope Against Experience".

Graham's bullet points include:

• Instead of a new government plan to compete against private health insurers, President Obama needs to remove the barriers that the government currently maintains against individual choice.

• Even the most benign government enterprise, the U.S. Postal Service, cannot compete against private couriers without a monopoly on basic letter delivery.

• By proposing to eliminate Medicare Advantage, a program that allows private insurers to compete for Medicare dollars, President Obama demonstrates that he cannot tolerate private competition against a government program.

The full paper is available here. (Note: In a fully free market, there would be no need for Medicare Advantage, because Medicare would no longer exist.)

The second item was their blog post, "Is Health Care A 'Right'? Not According to Governments Who Run Health Care".

Apparently in Canada, some provincial governments are arguing that health care is not a right, in order to protect its control over state-run medicine and to put providers of private medicine out of business. Here are a few excerpts from their post:

The advocates of government-run medicine base their claims on the notion that health care is a "right." They thus attempt to occupy the moral high ground over those who advocate reforms based on the principle of individual choice.

...[I]n British Columbia, the monopolistic provincial health plan is suing Dr. Day for allegedly receiving direct payment from patients for performing surgeries in his clinic. What makes the case remarkable is that the provincial monopolists have launched their legal attack against Dr. Day based on their new-found conviction that Canadian citizens do not, in fact, have a right to health care.

...As this episode shows, once the state takes over, the citizen hasn't got a chance. Governments are not competent to provide health care as a "right," any more than they would be competent to provide shoes as a "right." Therefore people who define their right to health care differently will have to continue to fight the state to recognize it.

How should it then be defined? When I'm speaking publicly on health reform, people sometimes ask: "Do you think that health care is a human right?" My answer is: "Yes, I believe that you have a right to spend your own money on health care of your choice, free of government interference."

(Read the rest here.)

In my opinion, this latter point is one of the most important issues in the health care debate -- namely that rights are freedoms of action, rather than automatic entitlements to goods and services that must be produced by others.

Fortunately, Dr. Leonard Peikoff makes this case with great eloquence and clarity in his essay, "Health Care Is Not A Right".

Hannan on UK Health Care

Daniel Hannan, a UK Member of the European Parliament, discusses the disaster of universal health care in Great Britain:



(Via David Catron.)

Two NCPA Analyses Worth Reading

The National Center for Policy Analysis (NCPA) has put out a pair of Brief Analyses worth reading. Click through to each one for more information on the topics listed.

Brief No. 651, "Exposing the Myths of Universal Health Coverage"

Myth No. 1: Employer Mandates Would Make Coverage Affordable.
Myth No. 2: Insurance Costs Can Be Limited to 10 Percent of Income.
Myth No. 3: Guaranteed Issue and Community Rating of Premiums Protect Consumers.
Myth No. 4: Expanding Government Insurance Improves Access to Care.

Brief No. 652, "The Folly of Health Insurance Mandates":

Problem: Employer Mandates Are a Tax on Employees.
Problem: Employer Mandates Are Limited by Federal Law.
Problem: Individual Mandates Are Difficult to Enforce.
Problem: Individual Mandates Are Vulnerable to Special Interests.
Problem: Mandated Acceptance Raises Premiums.
Right Solution: A National Insurance Market.

Hard Tax on Soft Drinks?

[In honor of Tax Day, I thought this story was appropriate. -- PSH]

Politicians and would-be do-gooders are continuing to push for massive taxes on soft drinks, according to this story in the April 8, 2009 Science News:

Coming: Hard tax on soft drinks?

In a commentary released today (ahead of print) by the New England Journal of Medicine, Yale's Kelly Brownell and New York City's health commissioner, Thomas Frieden, argue that taxing sugary drinks could go a long way toward putting a brake on obesity. It won't make fat people slim. But it could slow or prevent plump consumers from ballooning into obese individuals, they argue...

Although it maybe unwise to consume too much sugar, note that Brownell and Frieden rely on collectivist arguments to justify government intervention:

Ounces of Prevention -- The Public Policy Case for Taxes on Sugared Beverages

...The contribution of unhealthful diets to health care costs is already high and is increasing -- an estimated $79 billion is spent annually for overweight and obesity alone -- and approximately half of these costs are paid by Medicare and Medicaid, at taxpayers' expense. Diet-related diseases also cost society in terms of decreased work productivity, increased absenteeism, poorer school performance, and reduced fitness on the part of military recruits, among other negative effects.

(Their full NEJM commentary can be read here.)

But as I noted in my January 7, 2009 piece in the Christian Science Monitor, "Universal healthcare and the waistline police":

...Of course healthy diet and exercise are good. But these are issues of personal -- not government -- responsibility. So long as they don't harm others, adults should have the right to eat and drink what they wish – and the corresponding responsibility to enjoy (or suffer) the consequences of their choices. Anyone who makes poor lifestyle choices should pay the price himself or rely on voluntary charity, not demand that the government pay for his choices.

Government attempts to regulate individual lifestyles are based on the claim that they must limit medical costs that would otherwise be a burden on "society." But this issue can arise only in "universal healthcare" systems where taxpayers must pay for everyone's medical expenses.

The growing political push towards universal health care and the related push towards nanny state controls are mutually reinforcing. Americans will soon have to decide who should be in control of their lives and their health -- the individual or the government. It's not just our health at stake, but our basic freedoms.

WSJ on the Public Plan

The April 12, 2009 Wall Street Journal has a good analysis of the implications of the proposed public plan:

The End of Private Health Insurance
When government 'competes,' guess who always wins?

Above every other health-care goal, Democrats this year want to institute a "public option" -- an insurance program financed by taxpayers, managed by government and open to everyone, much like Medicare. This new middle-class entitlement is the most important debate in Congress this year, because it really is the last stand for anything resembling private health insurance.

This public option will supposedly "compete" with private alternatives. As President Obama likes to put it, those who are happy with the insurance they have now can keep it -- and if they happen to prefer the government offering, well, gee whiz, that's the free market at work...

The WSJ identifies one extremely crucial point.

We must not let the advocates of the public plan portray this as any kind of "free market" measure. Instead, it must be explicitly identified for what it is -- government control over a major sector of economy. One can debate whether this sort of statism is more properly called fascism or socialism, but it's definitely not the free market!

The article continues:

...Under the aegis of a level playing field, all private plans will be forced to offer benefit packages similar to those in the public option. They will also be required to accept all comers, regardless of pre-existing conditions, and also be forced to offer similar rates to all enrollees, ending the ability to manage risk through underwriting. Any private plan will essentially become a public utility where government decides what products it must offer and how much it can charge.

Democrats couldn't be clearer on this point. House baron Pete Stark -- who thought HillaryCare was too moderate and has long favored Medicare for all -- said at a recent hearing that currently "We have no mechanism to directly push the private sector to do delivery system reform and address rising costs." But the public option, he added, would force private insurers to "modernize," which seems to be his term for industrial policy.

Read the rest here.

The coming government takeover of health care will make their firing of an automobile CEO seem like small change in comparison.

For additional thoughts, I highly recommend this summary by InsureBlog.

Ponnuru on Universal Coverage

The April 8, 2009 New York Times published an interesting OpEd by Ramesh Ponnuru entitled, "The Misguided Quest for Universal Coverage".

Overall, his economic analysis is good.

He notes that the magnitude of the cost-shifting caused by the uninsured has been greatly overexaggerated and that Massachusetts-style mandated insurance will simply drive up costs to benefit special interests with political "pull".

And he also correctly calls for eliminating the current employer-based system of health insurance (which only exists because of bad government tax policies giving those employer plans unfair preferential treatment.)

He also attempts to address the moral dimension as follows:

The moral case for universal coverage is that we have an obligation to see to it that the poor and the near-poor have access to good health care. But universal coverage is only one way of realizing that goal, and not necessarily the best one. For people with pre-existing health problems, for example, direct subsidies would probably be more efficient than rigging insurance markets to make sure they are covered.

In other words, he doesn't argue the case that one person should not be forced to provide another person's health care because it would be a violation of individual rights. Instead, he apparently grants the statists' premise that there is some legitmate government role in guaranteeing "access".

Although "direct subsidies" might be a good temporary intermediate step towards complete privatization of health care, it should not be part of any permanent free market reform. Instead, those who need health coverage but cannot afford it themselves should rely on private charity, as Dr. Peikoff notes in his essay, "Health Care is Not A Right".

Furthermore, if one wants to really improve access to health care, then eliminating various licensing laws that artificially restrict the supply of health care providers would be a far better approach.

Nonetheless, I'm glad that the New York Times has published Ponnuru's piece. His ideas deserve to be part of the debate.

But it also highlights the need for a more integrated economic and moral defense of free market health care reforms.

Schwartz on Colorado HB 1293

The April 7, 2009 Boulder Daily Camera has published Brian Schwartz's commentary on HB 1293:

Prepare For More Expensive Medical Insurance

The Senate Finance Committee has approved Colorado House Bill 1293. The Denver Post claims that this bill would reduce your insurance premiums. Not so. They will increase.

The Post claims HB 1293 would "increase the number of those covered by government insurance and thereby reduce cost-shifting" from the uninsured and under-insured. Sure, this cost-shifting increases premiums costs. But the cost-shift from those with government insurance far exceeds that from the uninsured.

In Colorado, the cost-shift from the uninsured increases annual premiums by $85 per insured Colorado resident. For the data behind this, search on-line for "uninsured cost-shift scam." Compare this to Medicare and Medicaid: Bloomberg recently reported that "Medicare and Medicaid increase the annual cost of covering a family of four by $1,788." As if the taxes we must pay to fund Medicare and Medicaid weren't enough.

If politicians want more affordable insurance they should repeal prohibitions that make it so expensive. For example, HB 1256 would allow Coloradans to buy insurance available in other states. In four states average annual premiums for individual plans cost $500 less than in Colorado. For family plans the potential savings increases to $1,000 in five states, according to America's Health Insurance Plans.

Government-controlled health care in the U.S. is a disease masquerading as its own cure.

Brian T. Schwartz

Thank you, Brian!

Rhoads on "Comparative Effectiveness Research"

Jared Rhoads, director of the Lucidicus Project, has written another excellent OpEd, this time on the dangers of "comparative effectiveness research". This is an important part of President Obama's intended health care "reform", and is yet another method by which the government will control how physicians practice medicine.

Here is his piece in its entirety, reposted with his permission:

It's not about "effectiveness"
By Jared M. Rhoads

Last month, President Obama signed into law the American Recovery and Reinvestment Act, a piece of legislation intended to stimulate the economy by "laying the groundwork" for recovery with smart investments in infrastructure, jobs, and research. Among the many provisions for healthcare, the act sets aside $1.1 billion for government research to determine which treatments, drugs, and technologies are the most effective in preventing, diagnosing, and treating various conditions and disorders.[1]

From a strictly medical perspective, this type of research is intriguing because the precise risks and benefits of many treatment options are unclear, and often it is not understood why some therapies work for some patients and not for others. But why is this any business of the federal government?

Supporters of the research defend the spending on the grounds that it will help to make programs such as Medicare less wasteful. Comparative effectiveness research, they say, will ensure "responsible stewardship" of the public's funds by allowing the government to pay only for what works.[2] For example, if researchers find that some cheaper alternative works just as well across a population as a more expensive treatment, then the government could change the Medicare reimbursement structure to provide an incentive for the former and a disincentive (or outright penalty) for the latter.

Interestingly, such uses of the research findings are explicitly prohibited in the text of the Act. Section 804 stipulates that the law shall not be construed to permit the Federal Coordinating Council to mandate coverage, reimbursement, or other policies for any public or private payer based on the findings of researchers.

But that will not stop the government. In due time, Congress will strike, amend, ignore, or "provide clarification" such that it will be possible for the government to use these findings to substitute the cheapest possible care for patients, Canadian-style. Guaranteed. After all, if the findings cannot be used to inform policy making, then why bother doing the research at all?

Investing taxpayer money in the name of delivering care more efficiently does not change the fact that there is no rational justification for government involvement in healthcare in the first place. If a man is robbed at gunpoint, does it make any difference how carefully and "effectively" the thief spends the loot?

The purpose of government is to protect rights, not play universal problem-solver for all manners of health and welfare needs. To even discuss the alleged merits of such research is to evade the source of the funds (confiscatory taxes) and lend credibility to those who seek to expand the reach of government into medicine.

Comparative effectiveness research sets the stage for an unprecedented increase in the government's power to control what treatments providers can prescribe and to whom. We already have a mechanism by which to determine and reward best practices: the free market. But unless the market is allowed to operate unhampered and unfettered, we will never escape the cycle of programs breeding programs.

_____

1 H.R. 679; 111th Congress (2009): American Recovery and Reinvestment Act of 2009

2 Paduda, J. "The horrors of effectiveness research" Managed Care Matters. In his article, Paduda writes: "I'm completely disgusted with the hypocrisy of the libertarian right; those who have screamed for years about the ineffectiveness of government, ranting nonstop about how government can't do anything right, yet are now screaming even louder as government attempts to make sure they are responsible stewards of the public's funds."

IBD on the Public Plan

The April 7, 2009 Investors Business Daily has a good OpEd explaining why the proposed "public plan" will kill the private health insurance industry.

Here's an excerpt:

...President Obama and Congress' plan to offer a government health plan would ultimately be a death warrant for private health insurance. The public must be alerted.

The findings this week of the respected Lewin Group health care consulting firm should be chilling to all Americans. "The private insurance industry might just fizzle out altogether," warned John Sheils, chief author of the study, which looked at the effects of setting up federally managed insurance.

Its premiums could be 30% below the average offered by the private market, assuming Medicare payment levels. If eligibility were only extended to small businesses, individuals and the self-employed, as the president promised in last year's campaign, enrollment in that cheaper public option would reach nearly 43 million. Insurance companies would lose 32 million customers.

FIRM is non-partisan, and I am not a Republican. But I agree with this statement from the article:

"It is not a failure of the market, but the ways the market has been distorted largely due to government policies and programs," the House GOP plan states. "They have undermined the doctor-patient relationship and removed the individual patient from the decision-making process... Layering on more government control, regulation, and 'management' cannot address the problem; it will only reduce the alternatives available to individuals and families."

If this "public plan" goes through, then this will be the inevitable end result.

Ralston: Federal Health Board Is Hazardous to Your Health

Richard Ralston, executive director of Americans for Free Choice in Medicine, has written an OpEd on the dangers of the proposed Federal Health Board:

Federal Health Board Is Hazardous to Your Health

By Richard E. Ralston
March 23, 2009

Nearly a century ago, the United States Federal Reserve Bank was established. The stated purpose was to eliminate boom and bust and other fluctuations in the U.S. economy. Federal government control of banking and the money supply was declared to be absolutely necessary to eliminate recessions, panics, depressions, inflation and deflation. Federal Reserve banks were set up in major cities across America under the governance of a Federal Reserve Board in Washington, D.C. It was explained that the Federal Reserve Board would be "independent." All of its "independent" members were appointed by the President with the consent of the Senate (that is, politicians). One wonders what selection process would have made them "dependent."

A century later the Federal Reserve Bank is enshrined as an eternal institution with big staffs and impressive buildings in Washington, D.C. and throughout the country. It appears to be here forever, growing ever more powerful. Politics has never been a factor in the appointment of a board member. The country has been completely free of depressions and recessions. There has never been any inflation. The buying power of our dollars always increases. They are as good as gold. Unemployment has been abolished forever.

Based on this fabulous (i.e., fictional) record, Senator Baucus, former Senator Daschle and others have proposed the creation of a Federal Health Board to govern and ration all medical care in the United States. Such a board, we are told, would be independent from political influence, because its members would be appointed by the President of the United States. It would reduce the cost of medical care and insurance while providing everyone in the United States with all of the medical care they need or want. No new medications approved by the FDA as safe and effective, no new medical devices, no new care facilities or medical and nursing schools will be allowed without the final approval of this board.

Are Americans willing to trust the government with all of their health care requirements? Should we rely on the government to make medical decisions and place our health entirely in the hands of politicians? Should we expect the government to place our needs ahead of powerful hospital groups or public employee unions? Surely we can rely on the government to insure that there are enough medical facilities in our own communities rather than in, say, the district of a powerful committee chairman? Can we expect the Federal Health Board to establish priorities based on the public interest and not their own agendas? Will some diseases become more politically correct than others?

Based on the history of public schools in providing wonderful education to our children—without any trace of ideological indoctrination or politics—shouldn't we ask the government with the help of public employee unions to take over all the medical care of our children? Based on the currently unfunded but rapidly increasing costs of Medicare and Medicaid, shouldn't we trust the government to reduce all medical costs when it takes them over and none of us have anywhere else to go?

Based on its amazingly consistent and ever more competent management of banking and the money supply for one hundred years, should we not immediately take action to create and accept the decisions of a Federal Health Board on each personal detail of our medical care? Do we still really want to allow physicians to decide which drugs to prescribe without first getting permission from the "national health care coordinator"? Based on the spotless record of the Federal Reserve and the flawless performance of public education, what could possibly go wrong with federal control of medicine?

Or should we protect the private patient-physician relationship and the right to manage our own medical care (to the extent those things still exist) and allow investment in as many improved medications and medical devices as possible?

Richard E. Ralston is Executive Director of Americans for Free Choice in Medicine

Any American who values his or her ability to receive quality medical care in the future should heed his warnings.

It's All About the Control

I wish this were an April 1 joke, but unfortunately it isn't.

CoyoteBlog notes that, "Government health care initiatives are not about cheaper or better care. They are about control, and increased power for government officials."

He cites two stories to illustrate his point. First, via Carpe Diem:

The state is trying to shut down a New York City doctor’s ambitious plan to treat uninsured patients for around $1,000 a year. Dr. John Muney (pictured above) offers his patients everything from mammograms to mole removal at his AMG Medical Group clinics, which operate in all five boroughs. His patients agree to pay $79 a month for a year in return for unlimited office visits with a $10 co-pay.

"I'm trying to help uninsured people here," he said.But his plan landed him in the crosshairs of the state Insurance Department, which ordered him to drop his fixed-rate plan - which it claims is equivalent to an insurance policy. Muney insists it is not insurance because it doesn't cover anything that he can't do in his offices, like complicated surgery. He points out his offices do not operate 24/7 so they can’t function like emergency rooms. The state believes his plan runs afoul of the law because it promises to cover unplanned procedures - like treating a sudden ear infection - under a fixed rate. That's something only a licensed insurance company can do.

"I'm not doing an insurance business," he said. "I'm just providing my services at my place during certain hours." "If they leave me alone, I can serve thousands of patients," he said.

The second story is from the Washington Examiner:

The five plaintiffs, who now include former House Majority leader Dick Armey, are challenging a policy of the Department of Health and Human Services (DHHS) that denies Social Security benefits to anybody who refuses to enroll in Medicare.

Read that again: As the policy now stands, if you want to pay for your own health care rather than let taxpayers finance it through Medicare, government will not let you receive the Social Security benefits for which you have spent a lifetime paying taxes.

Note that nobody is trying to avoid contributing to Medicare. The plaintiffs merely want to decline the tax-funded benefits for which they already have paid. None of them want the bureaucracy, the governmental intrusions into their privacy, and the rationing of care they believe Medicare entails - so they volunteer to let taxpayers off the hook by providing their own health care coverage.

But DHHS won't let them. Or at least not if they want to receive Social Security benefits. Forfeit Medicare, says DHHS, and you must also forfeit Social Security even if you've paid for it for half a century.

In other words, the government is trying its hardest to stop individuals from using their own money to seek their own best interests through voluntary exchanges of goods and services, even if it might save the taxpayers some money.

These government policies show that it is indeed all about the control, rather than some alleged goal of promoting individuals' actual best interests.

Warnings about Obamacare

The Health Policy Consensus Group has been tracking the trends in various proposals for "universal health care" and has issued an important warning about the following elements (PDF version)) which have been floated repeatedly:

• A new government health insurance plan
• An employer "play-or-pay" mandate
• A uniform, government-defined package of benefits
• A mandate that individuals must purchase insurance
• A National Health Insurance Exchange extending federal regulatory powers over private insurance
• Federal interference in the practice of medicine through a federal health board, comparative effectiveness review, and other government intrusions into medical decision-making

Their paper discusses each point in greater detail.

I believe their economic analysis is essentially correct. The American people should know these facts.

If you're opposed to these ideas and wish to support free market health care instead, please sign the Galen petition:

Postrel on the Drug Industry

Virginia Postrel has written two superb articles on the drug industry, the risks they take in drug development, and the dangers we face as a result of government regulations on this vital industry. She also discusses the "universal health care" debate.

The first article is from the March 2009 Atlantic: "My Drug Problem":

If I lived in New Zealand, I'd be dead.

...The American health-care system may be a crazy mess, but it is the prime mover in the global ecology of medical treatment, creating the world’s biggest market for new drugs and devices. Even as we argue about whether or how our health-care system should change, most Americans take for granted our access to the best available cancer treatments—including the one that arguably saved my life.

The second is her response to reader feedback: "Defending 'My Drug Problem'".

I highly recommend reading both articles!

Knope in New York Times

Concierge physician Dr. Steven Knope was featured in this April 2, 2009 article in the New York Times, "Doctors are Opting Out of Medicare". Here are a few excerpts:

...Many people, just as they become eligible for Medicare, discover that the insurance rug has been pulled out from under them. Some doctors -- often internists but also gastroenterologists, gynecologists, psychiatrists and other specialists -- are no longer accepting Medicare, either because they have opted out of the insurance system or they are not accepting new patients with Medicare coverage. The doctors' reasons: reimbursement rates are too low and paperwork too much of a hassle.

In contrast, both patients and physicians win with private "concierge medicine":

...Dr. Knope, the author of "Concierge Medicine: A New System to Get the Best Healthcare," has this kind of practice in Tucson. His patients sign a contract agreeing to pay $6,000 a year for individuals and $10,000 a year for couples. The fee covers office visits, physical exams and phone consultations, and Dr. Knope will meet patients in the emergency room, see them in the hospital and occasionally make house calls.

A list of about 500 concierge doctors throughout the country is available on Dr. Knope's Web site, www.conciergemedicinemd.com.

Is the care worth the money? Harold and Margret Thomas, who are in their mid-70s and live in Cincinnati, spend the winter in Tucson. After many phone calls, the couple were unable to find an internist in Tucson who took new Medicare patients, so they signed with Dr. Knope in 1996. Five years ago, when Mrs. Thomas developed a blinding headache, her husband called the doctor at 8 o'clock one night, and he, suspecting an aneurysm, insisted they get to the emergency room immediately.

The doctor met them and ordered an M.R.I. and a CT scan. The tests revealed an aneurysm, and Dr. Knope found a surgeon who quickly operated. Medicare paid for the emergency room, the surgery and the hospital stay.

"If there were a concierge practice in Cincinnati, I’d be part of it there, too," Harold Thomas said.

This is the benefit when patients and physicians are allowed to contract freely for their mutual self-interest.

Crowder on Canada

In honor of April 1, here's a Steven Crowder video on Canadian health care:



(Via David Catron.)

Hsieh LTE in NY Times

The March 30, 2009 New York Times has printed my latest LTE on health care. It's the 6th one down:

Re "A Health Plan for All and the Concerns It Raises":

To the Editor:

It would be just as wrong for the government to compete with private insurers to provide health insurance as it would be for the government to compete with G.M. or Ford to build taxpayer-subsidized "public automobiles."

The unfair competition from a public plan would destroy the private health insurance industry. The inevitable result would be the rationing and other horrors of a Canadian-style single-payer system, which most Americans neither wish nor deserve.

Paul Hsieh
Sedalia, Colo., March 25, 2009

The writer, a medical doctor, is a co-founder of Freedom and Individual Rights in Medicine.

It was written in response to their March 25, 2009 story, "A Health Plan for All and the Concerns It Raises".

WSJ Warning on Massachusetts

The March 27, 2009 Wall Street Journal is warning that politicians plan on imposing a Massachusetts-style plan on the entire US. Here's an excerpt:

National Health Preview: The Massachusetts debacle, coming soon to your neighborhood.

...In Massachusetts's latest crisis, Governor Deval Patrick and his Democratic colleagues are starting to move down the path that government health plans always follow when spending collides with reality -- i.e., price controls. As costs continue to rise, the inevitable results are coverage restrictions and waiting periods. It was only a matter of time.

They're trying to manage the huge costs of the subsidized middle-class insurance program that is gradually swallowing the state budget. The program provides low- or no-cost coverage to about 165,000 residents, or three-fifths of the newly insured, and is budgeted at $880 million for 2010, a 7.3% single-year increase that is likely to be optimistic. The state's overall costs on health programs have increased by 42% (!) since 2006.

...Which brings us to Washington, where Mr. Obama and Congressional Democrats are about to try their own Bay State bait and switch: First create vast new entitlements that can never be repealed, then later take the less popular step of rationing care when it's their last hope to save the federal fisc.

The consequences of that deception will be far worse than those in Massachusetts, however, given that prior to 2006 the state already had a far smaller percentage of its population uninsured than the national average. The real lesson of Massachusetts is that reform proponents won't tell Americans the truth about what "universal" coverage really means: Runaway costs followed by price controls and bureaucratic rationing.

Read the whole thing.

The Massachusetts plan has neither controlled costs nor provided "universal coverage". Adopting such a flawed plan at the national level will merely multiply our problems 50-fold.

Plus it also sets the stage for a complete government takeover of health care. Although the inevitable failures would be caused by massive government interference in the marketplace, pundits will claim that this is somehow failure of the marketplace and that the government needs to "rescue" the people with a "single payer" system.

For more on problems with Massachusetts, see our archive of posts on the subject.

Daily on Insurers

Stella Daily of ReasonPharm points out that the recent news articles on the insurance industry's latest capitulation to government controls should read:

"Insurers offer to start charging healthy people more",

rather than:

"Insurers offer to stop charging sick people more".

As she notes:

...Two insurance giants, America's Health Insurance Plans and the Blue Cross and Blue Shield Association, have written to senators indicating that they are willing to phase out premiums that vary by prior health history if Congress requires all Americans to purchase coverage.

That is bad, bad news for healthy people like me.

It's key that the insurance companies are making this offer in exchange for forcing everyone to be covered -- because that's the only way this scam will work. If insurers don't charge more for higher-risk people, then they simply have to raise costs for everyone. But that would mean health insurance would be an even worse deal for healthy individuals than it already is -- and healthy Americans would flee.

As she pithily concludes:

Let's not shackle the healthy to pay for the sick.

For more on the problems with mandatory insurance, please see my earlier article from the Fall 2008 issue of The Objective Standard:

"Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America"

Insurers Extend Their Faustian Bargain

Health insurance companies have offered to speed up their eventual suicide, agreeing to yet more concessions to the government in exchange for a law requiring all Americans to purchase health insurance.

This is just an extension of the Faustian bargain described in my earlier piece, "Health Insurance Industry Sells Its Soul to the Devil".

Here's the latest development:

Insurers offer to stop charging sick people more

The health insurance industry offered Tuesday for the first time to curb its controversial practice of charging higher premiums to people with a history of medical problems.

The offer from America's Health Insurance Plans and the Blue Cross and Blue Shield Association is a potentially significant shift in the debate over reforming the nation's health care system to rein in costs and cover an estimated 48 million uninsured people. It was contained in a letter to key senators.

In the letter, the two insurance industry groups said their members are willing to "phase out the practice of varying premiums based on health status in the individual market" if all Americans are required to get coverage.

...Insurers are trying to head off the creation of a government insurance plan that would compete with them, something that liberals and many Democrats are pressing for.

Of course, making more concessions to the statists will only embolden -- not discourage -- them. Once insurers concede the premise that the government is right to set the terms for "universal coverage", then a taxpayer-subsidized government plan will be the inevitable next step. After all, if people have a "right" to insurance but the government deems private offerings to be "unaffordable", then the government will have to step in to allegedly rectify the situation with its own plan.

The unfair competition between a private insurance and subsidized government insurance will not be sustainable for long.

This move by private insurers will likely speed up their own demise. One does not fight a killer by offering to slit one's throat first.

And unless Americans speak out against this development, it won't end well.

CNN: 8 in 10 Americans Happy With Their Health Care

Philip Klein discusses a recent CNN poll in which 8 of 10 Americans say that they are satisfied with their health care.

He also notes that the CNN headline accentuates the negative, i.e., concerns over costs.

The media's drumbeat about our health care "crisis" is making most Americans think that everybody else is having a rough time with health care (even if them themselves are doing relatively ok), and hence we need drastic change in the form of government-managed "universal health care".

Hence, it's important for the media to include a fair discussion of the positives about our current system -- just as Dr. Scott Atlas did in his own recent piece.

And in particular, if Americans are satisifed with their health care quality but unhappy with the costs, then there's a perfect solution to lower costs while maintaining customer satisfaction -- free market health care reforms.

Hsieh OpEd at PJM: "Health Insurance Industry Sells Its Soul to the Devil"

The online political commentary/opinion website PajamasMedia.com has published my latest OpEd, entitled "Health Insurance Industry Sells Its Soul to the Devil".

Here's the introduction:

Health Insurance Industry Sells Its Soul to the Devil

Health insurance companies are on the verge of a Faustian bargain that will take the rest of us down with them.

March 22, 2009 - by Paul Hsieh

In German folklore, Johann Faust was a physician who sold his soul to the Devil in exchange for knowledge. Of course, the pact destroyed him. The American health insurance industry is on the verge of striking its own Faustian bargain with the U.S. government. But this bargain won't just destroy the insurance industry; it will also drag 300 million Americans into the pit of government-run "single payer" socialized medicine...

Read the rest here.

Did Natasha Richardson Die from Socialized Medicine?

David Henderson at EconLog asks this pointed question.

He also cites an article which notes:

The province of Quebec lacks a medical helicopter system, common in the United States and other parts of Canada, to airlift stricken patients to major trauma centers. Montreal's top head trauma doctor said Friday that may have played a role in Richardson's death.

"It's impossible for me to comment specifically about her case, but what I could say is ... driving to Mont Tremblant from the city (Montreal) is a 2 1/2-hour trip, and the closest trauma center is in the city. Our system isn't set up for traumas and doesn't match what's available in other Canadian cities, let alone in the States," said Tarek Razek, director of trauma services for the McGill University Health Centre, which represents six of Montreal's hospitals.

(Via Brian Schwartz.)

Goodman: The Rest Of The Story

John Goodman, Linda Gorman, Devon Herrick, Robert Sade ask some important questions in their recent paper, "Health Care Reform: Do Other Countries Have the Answers?":

1. Does the United States spend too much on health care?

2. Are U.S. outcomes no better and in some respects worse than those of other nations?

3. Is the large number of uninsured in the U.S. a crisis?

4. Does lack of health insurance cause premature death?

5. Are medical bills causing bankruptcy?

6. Are administrative costs higher for private insurance than public insurance?

7. Are low-income families more disadvantaged in the U.S. system?

8. Can the free market work in health care?

Their answers may surprise you.

Could it possibly be that the politicians in favor of "universal health care" have misled us about these issues?

(Via Health Affairs blog.)

Pipes on Rationing

Sally Pipes dissects the flaws behind ObamaCare in this OpEd in the March 2, 2009 New York Post. Here's an excerpt:

Bams' Bad Medicine

...Just look at the failure of existing government health programs -- both here and abroad. Many Medicaid patients have a difficult time finding a doctor. According to a 2003 study by the Medicare Payment Advisory Commission, doctors are five times more likely to turn away Medicaid patients than those with private insurance.

The situation is even worse in countries like Canada and Great Britain -- whose government-run systems Obama's health braintrust has cited approvingly.

More than 725,000 Canadians languish on months-long waiting lists for surgery and other necessary treatments. Doctors are in short supply - thanks largely to the government takeover of the health sector. In the early 1970s, when Canada launched its "universal coverage" system, the country ranked second among 28 developed countries in doctors per thousand people. Today, it's 24th.

Further, Canadians often lack access to the advanced medical technology that Americans take for granted. Canada ranks 19th among 26 reporting OECD nations in access to CT scanners and 14th out of 25 reporting OECD countries in access to MRI machines.

In the UK, the government-run health system explicitly rations medical treatments through the publicly chartered National Institute for Health and Clinical Excellence. NICE evaluates data from clinical drug trials to decide if newer medical treatments are more effective than older, cheaper alternatives. It then makes recommendations to Britain's state-run National Health Service about which treatments are worth paying for.

Last summer, British patients with kidney cancer were denied access to four lifesaving drugs. NICE's clinical and public health director said of the drugs at the time, "Although these treatments are clinically effective, regrettably the cost to the NHS is such that they are not a cost-effective use of NHS resources."

In other words, the British government admitted that patients would likely die without these treatments -- but refused to pay for them anyway.

This could happen here. Obama's stimulus package includes $1.1 billion for NICE-style comparative-effectiveness studies.

As the costs for his health reforms mount, Obama will be forced to employ the same strategies that Canada and Britain have to cut spending. That means the rationing of care (and significantly higher taxes).

Read the whole thing.

Rhoads: Less Government, Not More

Jared Rhoads, director of the Lucidicus Project, has written another excellent OpEd on the problems with Massachusetts' health care. Some critics of the Massachusetts system are using that failure to call for yet more government control of health care. Rhoads notes that the exact opposite is true.

Here is his piece in its entirety, reposted with his permission:

Less government, not more
By Jared M. Rhoads

Recently, a national organization of physicians released a report strongly criticizing the health reform effort in Massachusetts that imposes a mandate on residents to purchase health insurance.[1] Citing several studies and data sources, the group showed that the reform has added wasteful new layers of bureaucracy and has failed to control costs. The Massachusetts program, they said, is faltering badly and thus should not be held up as a national model for reform.

Not exactly a ringing endorsement of government intervention in health insurance, right?

Think again. The report was published by Physicians for a National Health Plan (PNHP), a group that exists specifically to advocate for a universal, comprehensive single-payer government system of healthcare in the United States. Since 1987, PNHP has sought a government-financed system that would eliminate private insurers altogether. The group is increasingly visible in the health policy world; with more than 15,000 members nationwide, it has rallied on the steps of the capitol, published papers in journals, and has lobbied Congress.

For PNHP, the reason that the Massachusetts reforms do not work is not because the reforms interfere with the health insurance market, but because they do not interfere enough. The state reform has failed, they argue, because it leaves too much of the private system in tact. Until residents are stripped of the ability to purchase coverage from private insurers, state agencies like Commonwealth Care cannot generate sufficient "administrative savings" -- the magical ingredient in the group's Medicare-for-all vision that will allegedly lower the cost of healthcare and make additional entitlements possible.

In effect, PNHP denounces the Massachusetts reform in order to throw its support behind a much bigger goal: the United States National Health Care Act (H.R. 676). This act, which has already been introduced and referred to committee for review, would provide universal coverage under a single payer (the government) and promise all individuals the "best quality standard of care" for everything ranging from primary care and prevention to prescription drugs, mental health services, dental services, chiropractic services, podiatric care, and more. According to the bill, this would all be made available for "free" -- no co-payments, deductibles, or coinsurance required.[2]

In short, the approach that PNHP, the California Nurses Association, Healthcare for All, the American Medical Students Association, and dozens of other groups employ is: if one big dose of government doesn't work, try a bigger dose.

Combined with the recent statements by President Obama that healthcare reform "cannot wait ... and will not wait another year," it is becoming clear just how dangerous a time it is for those who value individual rights. Government payment for medical services -- regardless of whether state or federal -- is neither a moral nor practical solution to the problems we face in healthcare. But is anyone in the mainstream media arguing that point? Activists have no right to require the young to sacrifice the old, the healthy to sick, or the productive to the poor. But is anyone in Congress about to defend those convictions?

Contrary to what big-government activists maintain, market forces do work in healthcare. Insurance works -- when policies are based on coverage that consumers actually want and when premiums are tied to actual risk profiles. New technologies lead to lower costs -- when reimbursement rates reflect real prices. And uninsured individuals are not a menace to others -- when providers are not forced to provide charity care and when states do not pick up the tab. Real markets feature competitors who are free to compete and consumers who are free to be discriminating in what they buy.[3]

Massachusetts has not had anything resembling a free market in healthcare for decades. But the answer is not to drift even closer to disaster and institute a bigger mess at the federal level. The answer is to unshackle consumers, providers, and insurers and free the markets once and for all.

_____

1 "Massachusetts’ Plan: A Failed Model for Health Care Reform" Physicians for a National Health Plan, February 18 2009

2 The United States National Health Care Act, H.R. 676 [http://www.pnhp.org/docs/nhi_bill_final1.pdf] Accessed February 27 2009

3 This is a careful improvement on a point made in Herzlinger, R. "Creating a Real Healthcare Market", Boston Globe, February 18 2009, a piece that unfortunately cedes ground to the antitrust camp.

Thank you, Jared!

More Problems In Massachusetts

The March 16, 2009 New York Times article "Massachusetts Faces Costs of Big Health Care Plan" discusses the new controls that Massachusetts state government will impose on doctors, hospitals, and insurers in order to salvage their failing "universal health care system".

Costs are continuing to skyrocket out of control despite a round of new taxes. Hence, the article notes:

The very stakeholders who were coaxed into the tent -- doctors, hospitals, insurers and consumer groups -- would probably have been driven into opposition by efforts to reduce their revenues and constrain their medical practices, they said.

"Constraining" how doctors practice basically means the government overriding a doctor's judgment as to how to treat his patients. It interposes the bureaucrat into the doctor-patient relationship in order to save costs.

The end of this road will be government rationing, just as in the UK where the government explicitly says that it won't pay for treatments if it costs too much.

Advocates of universal health care often criticize free market medicine on the grounds that we "can't put a price on human life". But it is the government-controlled medical systems that actually do put a price on life. In such systems, patients can only hope that their government doesn't consider their own lives too expensive to save.

The answer to skyrocketing costs is not a government takeover of health care, but rather the free market. As we've seen with cellphones and computers, the free market drives down costs and improves quality.

Similarly, the sectors of medicine such as LASIK eye surgery which are the most free (i.e., least controlled by the government) show the same pattern of falling costs and rising quality over time. This can and should be the norm in all of medicine.

(For more on the problems with Massachusetts' system of universal health care, see the DC Examiner piece "Universal coverage? First, look at the disaster in Massachusetts" and my Objective Standard piece, "Mandatory Health Insurance: Wrong for Massachusetts, Wrong for America".)

Pisaturo on ObamaCare

In the March 11, 2009 edition of Capitalism Magazine, Ron Pisaturo argues that "Obama's Socialist 'Reforms' for American Healthcare are Impractical and Immoral".

Here's an excerpt:

...But the impracticality of socialized medicine goes far deeper than inefficiency. Socialized medicine -- which already dominates American medicine through Medicare, Medicaid, and persecution of the drug and insurance industries -- is impractical because it rests on the immoral premise that healthcare is a right, that healthcare must be provided equally for all.

Consider the contrasting case of the computer industry, which is much freer than the healthcare industry. When the newest, most souped-up, most software-laden computer with the most comprehensive service contract first comes out, it might cost $20,000 or more. Only wealthy Americans choose to buy, or can afford to buy, such an expensive model. Most Americans settle for a model and service contract that costs maybe $1,000 or less. But a couple of years later, after manufacturers have improved their manufacturing ability and brought their costs down, they can sell the old souped-up model for $1,000; and then the average man can enjoy what only the wealthiest could afford a couple of years earlier. Meanwhile, the wealthy can now buy an even more amazing new computer for $20,000.

This has been the pattern of all technological progress in all industries throughout the Industrial Revolution. A poor immigrant today making less than minimum wage off the books can afford to pay for a life-saving antibiotic that the richest of the rich could not obtain a few generations ago.

But suppose the government declares that owning a computer is a right, and so every American has the right to a quality computer, the best computer available. Then progress becomes an enemy of the state. Every new, $20,000 computer has to be provided to everyone. And so, instead of the average computer cost per person being around $1,000, the average cost is $20,000.

The government's only recourse is to outlaw progress.

Moreover, some people who had no computer before are now entitled to one. And they need more service, because they keep spilling booze on it. And those who had two computers must do with only one, with less service. And soon the computer models become more stripped down, because that's the only way to pay for an equal computer for all.

And so it has been going in America's socialized healthcare industry for the past two generations...

Read the whole thing.

As usual, the combination of moral and economic arguments is more powerful than either alone.

IBD on the Health Care Trojan Horse

The March 10, 2009 Investors' Business Daily warns against the "Trojan Horse" of Obama's health care reform plan. Here's an excerpt:

...Obama's plan is a blueprint for socialization in stages. It starts with a basically good idea -- setting up a truly national market (which we don't have now) for private insurance -- and stacks the odds against the insurers by putting a tax-subsidized plan in the mix.

The private plans would have to be at least as generous as the public plan; this was stated explicitly by the Obama campaign. However, they would be denied its subsidy, so it would be impossible for them to match its benefits and still make money.

It would be like herding sheep into the fold and letting the wolf in. Or you can think of the public plan as a Trojan horse. Once allowed inside the gates of the health insurance market and given an unfair advantage, it will eventually out-compete its private rivals and gain monopoly power.

Plus if history is any guide, the collapse of the private insurers due to unfair competition from the government will be labelled a "failure of capitalism", and used to justify a complete government takeover of health insurance.

We've already seen this specious reasoning applied to the mortgage crisis, as George Mason University professor Peter Boettke noted:

If you bound the arms and legs of gold-medal swimmer Michael Phelps, weighed him down with chains, threw him in a pool and he sank, you wouldn't call it a "failure of swimming". So, when markets have been weighted down by inept and excessive regulation, why call this a "failure of capitalism"?

Fortunately, publications like IBD are calling attention to this problem before it happens. Let's hope enough Americans are listening.

(Update: Fixed bad link to IBD piece.)

Doctors Vs. Begley

The March 9, 2009 Newsweek published an inflammatory piece by Sharon Begley entitled, "Why Doctors Hate Science".

Her basic premise is that doctors refuse to follow science, which is why we need "comparative effectiveness" research to help guide them into appropriate practice patterns.

Others have warned that this is just a smokescreen for government control of medicine (and subsequent rationing). Of course doctors don't hate science -- that's the basis of our profession. But we do hate bureaucrats telling us how to practice. As I wrote in my DC Examiner piece:

The Obama administration would control costs by creating a new Federal Coordinating Council for Comparative Effectiveness Research to determine which treatments are deemed most effective and thus eligible to be paid for by government. These decisions would be based on statistical averages that cannot take into account specific facts of individual patients.

Yet good physicians must consider precisely these specifics when treating their patients. If you are suffering from abdominal pain due to gallstones, who should decide whether medication or surgery would be more effective for you?

The doctor who has felt your abdomen, listened to your heartbeat, and knows your drug allergies? Or the bureaucrat who got his job by telling the right joke to the right person at the right Washington cocktail party?

And now physician-blogger "Orac" has chimed in with his own debunking of Begley's article entitled, "'Why doctors hate science'? More like: Why does Sharon Begley hate doctors?"

I don't necessarily agree with all of Orac's points, but he is correct to note that comparative effectiveness research is going to be used to control costs.

My contention is that it's also going to be used to control physicians. If the government says, "A is cheaper than B, therefore we'll only pay for A", what's going to happen when the doctor believes that B is better for his patient?

Kesler: Top Ten Specious Premises for ObamaCare

Bruce Kesler lists the Top Ten Specious Premises for ObamaCare. Each of these is described in greater detail in the full post:

1. Comparing US Health Care To Other Developed Countries
2. US Health Care Spending Is More Than We Can Afford
3. Reform Overhaul Will Yield Major Savings
4. Increased Evidence-Based Medicine And Health Information Technology Will Significantly Improve Care and Reduce Costs
5. Present Administrative Costs And Insurer Profits Are Too High
6. US Consumer Dissatisfaction Requires Drastic Health Care Changes
7. Health Care Costs Are So High They Are A Major Cause Of Personal Bankruptcy
8. The Number Of Uninsured Is So Large That Drastic Health Care Changes Are Necessary
9. More Preventive Care Will Better Serve Consumers And Save Costs
10. Health Care Consumers Are Being Served By Drastic Health Care Changes

Read the whole thing.

This is another good economic analysis of the issues that will be front-page issues soon.

(Via Debby.)

Schwartz OpEd: "Beware single-payer health care"

The March 8, 2009 Colorado Daily has published Brian Schwartz's latest OpEd, "Beware single-payer health care". Here's the introduction:

Independent Ideas: Beware single-payer health care
Colorado should adopt free-market reform instead

By Brian T. Schwartz, Sunday, March 8, 2009

Politicians cannot guarantee health care, but by trying they can create an unaccountable and toxic insurance monopoly.

Beware of Colorado House Bill 1273, which will be heard by the House Business Affairs and Labor Committee on March 18.

The Rocky Mountain News described the Colorado Guaranteed Health Care Act as a "Canadian-style, single-payer" bill. A recent survey finds that nearly one in four state House members advocate single-payer health care...

Update: It also appeared in the 3/9/2009 Denver Daily News.

Ronald Reagan on Universal Health Care

This classic video has been making the rounds lately:



Via 911Doc.

(Note: Again, FIRM is non-partisan. Plus I don't necessarily endorse Reagan's policies on some important issues, but this video is pretty much on the mark.)

Knope Issues A Call To Arms

Dr. Steve Knope has just issued a call to arms to physicians to stand up against bureaucrats who would control how they practice.

(Note: Knope refers to himself as a "Libertarian". FIRM is non-partisan and does not endorse the Libertarian Party or any other party. Speaking purely for myself, I'm not a Libertarian either, but I am a supporter of individual rights, free markets, and limited government.)

Get Ready For the Unintended Consequences

President Obama plans to pay (in part) for his "universal health care" plan by raising taxes on "the wealthy", defined as those making over $250,000 per year.

However, this will also create massive unintended consequences in the health care sector as well as in the economy at large.

Here's how one physician will respond if Obama's plan becomes law:

My wife and I are both pediatricians. We own our own practice together. We have one PA and 7 other employees. We each gross about $200 K a year. We have 3 young children at home, 2 of whom are not in school. We also employ an in-home nanny. My wife has been torn for years about not being at home for these children, which are our biggest investment in the future. We operate parallel S corporations as PC's, with a 50/50 ownership of the LLC that is our business. We file taxes jointly. After crunching some numbers concerning the President's tax hike proposals, I have come to the following conclusions. If the President's plan is enacted, we will do the following:

1. My wife will become a stay at home mother.

2. At least 3 of my 7 employees will be released.

3. The practice will downsize to a smaller office space, i.e. less rent.

4. The number of patients cared for on a daily basis will drop by 40%.

5. My wife will come out of the forced ER call schedule for good.

6. I will gross $249,999.00 a year, exactly.

7. The net income of our personal home will decrease by less than $10 K a year from where it would have been if we changed nothing.

And another physician points out:

Seeing that almost half of doctors are women, and most are married and many have children, it should be obvious that many will reduce their hours worked. And with all the problems that Obama Care will create, there WILL be a shortage of doctor hours to care for patients. So EVERYONE will EQUALLY WAIT IN LONG LINES FOR CARE.

In Massachusetts' universal system, some patients are waiting up to a year for a routine physical exam.

Is this a taste of the future for the rest of the United States?

(Both quoted segments via Bill Spears.)

Cochrane on Health-Status Insurance

University of Chicago finance professor John H. Cochrane has published a terrific paper on how the free market can handle one of the problems that worries patients most about health insurance -- namely, "What happens if I get sick and become uninsurable?"

His paper, "Health-Status Insurance: How Markets Can Provide Health Security", discusses how this problem can be addressed through the free market, without government regulations. From the executive summary:

Free markets can solve this problem, and provide life-long, portable health security, while enhancing consumer choice and competition. "Heath-status insurance" is the key. If you are diagnosed with a long-term, expensive condition, a health-status insurance policy will give you the resources to pay higher medical insurance premiums. Health-status insurance covers the risk of premium reclassification, just as medical insurance covers the risk of medical expenses.

With health-status insurance, you can always obtain medical insurance, no matter how sick you get, with no change in out-of-pocket costs. With health-status insurance, medical insurers would be allowed to charge sick people more than healthy people, and to compete intensely for all customers. People would have complete freedom to change jobs, move, or change medical insurers. Rigorous competition would allow us to obtain better medical care at lower cost.

Basically, it's insurance on future insurability, similar to this option being offered by United Health Care.

Cochrane's paper also discusses why various proposed government "solutions" (such as laws requiring insurers to accept all applicants and charge them the same price for coverage) merely make things worse.

When there is both a demand for a service (protection against future uninsurability) and someone willing to supply that service, the marketplace will allow both parties to work out a mutually satisfactory arrangement.

(Via PatientPower.)

PJM OpEd: "Ayn Rand and the Tea Party Protests"

The online commentary/opinion website PajamasMedia.com has just published my latest OpEd entitled, "Ayn Rand and the Tea Party Protests".

Although the piece only briefly mentions "universal health care", it discusses basic principles that are definitely applicable to the health care debate:

My overall theme is that the Tea Party protesters must couple their outrage at the government bailouts with a positive vision of a properly limited government based on Ayn Rand's ideas.

Here is an excerpt:

Ayn Rand and the Tea Party Protests
March 2, 2009 - by Paul Hsieh

Over the past week, an extraordinary wave of "Tea Party" protests has erupted across America. Citizens around the country have expressed outrage at the government's mishandling of the financial crisis. And one of the most intriguing developments has been a resurgence in interest in Ayn Rand's classic novel Atlas Shrugged.

Denver's Tea Party protest opened with a reading from Atlas Shrugged. A sign at the New York City protest read, "Ayn Rand Was Right." One banner at the Atlanta Tea Party said, "Read Atlas Shrugged Before It Happens." The Ayn Rand Institute reports that sales of Atlas Shrugged have nearly tripled compared to last year due to Americans' concerns about the economic crisis.

So why has there been such a renewed interest in Ayn Rand?...

Read the rest here.

Basu: "Who Should Pay for Autism Treatment?"

The March 1, 2009 Undercurrent has an excellent discussion of Virginia's proposed autism coverage mandate by Rituparna Basu. Here's an excerpt:

Who Should Pay for Autism Treatment?

Medical treatment for autism is exceedingly expensive. Many parents of autistic children take out a second mortgage on their homes and some even file for bankruptcy because they are unable to pay the costs of autism treatment that insurance does not cover. Many believe that this situation is not fair and that the government should step in to alleviate the hardships these parents endure.

In Virginia, proponents of House Bill 83 are trying to pass a law, similar to one already passed in eight other states, that would require insurance companies to cover the medical costs of treating children with autism.

...Insurance companies' costs will obviously increase if they are forced to pay for the treatment of autistic children. To offset this additional cost, insurance companies will do one of two things: they will either offer fewer medical services to maintain the current premiums or increase the premiums for everyone. In the former case, vital medical services will no longer be covered, and patients who rely on these services will have to pay more for them. In the latter case, all insured individuals will be charged a higher premium, which means that some people who have health insurance will no longer be able to afford it and fewer employers will be able to offer health insurance to their employees.

...People work hard to earn money in order to attain those goods and services that make their lives enjoyable and worth living. Consider what this bill means to those who do not have autistic children: instead of spending their money on that which they value, now they will be forced to spend that money on other people's autistic kids. Many families who already find health insurance difficult to afford will now be forced to decide whether they want to spend more for their health insurance or instead use this money for other important expenses, such as investing it towards a college education for their children or paying their rent or mortgage. If it is unfair for parents of autistic children to have to pay their children's medical bills, how much more unfair is it for other parents to have to pay the same bills? Demanding that people hand over their hard-earned money without regard for the consequences such an action will inflict on their lives is unjust.

Read the whole thing here.

I especially like the fact that Ms. Basu integrates the economic and moral arguments against insurance mandates. IMHO, we badly need more such health policy analysis along these lines.