Armstrongs Critique Left And Right

In the August 3, 2009 Grand Junction Free Press, the tireless father-and-son team of Linn and Ari Armstrong critique both the left and the right in the health care debate.

Here's an excerpt of their piece, "In health debate, left and right need to check premises":

...The left suffers worse ideological problems. Mike Littwin, also of the [Denver] Post, argued last week that equality-driven, politically-run health care is a moral issue.

We quite agree it is a moral issue. It is immoral to seize people's resources by force. It is immoral to forcibly override the independent judgment of doctors, patients, insurers, and consumers and to nullify their agreements. We oppose politically-run medicine because it violates morality. Moral health care respects people's rights of liberty, property, and voluntary association.

Unfortunately, the right also veers off track...

One of the speakers at the Denver rally, Preston Gibson of the Jefferson Economic Council, eloquently argued that the "public option" would drive out private insurance.

Unfortunately, Gibson also claimed that "employer-sponsored health insurance has been the foundation of the highest quality health care on earth." Wrong. Employer-paid insurance is the product of federal tax manipulation. It is non-portable. It is expensive because it encourages people to use insurance for routine care rather than unexpected, high-cost emergencies.

American medicine is great despite the IRS-promoted employer-paid system. We should move away from employer-paid insurance to individual policies. We support the expansion of Health Savings Accounts to allow the purchase of insurance with pre-tax dollars.

Jeff Crank, organizer of the Denver rally, likewise made many admirable points. However, he also claimed that the "right kind of health care reform" includes "eliminating the pre-existing conditions exclusion." We take this to mean imposing more political controls on insurance companies.

When insurers are forced to take people with pre-existing conditions, many people wait to buy insurance until they get sick, undermining the very purpose of insurance (and leading to Romney-style mandates). The real answer is to remove all the political controls of insurance that have mostly destroyed the market for long-term policies.

Too often neither the left nor the right gets it. The name of our favorite health policy group summarizes the essential values we must protect: Freedom and Individual Rights in Medicine..

(Full text of: "In health debate, left and right need to check premises")

Too many people in both major political parties have been too willing to violate individual rights in the name of "reform". Until politicians (and more importantly, voters) adopt a firm and principled approach to rights, this problem will continue to recur.

Fortunately, there are excellent resources available from think tanks such as the Ayn Rand Center for Individual Rights that provide the much-needed proper philosophical guidance, including the classic essays:

"Man's Rights" and
"The Nature of Government"

I can think of no better foundation for genuine health care reform.

Why A Public Plan Will Not Work (In 62 Words)

Amy Ridenour explains, "Why a Public Health Care System Does Not Work (in Only 62 Words)":

To meet budget targets, governments reduce payments to providers and to buy equipment. This reduces the supply of people willing to provide health care services (doctors, nurses, medical staff and support) and the supply of equipment (hospital beds, diagnostic tools, etc.). Shortages develop, and those who are sick or injured, suffer.

They find themselves with health care coverage, but without health care.

This point bears repeating: Coverage does not equal care.

Lewis: "What 'Right' To Health Care?"

Duke University professor John Lewis has written an OpEd in the August 2, 2009 in the Raleigh-Durham News & Observer entitled, "What 'Right' To Health Care?"

Here's an excerpt from his piece:

As the issue of health care reform builds to a legislative climax, it is important that we not merely parrot the same kinds of proposals we have seen for the past 50 years. A Point of View writer on this page recently lamented that "after a half-century of attempted reform" we have not reached the promised land of equality in health care. Let me rephrase this: After 50 years of increasing government interventions, through a maze of agencies that now control half of all medical dollars in America, the financial mess is getting worse.

... But such economic arguments have not stopped the train to further government intervention, and we should ask why.

The answer is that the advocates of government medicine are upholding health care as a moral right. Desiring to mandate this "right" by legislative fiat, they have been unwilling to face the cause and effect relationship between increasing government actions and rising prices. That is because the moral goal of equality, measured against the claims to a right to health care, has trumped the mere economic arguments.

As a result, calls for more and wider programs -- to enforce the "right" -- have continued, even as prices rise. This has led to even greater price distortions, which have fueled calls for more interventions, leading to higher prices and demands for more programs.

This vicious cycle is blinding people to the fact that the fundamental cause of the problem is the government interventions, which have caused the distortions.

Again, even a cursory look at the evidence shows the cost problem beginning in the late 1960s, when the government began its massive increase in programs designed to make us all equal by legislative decree. And if one thinks that England today is a model for what a country should do, one may not know the reality of six-bed wards in National Health Service hospitals, of patients waiting over a year for heart operations or of refrigerated trucks in hospital parking lots to store bodies from the flu season (all of which I saw when living there).

Just ask yourself what your car insurance would cost if everyone demanded it as a government-guaranteed "right." Imagine car repair shops having to go through a 10-year approval process -- as pharmaceutical companies must -- before offering a service that the government will then provide to millions of people as a "right." Then ask what the response would be if some people broke with the consensus and said that car repairs were a service to be paid for. They would be shouted down as immoral -- while people demanded that their insurance pay for oil changes and ripped seats.

Congress would pass more programs. Prices would quadruple, and car insurance would become a crushing expense.

Those who want to see an end to spiraling medical costs should challenge the premises behind the government interventions...

(Full text of "What 'Right' To Health Care?")

Thank you, Dr. Lewis, for addressing the core of the issue!

ABC News Warning About ObamaCare

ABC News reporter John Stossel warns about the dangers of universal health care in this recent 20/20 segment:

Brook: Why Are We Moving Toward Socialized Medicine?

Yaron Brook asks the question that all Americans should be asking, "Why Are We Moving Toward Socialized Medicine?"

Here's his OpEd in full:

Why Are We Moving Toward Socialized Medicine?

By Yaron Brook

Government intervention in medicine is wrecking American health care. Nearly half of all spending on health care in America is already government spending. Yet President Obama's "reforms" will only expand that intervention.

Prior to the government's entrance into medicine, health care was regarded as a product to be traded voluntarily on a free market--no different from food, clothing, or any other important good or service. Medical providers competed to provide the best quality services at the lowest possible prices. Virtually all Americans could afford basic health care, while those few who could not were able to rely on abundant private charity.

Had this freedom been allowed to endure, Americans' rising productivity would have afforded them better and better health care, just as, today, we buy better and more varied food and clothing than people did a century ago. There would be no crisis of affordability, as there isn't for food or clothing.

But by the time Medicare and Medicaid were enacted in 1965, this view of health care as an economic product--for which each individual must assume responsibility--had given way to a view of health care as a "right," an unearned "entitlement," to be provided at others' expense.

This entitlement mentality fueled the rise of our current third-party-payer system, a blend of government programs, such as Medicare and Medicaid, together with government-controlled employer-based health insurance (itself spawned by perverse tax incentives during the wage and price controls of World War II).

The resulting system aimed to relieve the individual of the "burden" of paying for his own health care by coercively imposing its costs on his neighbors. Today, for every dollar's worth of hospital care a patient consumes, that patient pays only about 3 cents out of pocket; the rest is paid by third-party coverage. And for the health care system as a whole, patients pay only about 14 percent.

Shifting the responsibility for health care costs away from the individuals who accrue them led to an explosion in spending. In a system in which someone else is footing the bill, consumers, encouraged to regard health care as a "right," demand medical services without having to consider their real price. When, through the 1970s and 1980s, this artificially inflated consumer demand sent expenditures soaring out of control, the government cracked down by enacting further coercive measures: price controls on medical services, cuts to medical benefits, and a crushing burden of regulations on every aspect of the health care system.

As each new intervention further distorted the health care market, driving up costs and lowering quality, belligerent voices demanded still further interventions to preserve the "right" to health care: from regulations mandating various forms of insurance coverage to Bush’s massive prescription drug bill.

The solution to this ongoing crisis is to recognize that the very idea of a "right" to health care is a perversion. There can be no such thing as a "right" to products or services created by the effort of others, and this most definitely includes medical products and services. Rights, as the Founders conceived them, are not claims to economic goods, but to freedoms of action.

You are free to see a doctor and pay him for his services--no one may forcibly prevent you from doing so. But you do not have a "right" to force the doctor to treat you without charge or to force others to pay for your treatment. The rights of some cannot require the coercion and sacrifice of others.

Real and lasting solutions to our health care problems require a rejection of the entitlement mentality in favor of a proper conception of rights. This would provide the moral basis for breaking the regulatory chains stifling the medical industry; for lifting the tax and regulatory incentives fueling our dysfunctional, employer-based insurance system; for inaugurating a gradual phase-out of all government health care programs, especially Medicare and Medicaid; and for restoring a true free market in medical care.

Such sweeping reforms would unleash the power of capitalism in the medical industry. They would provide the freedom for entrepreneurs motivated by profit to compete with each other to offer the best quality medical services at the lowest prices, driving innovation and bringing affordable medical care, once again, into the reach of all Americans.

Yaron Brook is the executive director of the Ayn Rand Center for Individual Rights in Washington, D.C. ARC is a division of the Ayn Rand Institute and promotes Objectivism, the philosophy of Ayn Rand--author of Atlas Shrugged and The Fountainhead.

If you agree with him, then you should tell your elected officials.

Socialized Medicine Through The Eyes Of A Recipient

Another informative video from PJTV: Socialized Medicine Through The Eyes Of A Recipient.

Ralston: Obamacare's Attack on Doctors

The July 17, 2009 Orange County Register published the following OpEd by Richard Ralston (executive director of Americans for Free Choice in Medicine) entitled, "Obamacare's Attack on Doctors".

Ralston makes two important points:

...The first and most obvious is that reform advocates in government want the legal power to prevent doctors from deciding "what medical or surgical treatments are needed." They think that role must be reserved for politicians and government officials. Physicians must not be allowed to prescribe a drug if the government decides it helps only some but not all patients and is thus not "comparatively effective."

Second, Ralston also highlights:

...[T]he attempt to disarm doctors morally and politically so they will do what they are told. Any attempt to protect their ability to practice medicine as they think best will just prove that they are greedy profiteers, like businessmen. Anyone who makes a living or runs a profitable business that does not need to be bailed out by the government may be condemned.

Conversely, greed for power is a saintly virtue for those who want to instruct physicians how to run their practices.

From other quarters we hear arguments that doctors should just do what they are told and accept what the government pays them, even if it does not cover their costs, because they owe us all for their medical education. Never mind the huge debts with which most MD's graduate from medical school. Never mind the long years and long hours of medical education and internship. If they went to a public school, never mind the taxes their parents paid to support it. If the government gives you an education, these politicians say that you owe that government your life. Are we now discovering the true purpose of government-controlled education?

(Read the rest of "Obamacare's Attack on Doctors".)

If physicians lose their freedom to practice according to their own best judgment for the benefit of their patients, both patients and physicians will lose.

(For another good piece on the double-speak being thrown about by supporters of Obamacare, see Ralston's July 5, 2009 OpEd, "Paging Dr. Orwell".)

Health Benefits of HR-3200

There are some unintended health benefits to House Bill HR-3200, as Jimmy Fallon explains:

Jimmy, with the help of supermodel Carol Alt, wants to tell you about this exciting new total health system:

The HR-3200! It's a total health concept perfect for burning fat and building muscle! America's Affordable Health Choices Act, running at over 1,000 pages and weighing in at 13 pounds, means RESULTS for your body! For only 52 easy payments of $19,231,769,235, you can't miss out on this once-in-a-lifetime offer!

Five Freedoms At Risk

Shawn Tully of Fortune discusses the, "5 Freedoms You'd Lose in Health Care Reform".

His list includes the following:

1. Freedom to choose what's in your plan
2. Freedom to be rewarded for healthy living, or pay your real costs
3. Freedom to choose high-deductible coverage
4. Freedom to keep your existing plan
5. Freedom to choose your doctors

(Read the rest of "5 Freedoms You'd Lose in Health Care Reform".)

Instead of losing our freedoms under a sham "reform", Tully offers the following principles for genuine health care reform:

The best solution is to move to a let-freedom-ring regime of high deductibles, no community rating, no standard benefits, and cross-state shopping for bargains (another market-based reform that's strictly taboo in the bills).

These would all be excellent steps in the right direction towards a free market in health care.

Schwartz on Non-Reform

The July 25, 2009 Boulder Daily Camera carried Brian Schwartz's piece on why the current proposed health care "reform" is anything but reform:

Paying for Health Care Reform

The Democrats' proposals would "reform" nothing. Instead, they would entrench problems with the status quo, as economist Arnold Kling explains in "The Non-Debate over Non-Reform."

Consider the country's total health care spending. Patients' out-of-pocket spending accounts for only about 10 percent. Insurers and government split the remaining 90 percent almost evenly. Since physicians, like anyone else, cater to who pays them, patients are left in the lurch. But Democrats ignore this problem.

Instead, they have been in bed with drug companies, Wal-mart, and hospital groups with plans to stick it to taxpayers. For details, see "A Closer Look at Those Industry Deals" at healthcare.cato.org.

Who should finance so-called "reform?" Translation: who should pay for other people's medical care? Anyone who volunteers, and no one who does not. Health care is not a right. Rights are freedoms of action, not entitlements to what others produce.

If you want to pay for other people's medical care, donate to or volunteer with a charity. Don't ask politicians to compel others to fund government charities, like Medicare and Medicaid. Forcing others to donate to charity is neither virtuous nor compassionate.

Hence, if Democrats want a "public plan," they shouldn't force taxpayers to pay for it.

Citizens do not earn money to fund politicians' pet projects. Politicians should pitch their great ideas to investors or philanthropists. Using tax dollars is just robbery cloaked in conceit and elitism.

Brian T. Schwartz

(His piece is the fourth one down.)

Armstrongs on DeMint Handouts

The July 20, 2009 Grand Junction Free Press published the following OpEd on Linn and Ari Armstrong, "DeMint's health handouts violate liberty".

They analyze what's both good and bad about one of the leading Republican alternatives to the Democratic ObamaCare plan. One key point:

...So long as Republicans play the handout game, they will correctly be seen as "me-tooing" the Democrats, and they will continue to lose, step by step, inch by inch, to those who would subject the entire economy to political controls.

DeMint's handouts also distract attention away from the fundamental problem: health insurance is too expensive because of political controls. You solve that problem by repealing the controls, not by hiding them behind another welfare scheme.

The Republicans need to offer a clear principled alternative to the Democrats, and they need to support ideas that resonate with basic American values of individualism, responsibility, justice, and self-reliance. Otherwise they'll keep losing elections -- and deservedly so.

Hsieh OpEd: The Federal Health Care Muggers

On July 24, 2009, the PajamasMedia website published my latest health care OpEd entitled, "The Federal Health Care Muggers". Here's an excerpt:

The Federal Health Care Muggers

The Democrats' agenda of "universal health care" is in deep trouble, as more Americans (including many "Blue Dog" congressional Democrats) are growing increasingly uneasy about the costs.

...But in addition to this economic flaw, there's also a more fundamental danger to the congressional plan. This plan would violate individual rights on a massive scale by imposing new mandates on individuals, businesses, and insurers, forcing Americans to cede control over their health care to the government.

(Read the whole thing.)

Reynolds on Innovation

In the July 12, 2009 DC Examiner, Glenn Reynolds describes how nationalized health care will have a chilling effect on medical innovation. Here is an excerpt:

...But there's another cost that isn't getting enough attention. That's the degree to which a bureaucratized healthcare system will squash medical innovation just as we reach a point where dramatic progress is possible. To see how important that is, I don't have to look any farther than my own family.

...The normal critique of socialized medicine is to point out that people have to wait a long time for these kinds of treatments in places like Britain. And that's certainly a valid critique. I'm sure my mom and daughter would still be waiting for their treatments, while my father and wife would probably be dead.

The key point, though, is that these treatments didn't just come out out of the blue. They were developed by drug companies and device makers who thought they had a good market for things that would make people feel better.

But under a national healthcare plan, the "market" will consist of whatever the bureaucrats are willing to buy. That means treatment for politically stylish diseases will get some money, but otherwise the main concern will be cost-control. More treatments, to bureaucrats, mean more costs.

(Read the whole thing.)

This is a perfect example of the principle of the "seen vs. the unseen" as described by Bastiat. The effects of government regulations may save money (the seen), but at the cost of preventable suffering and deaths that we'll never hear about (the unseen).

Watkins Rebuts Singer on Rationing

Don Watkins of the Ayn Rand Center for Individual Rights has written a great rebuttal to the recent New York Times essay by Princeton philosopher Peter Singer arguing that we must ration health care.

Here's an excerpt from Watkins' piece:

...To impose rationing, Ayn Rand explained in a letter to a friend, means "to distribute [goods and services] in a certain particular manner–by the decision of an absolute authority, with the recipients having no choice about what they receive." Rationing means that the government decides how much of some good or service you are allotted.

This bears no relation to what happens under the price system of a free market. On a free market, goods and services are not rationed. They are produced by individuals and then voluntarily exchanged for the goods and services others have produced. A craftsman builds a chair, which he sells for money, which he uses to purchase a doctor's services. A doctor trades his services for money, which he then exchanges for a lawnmower.

The difference between prices and rationing is the difference between you choosing what groceries to buy and the government telling you what food you're allowed to eat.

Commentators like Singer treat those two as equivalent because, on their view, goods and services do not belong to the individuals who produce them, but to society. They hold, in effect, that brain surgeons and MRI machines are the property of society, which has the right to distribute "its" resources as "it" sees fit. But a doctor's services or a hospital's equipment are not social resources. They are created by individuals, and those individuals have a moral right to dispose of their time, effort, and property as they see fit. Rationing deprives them of this right.

(Read the whole thing.)

Watkins makes a critically important distinction between rationing and the operations of a free market -- one that even many conservatives who claim to support free markets often fail to make.

When such conservatives wrongly accept the premise that the market is just another form of rationing -- just "rationing by price" rather than by government decree -- they merely set the stage for leftists to claim that government decrees can be a more "fair" method of allocating goods.

By drawing the proper distinction between free markets and rationing, Watkins shows that it is only the free market can create a morally just distribution of goods and services. Only the free market protects the rights of the producers who create those goods in the first place to trade with willing consumers on terms they find mutually acceptable.

Albertoli: Immorality of Socialized Medicine

San Francisco artist Roxanne Albertoli has written the following short essay on the moral issues underlying the health care debate. Her original version was written in response to an essay by David Grundy, criticizing the British National Health Service.

I thought it deserved a wider circulation, so she has revised it to make it a stand-alone piece and graciously given me permission to reprint it here:

Immorality of Socialized Medicine

The moral issue of government controlled health care is not discussed, as it is assumed to be self-evident that socialized medicine is desirable (albeit impractical) - i.e., it is ethically good for people to see health care as a right.

This moral perversion of rights is based on the idea that we are all our brother's keeper, and vice versa. That we are all bound economically, one to the next, for medical care. Whatever someone other than ourselves wants medically, we are honor bound to hand over to that person; and that person is honor bound to reciprocate.

No one asks why. Why are we bound economically, one to the next, for medicine, or for any reason? How are we "free" if our income, that which enables us to live, is taken from us by the government to "pay" for someone else's health care, and the same thing happens to that someone else?

Why is it "better" for the government to take my money to pay for Josephine Smith's health care, and take Josephine Smith's money to pay for my health care but it is immoral for me to pay for my own, and for Josephine to pay for her own?

Why am I considered too stupid to judge what's right for me, to pick my own doctor and to contract with him or her for a fair price, but brilliant government clerks know the answers to these conundrums of life?

Why are doctors and hospitals and drug companies considered too venal, too immoral to charge fair prices, but the government is peopled with disinterested philosopher kings who know exactly the right balance between services and prices? And yet the same doctors who are too venal and mercenary to be allowed to set their own prices are still to be trusted to perform open heart surgery or diagnose a life-threatening illness.

Why is this giant shell game called moral?

Because people accept that it is "moral" to live for anther, "moral" to sacrifice for another, "moral" to sacrifice others to themselves - but that it is "immoral" to live for oneself, and "immoral" for each of us to take the responsibility of his or her own life and live for ourselves.

It is a huge responsibility to live for oneself by one's own labor, and solely by one's judgment of reality. But it is the only way to live as a human. To exist for, through and because of others is irrational and ultimately destructive, because our means of survival is our brain. And contrary to the geniuses on Madison Avenue, everyone does succeed alone, because everyone thinks alone. There's no one in there but you and only you can judge what is best for you, despite all the alleged "brains" in the government who claim they know what's best for you. It is your mind, your wealth (if you earned it) and your life - only you, the individual, know what's best for you and where and how you want your money spent that best benefits you. Taking responsibility for oneself and spending ones' own money on oneself is the most rational and therefore the most moral action to take as regards health care.

That is why socialized medicine is immoral. No one can think for another, therefore no one can decide what's best for another. Patients, doctors, medical industry people, everyone, must be free of government coercion in the marketplace of medicine. Our individual lives depend upon it.

Roxanne Albertoli
San Francisco, California

Thank you, Roxanne, for cutting to the heart of the issue.

Health Rations And You

This video shows us our future under government-run health care:



Remember, it's patriotic to sacrifice your health for others!

Schwartz on Systems

The July 18, 2009 Boulder Daily Camera carried Brian Schwartz's piece on reforming the current health care system. As he correctly notes, the central problem is the very existence of a "system":

Having a health care "system" is itself the problem. It implies that politicians dictate your medical choices, at your expense, regardless of whether their "system" serves your individual needs and preferences.

Consumers are frustrated with the low-quality politicized school systems and the regularly-jammed highway systems. We are quite pleased with our iPods and laptops. But there is no government-run consumer electronics "system;" instead, there's a relatively free market. A free market would do the same for medicine.

But politicians have imposed their will upon what should be individual medical decisions, resulting in an un-free market. The tax codes punishes you for not buying insurance through your employer, so you're stuck with your employer's few options. This coddles insurance companies, who are accountable to your employers instead of you. Politicians manipulate the tax code so we buy excessive insurance coverage, which discourages both price competition and prudent medical spending.

Politicians forbid us from buying more affordable insurance available to residents of other states. They force us to buy expensive policies loaded with mandated benefits many customers don't want. They force taxpayers to fund Medicaid and Medicare, which cause medical inflation, increase insurance premiums, and will bankrupt the country.

Politicians empower the FDA to enforce a default ban on all new drugs, which stifles innovation and deprives patients of life-saving medications.

Politicians should not dictate your medical and insurance decisions, you should. Only a free market empowers patients in this way, requires makes insurers and physicians to be accountable to them.

Brian T. Schwartz,

Thank you, Brian, for emphasizing an important point that is too often under-appreciated!

Brook on PJTV

The Friday July 18, 2009 edition of PJTV features a must-see interview with Yaron Brook on health care:



Click here to watch.

Crowder on Canada

Steven Crowder reports on the Canadian healthcare system.



Of course, it can't happen here.

Government Health Care Organizational Chart

Here is the organizational chart for the proposed new government universal health care plan:



(Click on the image to see it full-size. Here's a related story.)

Don't you feel better knowing that the same government that is doing such a good job running General Motors also wants to take over your health care?

Disclaimer: FIRM is a non-partisan group, and does not support either the Republican or Democratic parties.

Schwartz on the Public Plan

The July 4, 2009 Boulder Daily Camera published Brian Schwartz's piece for the Editorial Advisory Board, "The Public Plan Will Be the Only Plan":

"The 'public plan' will be the only plan" says health care economist Scott Harrington of the proposed government-run health plan.

Be suspicious: "public plan" supporters want it to be the only plan.

President Obama uses rhetoric of "choice" and "competition" to push the "public plan." But his ideal is single-payer health care, where there is -- by definition -- a government monopoly that prohibits both choice and competition. If "public plan" supporters honestly wanted choice and competition, why do they oppose policies that would make Medicaid and Medicare compete? For example, vouchers that Medicaid and Medicare recipients can use to buy commercial insurance. Or better yet, allow taxpayers to opt out of funding these programs by getting tax credits for donations to comparable charities.

A "public plan" would not even compete fairly with insurance companies. It would have access to tax dollars, and many other advantages. As professor Harrington concludes, "equal competition between a government health-insurance plan and private plans would be impossible.

"If a government health "program were to be stripped of any special advantages it would cease to be a government program. It would be just another private insurer," writes Michael Cannon of the Cato Institute.

If politicians truly want more competitive insurance markets, they should remove the tax code's bias for employer-provided insurance, which shields insurers from competing directly for patients' business. But politicians covet votes most. Since the biased tax code empowers unions, Democrats are not likely to touch it without giving unions special treatment.

Brian T. Schwartz

(It's the fourth one down, also mirrored here.)

Thanks, Brian, for your tireless efforts!

Of NICE and Men

The July 7, 2009 Wall Street Journal describes the British NICE health care rationing board.

In essence, their system saves money by depriving their citizens of life.

Will this be the future of American health care?

Schroeder Critiques Grand Junction Model

Dr. James Schroeder has written a great OpEd for the July 10, 2009 Grand Junction Free Press criticizing the "Grand Junction Model" for health care which is now being touted as the method to achieve government health care reform.

Here's an excerpt from his piece, "Die sooner, save money":

...First, a large study done at Dartmouth University looking at variations in Medicare spending was released in April 2008. More recently Dr. Atul Gawande, an Ivy League surgeon, wondered in the June 1 issue of The New Yorker magazine why McAllen, Texas, had one of the nation's highest levels of Medicare spending. Grand Junction's name came up in that article as one of the lowest spending regions.

Now, President Obama's team is using the Dartmouth study to leverage advancement of the Democrat party's health care proposal.

...All the data showed is that some hospitals spent more than others. As such, this study could serve as a starting point for further research, not as a measure of how to model health care delivery for the nation as a whole. Now let me rephrase this in case you weren't paying attention. The death rate in this particular study was 100 percent. Yes, you read that right, every single patient analyzed in this study died! The only logical conclusion to be made is that Grand Junction is efficient at getting people to the point of death.

Hang on to your wallet, because the Dartmouth Atlas will now be touted as showing that some regions (Grand Junction being the shining example) are “more efficient” at delivering health care while saving money! This in turn will serve as the anvil upon which health care spending throughout the country will be hammered into line by a federally controlled health care system. In fact, the Dartmouth study reveals absolutely nothing about efficiency. Determining "efficiency" will require looking at end points other than death, and will include individual interpretations of value, quality and lifestyle. But those things are much more difficult to measure, so we are about to be treated to an example of using data wrongly to support a wrong-headed argument.

...The current administration advocates a system that will take those difficult value judgments out of your hands and put them in the hands of a nice, caring, compassionate bureaucrat. If one could practice medicine by a cookbook approach, we would not need more family physicians, we would need fewer, because a simple computer program could do the job. But it just is not that simple.

(Read the whole thing.)

Government-run health care can always save money by denying care and taking decision-making out of the hands of doctors and patients and shifting it onto the bureaucrats.

It's "efficient", but deadly.

Is that what Americans want?

(I do have a couple of minor disagreements with Dr. Schroeder's analysis, which are also nicely covered by Ari Armstrong. But overall, I agree with his major points.)

Massachusetts Vs. Georgia - In Lego!

The President and Congress want to impose a Massachusetts-style plan on the entire country.

This short video compares costs and waiting times in Georgia and Massachusetts, with assistance of some Lego patients:



If you want more expensive care and longer waits, support the Massachusetts plan!

The Human Face of Socialized Medicine

Galileo Blogs tells a heart-wrenching story of another death in Canada due to socialized medicine.

Schwartz on MassHealth

Brian Schwartz points out that the government-run MassHealth program in Massachusetts denies payment for treatments far more than the commercial insurance companies.

Those who think that a government-run "single payer" system will provide more care than the semi-free market system we have now will be in for a rude awakening.

More Mythbusting From The AAPS

The AAPS debunks yet more commonly-held myths.

This time they tackle, "Myth 3. Americans are going bankrupt, and American companies are noncompetitive, because we don't have 'universal health care.'"

Save Justin's Health Insurance

The Independence Institute points out more problems with Massachusetts-style mandates to provide "universal coverage" in this video, "Save Justin's Health Insurance":



(Via Free Colorado.)

Canadian Cost Controls

As health costs continue to rise, Canadian government authorities impose yet further controls which amount to rationing.

William Watson describes the latest insanity in the June 24, 2009 Financial Post:

...To keep expenses down, Quebec's Ministry of Health imposes surtaxes on physicians who make more than about $200,000 a year -- gross of expenses. What with swine flu and all, it's been a busy year for pediatricians. Some of those running the Tiny Tots Clinic apparently have already bumped up against their maximum income. As a result, they're now going to be paid at 25¢ on the dollar for all the services they provide between now and the end of the year.

Think of it as a kind of Tax Freedom Day in reverse. Tax Freedom Day is when you've earned enough in the year to pay all your taxes and can then start working for yourself. But if you're a Quebec doctor, it works the other way around: As early as June, depending how hard you worked the first part of the year, you may start working almost entirely for the government.

Trouble is, 25¢ on the dollar doesn't pay the clinic's overhead. So the clinic has been restricting its hours while the doctors petition the Minister of Health for permission to be re-classified so they can keep working with full remuneration for the services they’re providing.

What a bizarre country we live in. A doctor wants to treat a child. That child's parent wants the child treated. But if the doctor is to be paid for providing treatment, they have to await permission from the Minister of Health.

Read the whole thing.

If the government pays for health care, it will demand a say in how the money is spent. These sorts of problems are the inevitable result...

(Via RM.)

Wal-Mart and the Employer Mandate

The advocates of "universal health care" got a big boost recently when Wal-Mart went on record as supporting an employer mandate requiring companies to provide health insurance for their workers.

But Michael Cannon explains why they did this. Basically, it's to use the power of the government to hurt their smaller competitors:

...[I]t all became clear when the lobbyist explained the reason for Wal-Mart's position: "Target's health-benefits costs are lower."

I have no idea what Target's or Wal-Mart's health-benefits costs are. Let's say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000. An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart. But it would cripple one of Wal-Mart's chief competitors.

This is just another example of the sort of unholy alliance that some big businesses and government regulators make in order to put a squeeze on smaller competitors.

This is very similar to the explanation that Tim Carney at the DC Examiner offered for Mattel's support behind onerous new regulations on lead content in toys:

Washington toy story shows why regulation helps the big guys

... [M]anufacturers who mass produce toys or children's furniture will face some added costs from the bill, but these are costs they can bear—especially because the costs will be industry wide thus passed onto consumers.

Indeed, many of the bigger manufacturers have already implemented testing procedures to comply with the federal requirements. Their smaller competitors, however, will suffer under the burden.

A stay-at-home mom who sews children's dolls on the side or a small woodworker who sells a few child-sized chairs each year will find these regulations much more burdensome if not impossible.

The big businesses offer their support for regulations in exchange for having some say ("a seat at the table") in crafting their specific provisions. The politicians get to claim that they have a "consensus" from all the "stakeholders".

In other words, the businesses provide political cover for the politicians in exchange for the politicians providing economic protection for the businesses.

Only this time, the victims won't just be customers purchasing children's toys. Instead, it will be every American who needs health care -- which is pretty much all of us...

(Via David Catron and Brian Schwartz.)

More on the Administrative Savings Myth

The AAPS debunks the widely-repeated myth that, "A public plan could save enough on administrative costs to provide coverage to all".

Some excerpts:

...The basis for the assertion is the claim that Medicare spends only 2% to 3% of its outlays on administration, compared with private plans’ alleged costs of 20% to 25%.

In fact, data from the Congressional Budget Office (CBO) shows that insurance companies spend at least 50% less on administration that government does on its health programs. (The Congressional Budget Office Reports: Comparing health care admin cost: who's less costly?)

Furthermore, there are various accounting differences that one must remember when comparing relative administrative costs of Medicare vs. private insurance plans that make Medicare seem artificially cheaper than it really is:

* Private insurance plans must pay government taxes and assessments up to 5% of premiums. When these are factored out, the real net cost of private administration is less than 10%.
* CMS excludes the cost of its own employees who enroll recipients, perform outreach and education, handle customer service, and do auditing and other functions. Private plans include these in overhead.
* Private plans have on average a higher number of claims to process for a given amount of expenditure.
* Insurance companies have to collect premiums. The IRS does that for Medicare.
* Private companies do underwriting; their premiums have to cover their costs. Medicare deficits have to be covered by taxpayers.
* The cost of servicing the public debt is not included in Medicare costs—and Part B is 75% subsidized by general revenues, not beneficiary premiums.

Journalists and politicians need to be aware of these hidden costs, rather then repeating myths promoted by those with a specific policy agenda.

Harsanyi on Lying With Statistics

The June 26, 2009 Denver Post carried this column by David Harsanyi on the statistical falsehoods being used to allegedly justify "universal health care". Here is an excerpt:

How to lie with statistics — again

Did you know that around 300 million Americans went without food, water and shelter at some point last year?

I am a survivor.

...One of the most persistent examples of modern-day statisticulation is the sufficiently true claim that 46 million (it becomes 50 million when senators really get keyed up) Americans are without health insurance.

...It is true that the 46 million figure is based on unreliable Census Bureau data. But even the less unreliable Congressional Budget Office puts the number at around 31 million. And even that number, former CBO Director Douglas Holtz-Eakin claims, is an "incomplete and potentially misleading picture of the uninsured population."

For one reason, the uninsured figure counts every American (and illegal immigrant) who has been uninsured for any time frame during a year, even if they happen to be between jobs or changing insurance plans or on family visit to Guatemala.

...Then, another portion of uninsured Americans already qualify for an existing government health insurance program — and government already controls 46 percent of spending on health care — for which they have not signed up.

The CBO estimates that as many as 15 percent of the chronically uninsured are already eligible for help. The Urban Institute (hardly advocates of free-market fundamentalism) found that 25 percent of the uninsured qualify for some program.

...Turns out that 8.4 million uninsured Americans are making $50,000 to $74,999 and 9.1 million more are making more than $75,000. Health insurance is just incompatible with their lifestyles, I guess.

There are obviously inconveniences — children and mortgages, for instance — that can quickly make $50,000 seem like a pittance. Then again, 27 percent of all adults in their 20s (many, I presume, without offspring) choose not to have health insurance. Many of them surely have the means to purchase insurance, but after meticulously considering the tradeoffs (imbibing or insuring?) say no thanks.

Read the whole thing.

Harsanyi correctly notes that this is not a primary argument to oppose nationalized health care. But it's still important to debunk bad statistics, especially when they are so frequently used to justify bad policy proposals.

The Forbidding Arithmetic of Healthcare Reform

Even Massachusetts governor Deval Patrick say that perhaps the US should not adopt the Massachusetts plan on a national level, according to this June 29, 2009 article in the Boston Globe, "The forbidding arithmetic of healthcare reform".

The arguments they make are primary economic (albeit important ones). For additional perspective, please see my TOS article on the topic, "Mandatory Health Insurance: Wrong For Massachusetts, Wrong For America".

Congress Exempts Itself From Insurance Controls

In the June 19, 2009 Wall Street Journal Betsy McCaughey notes that Congress will exempt itself from new insurance controls that it wishes to impose on the rest of us.

Here is an excerpt:

Dissecting the Kennedy Health Bill

Last September Sen. Barack Obama promised that under his health-care proposal "you'll be able to get the same kind of coverage that members of Congress give themselves." On Monday, President Obama repeated that promise in a speech to the American Medical Association. It's not true.

The president is barnstorming the nation, urging swift approval of legislation that is taking shape in Congress. This legislation -- the Affordable Health Choices Act that's being drafted by Sen. Edward Kennedy's staff and the Health, Education, Labor and Pensions Committee -- will push Americans into stingy insurance plans with tight, HMO-style controls. It specifically exempts members of Congress (along with federal employees; the exemptions are in section 3116).

Members of Congress "enjoy the widest selection of health plans in the country," according to the U.S. Office of Personnel Management. They "can choose from among consumer-driven and high deductible plans that offer catastrophic risk protection with higher deductibles, health saving/reimbursable accounts and lower premiums, or fee-for-service (FFS) plans, and their preferred provider organizations (PPO), or health maintenance organizations (HMO)." These choices would be nice for all of us, but they're not in the offing. Instead, if you don't enroll in a "qualified" health plan and submit proof of enrollment to the federal government, you'll be tracked down and fined (sections 3101 and 6055)...

Read the whole thing.

Under the Kennedy plan, you may not decide for yourself what sort of insurance best suits your needs. Instead, the government would determine what counts as "qualified".

This is a clear violation of the rights of patients and insurers to contract freely for their mutual benefit.

Schroeder on the Dartmouth Atlas

Pediatric cardiologist Jim Schroeder has been active responding to state and national level attention being paid to health care in Grand Junction, CO.

In particular, he has responded to some recent articles and opinion pieces in the Grand Junction news:

"Obama invited to tour valley health insurer" (June 11, 2009)

"Grand Junction shows how a responsible health system can operate" (June 18, 2009)

"GJ's acclaimed health care system may not be easy to replicate" (June 21, 2009)

Here is Dr. Schroeder's analysis, reproduced in full (with his permission):

Grand Junction in the Spotlight

It has been an unusually cold spring in Grand Junction, but hold onto your hats folks (not to mention your wallets) because it is about to snow in July.

Lil Ol' Grand Junction has popped up on the national scene in the current healthcare discussion. As a result, President Obama has been invited to visit Grand Junction as a shining example of how health care delivery should be done on a national scale and breathless local TV news reporters and members of the medical community are gushing. But in the excitement of being noticed by Washington some inconvenient facts are being ignored and other facts are being manipulated. Before we get too blinded by the spotlight of national attention that is about to hit, perhaps we should take a deep breath and regain a little perspective.

Why did Grand Junction's name pop to the surface? Here is the sequence of events. First, a large multi-year academic study was done at Dartmouth University (one of the lesser Ivy League schools) designed to look at regional variations in Medicare spending on health care. These results came out in April 2008. More recently Dr. Atul Gawande, an Ivy League surgeon, wrote an opinion piece or essay in the June 1 issue of The New Yorker magazine purportedly investigating why McAllen, TX has one of the nation’s highest levels of Medicare spending. Grand Junction’s name popped up in that article (alongside the Mayo Clinics) as one of the lowest spending regions. Next, this information came to the attention of one Barack Obama (an Ivy League graduate) who apparently is now using the Dartmouth study as a fulcrum to try to leverage advancement of the Democrat party’s health care proposal. Let me elaborate:

1. The Dartmouth Atlas: This study contains some intriguing data but is also being misrepresented in some ways. To briefly recap, the Dartmouth Atlas collected and analyzed data concerning the amount of Medicare dollars expended during the last two years of an individual’s life. They did this by the simple expedient of starting at the time of each person’s death and looking backward at Medicare records over a two year period. Patient expenditures were assigned to the primary hospital used during that two-year look back period and also to the city of residence at the time of death. Patients who were enrolled in a managed care plan were not included in the analysis. The data showed a wide range of variation between individual hospitals, cities and regions in the amount of dollars spent by Medicare in the last two years of a person’s life. For example, for inpatient hospital costs the values ranged from $13,706 (Dubuque, IA) to $51,917 (Manhattan) per deceased person. Grand Junction came in at $14,739 and was the lowest among 7 regions in Colorado while McAllen, TX came in at $33,729. What the data did not provide was an answer for why these differences exist. The data also did not show whether these differences in spending had anything whatsoever to do with the quality of the health care provided or any outcome other than death. The data did not indicate one way or the other whether the only outcome included in the study (death) happened earlier or later in hospitals that spent a lot or spent a little. All the data showed is that some hospitals spent more Medicare money than others. As such, this study should serve as a starting point for further research, not as a measure of how to model health care delivery for the nation as a whole.

Here's where you need to hang on to your wallet, because what is about to happen is that the Dartmouth Atlas will be touted as showing that some regions (Grand Junction will be held out as the shining example) are "more efficient" at delivering healthcare while saving money! This in turn will serve as the anvil upon which health care spending throughout the country will be hammered into line by a federally controlled healthcare system. In fact, the Dartmouth study reveals absolutely nothing about efficiency. Before that discussion can even begin, there must be some agreement on what constitutes 'efficiency'. That will require looking at end points other than death, and will include individual interpretations of value, quality and lifestyle. But those things are much more difficult to measure, so we are about to be treated to an example of using the wrong data to support the wrong argument for the wrong purposes.

2. Grand Junction: There are some aspects of Grand Junction that are unique in respect to this discussion. Grand Junction is relatively isolated geographically, with substantial mountain ranges separating it from the two closest metropolitan areas (Denver and Salt Lake City). The economy of Grand Junction primarily consists of agriculture and energy exploration and production. There is not a large union presence or much heavy industry. Small businesses abound. There is one large hospital (St. Mary's Hospital) and one small niche hospital (Community Hospital). St. Mary's has a fairly wide range of services while Community Hospital is more limited (e.g. no obstetric or newborn services, etc). There is one large regional insurance company, Rocky Mountain HMO. Grand Junction has a disproportionately high number of family practice physicians compared to larger metropolitan areas and a smaller number of specialists and even fewer subspecialists.

These are some of the reasons the current local framework works for Grand Junction:

-geographical isolation (G.J. is an inland island)
-fairly homogenous patient population
-homogenous range of physicians (FP predominating)
-good range of basic services, but limited range of specialty services
-sicker (i.e. more expensive) patients often are sent to Denver or Salt Lake City
-limited range of industry (i.e. the large corporate purchasers of health insurance)
-lack of a strong labor union presence (i.e. strong voice in benefits/coverage of plans)
-lack of competition for hospital services
-lack of competition for specialty/subspecialty services
-dominant local health insurance provider (HMO)

Those same reasons are exactly why the Grand Junction model will not serve well as a useful model for national health care. But that won’t stop some from trying to jam the ugly stepsister’s foot into Cinderella’s slipper (gratuitous fairy tale reference).


3. The Cost Conundrum -- What a Texas town can teach us about health care

By Dr. Atul Gawande
Here is an excerpt from Dr. Gawande's article:

The Mayo Clinic is not an aberration. One of the lowest-cost markets in the country is Grand Junction, Colorado, a community of a hundred and twenty thousand that nonetheless has achieved some of Medicare's highest quality-of-care scores.

Michael Pramenko is a family physician and a local medical leader there. Unlike doctors at the Mayo Clinic, he told me, those in Grand Junction get piecework fees from insurers. But years ago the doctors agreed among themselves to a system that paid them a similar fee whether they saw Medicare, Medicaid, or private-insurance patients, so that there would be little incentive to cherry-pick patients. They also agreed, at the behest of the main health plan in town, an H.M.O., to meet regularly on small peer-review committees to go over their patient charts together. They focussed on rooting out problems like poor prevention practices, unnecessary back operations, and unusual hospital-complication rates. Problems went down. Quality went up. Then, in 2004, the doctors' group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States.

Grand Junction's medical community was not following anyone else's recipe. But, like Mayo, it created what Elliott Fisher, of Dartmouth, calls an accountable-care organization. The leading doctors and the hospital system adopted measures to blunt harmful financial incentives, and they took collective responsibility for improving the sum total of patient care.

Keep in mind when reading this excerpt:

-"Grand Junction... has achieved some of Medicare's highest quality-of-care scores"

The Dartmouth data does not assess "quality of care". If he is referring to some other measures of quality he does not specify the source.

-"Problems went down. Quality went up."

There is no citation or data to support this comment other than an interview with Dr. Pramenko.

-"Then, in 2004, the doctors' group and the local H.M.O. jointly created a regional information network—a community-wide electronic-record system that shared office notes, test results, and hospital data for patients across the area. Again, problems went down. Quality went up. And costs ended up lower than just about anywhere else in the United States."

Once again, there are no data linking the creation of the regional information network with lowering of costs, decreased problems or increased quality. In fact, the Dartmouth data was collected from the beginning of 2001 to the end of 2005. The majority of the Dartmouth data therefore preceded the existence of the network (founded in 2004). In addition, since managed care Medicare patients were not included in the Dartmouth analysis, attributing any supposed savings to the HMO is dubious at best.

Dr. Gawande goes on to conclude that the reason for high expenditures in McAllen, TX is overutilization of medical services. Unfortunately, there is no definition of what constitutes "over-" or "under- utilization other than the cited dollar expenditures. Carried to its ridiculous extreme that would mean spending zero dollars would equal the "most efficient" strategy.

4. Having personally practiced medicine both in South Texas (San Antonio, just a couple hundred miles north of McAllen) and in Grand Junction, I can offer some perspective on the discrepancies between the two regions.

I can tell you from first-hand experience that there are huge differences in the collective mindsets of the medical community of South Texas when compared to the medical community of Western Colorado. Whether the differences reflect inherent cultural differences of either the general population or the doctors, historical evolution of medical services in the respective areas, demographic pressures, or some other factors I cannot say. I would not, however, be going too far out on a limb to say that corruption is rampant in South Texas. The mindset I saw when I lived there was one of "bill as much as you can get away with and then bill some more". Medicaid fraud was an everyday occurrence if not a way of life and diagnostic testing was used indiscriminately as a revenue source.

The mindset in Grand Junction has more typically been one of primary care, prevention and less utilization of diagnostic testing and subspecialty services. While it is safe to say that McAllen "overutilizes" it could be equally valid to say that Grand Junction "underutilizes".

5. It is reasonable and probably important to wonder why there are local and regional variations in health care spending. For now however, the available data raise interesting points of speculation rather than providing any answers. One could even make the case that regional variation in spending is not inherently a bad thing. We seem to be continuing to experiment on various ways of delivering health care. What works for Grand Junction will probably not work for Los Angeles or McAllen, TX.

Almost certainly a "one size fits all" nationalized approach will be untenable. Dr. Gawande acknowledges this to an extent when he calls for rewarding doctors and hospitals that unite into "accountable-care organizations, in which doctors collaborate to increase prevention and the quality of care, while discouraging overtreatment, undertreatment, and sheer profiteering."

Health care is, like any other commodity, finite in its supply. When you get right down to it, the entire health care debate can be conceived of as wrestling with the question of how to distribute a finite number of dollars for the purchase of health care services for a diverse population of 300 million. The only way to do that is by allocating expenditures or resources, or in other words, the dreaded "R"-word... rationing. Like it or not, rationing is at the core of every single healthcare reform proposal under consideration. Every entity that has a hand in the pie is trying with all their might to hang onto their piece and maybe get a little bit of someone else’s while those who seek to control the system are trying to fairly divide the pie.

Free market advocates believe that individuals making decisions in their own rational self interest, using the fruits of their own labor will collectively make wise decisions that will result in an inherent balance or "fairness" of the system. Those who value a given product or service more will choose rationally to spend more of their own money to purchase that product or service. Those who don't value a given product or service can choose to buy a boat or ATV instead. On the other hand, advocates of nationalized healthcare (including the current Congress and Administration) believe that a centralized government agency or oversight committee can efficiently collect individual wealth from a segment of society, pool that money for the purchase of health care goods and services for "all" and micromanage the delivery of these multitudinous goods and services and allocate resources effectively and fairly from Washington, D.C.

The questions you should be asking are these: Who will be making the rationing decisions and will those decisions be in your best interest? How is quality defined and how is it measured? What outcomes are measured and how accurately can they be measured? Does the raw data actually support the claims that are being made? Who gets to decide how much money gets spent on your health care during the last two years of your life, or the last five years of your life or any other arbitrary length of time?

We can only hope that what is good about the local medical system does not get swallowed up by a voracious federal juggernaut or glossed over in a meaningless sound bite. Is Grand Junction really a shining example of how to run health care or are we just giddy that a national celebrity might come to visit? Is that bright light the spotlight of a grateful nation or the headlight of an onrushing federal healthcare train barreling down the tracks directly at us? Listen carefully and critically to what is said. Take time to educate yourself. Speak up among your family, friends, community leaders and legislative representatives and let them know where you stand. And finally, wear your mittens and a sweater, Grand Junction, for the snow job is about to begin.


James K. Schroeder, MD

Dr. Schroeder is a practicing Pediatric Cardiologist currently living and working in Grand Junction. He has previously practiced medicine in the military for 13 years and in San Antonio, TX for 8 years. He attended high school in the Palisade High School right here in the Grand Valley. He attended college at West Point and the University of Colorado and medical school at Tulane University in New Orleans. Dr. Schroeder cares deeply about the future of his profession and the future his grandchildren will inhabit.

Dr. Schroeder makes many excellent points.

My only additional comment is to note that when producers and consumers are allowed to exchange goods and services in a free market (which the current system is not), the result is not rationing. Instead, it's an allocation based on people acting according to their own values and priorities in a just fashion.

Someone who purchases health care from a willing provider has earned it.

If someone needs medical care but can't pay for it, then he should ask for voluntary charity from others. But he should not demand it as some sort of "right" owed to him by a provider -- that would be asking for the unearned.

In contrast, rationing is a system in which the government allocates some good service according to its assessment, independent of the wishes of those who produce it. This violates the rights of the producers and the other consumers who may wish to trade with the producer on other voluntary terms.

This is the gross injustice of rationing, and we've seen the end result in other countries such as Canada and Great Britain, where the government decides who gets what sorts of access to advanced technology, and when.

Let's hope we never see that in the US.

Armstrong: Reject Political Control Of Health Care

The June 24, 2009 Grand Junction Free Press has published this OpEd by Linn and Ari Armstrong entitled, "Reject political control of health care".

Here is the piece in full:

Reject political control of health care
By Linn and Ari Armstrong

Medical decisions can be made by voluntary agreements among patients, doctors, and insurers. Or they can be made by politicians and their appointed bureaucrats. President Obama hopes for more of the latter.

While details remain sketchy, the centerpiece of Obama's plan is a "public" option, meaning that taxpayers would subsidize more health care, probably amounting to well over a trillion dollars over the coming decade.

Calling these forced wealth transfers "public" is misleading. Generally hospitals, doctors' offices, and insurance plans are already open to the public. Any member of the public is welcome to ask for these services and pay for them. But in Obamaland "public" means something different. It means that some members of the public can force other members of the public to help pay for their health care.

Recently, Obama said that his "public" plan would "ensure coverage for people where the free market system fails." He said, "We've got to admit that the free market has not worked perfectly when it comes to health care."

The reason that the "free market has not worked perfectly" is that there is no free market in health care, nor has there been one for many decades, Obama's magnificent lie notwithstanding. The problems with American medicine arise from decades of political interference in medicine -- so of course Obama wants to expand such interference.

Between Medicare, Medicaid, and other tax-funded programs, government spends nearly half of all health care dollars. In addition to driving up federal spending and threatening financial catastrophe in coming years, such programs increase health costs for everyone else by loading down doctors with paperwork and red tape, underpaying doctors, and artificially increasing the services demanded.

The federal government has entrenched employer-paid insurance through tax policy. Lose your job, lose your insurance. This especially screws people who develop medical conditions and then lose their jobs. Because of the tax incentives, such insurance also encourages people to run everything through insurance, which again drives up prices by increasing paperwork and decreasing the incentive to monitor costs. It would be like buying auto insurance that covers oil changes and tire rotations.

Among the many other political controls of medicine, both state and federal governments impose all kinds of insurance mandates, driving up insurance premiums and pricing many out of the market.

So, now that federal politicians have completely screwed up the private insurance market, they want to provide tax-funded insurance. How generous.

But Team Obama is clever. In further destroying the free market in medicine, Obama nevertheless adopts the rhetoric of capitalism. He said, "If the private insurance companies have to compete with a public option, it will keep them honest and it will help keep their prices down."

In the context of a free market, open competition indeed encourages companies to remain innovative and cost-conscious. But we are not talking about a free market here. We are talking about the federal government essentially knee-capping private insurance companies and then forcing people to pay protection money to finance the political plan. It is the "competition" of gangsters.

Obama dismisses as irrational "fear, that somehow once you have a public plan that government will take over the entire health care system."

Really? The logic behind the plan is to punish private insurance providers and tax-subsidize the "competition." Such a plan is just a back-door approach to eventually establishing "single-payer," meaning the federal government assumes responsibility for most medical payments. And he who pays the piper calls the tune. What the federal government finances, the federal government controls.

If you think we're stretching, watch the YouTube video, “The Public Plan Deception -- It's Not About Choice.” In the past Obama professed support for single-payer. Earlier this year Democratic Congresswoman Jan Schakowsky said she agrees that “the public option will put the private insurance industry out of business and lead to single-payer.”

We agree that insurance companies play too great a role in our health decisions and fail to offer the best kinds of insurance. Again, this is strictly a result of federal interference in insurance, and the solution is to get politicians out of the insurance industry, not let them take it over completely.

Obama has also been clever in tying the political takeover of health financing to tort reform. Obama told doctors that, if they get on board, he will do something about "excessive defensive medicine," referring to the insane and unjust law suits often brought against doctors that raise costs for the rest of us.

But if the legal system needs reform -- and we agree it does -- that should be done for its own sake, not used as a club to force doctors into compliance.

Political interference in medicine caused the problems. You're crazy if you think more of the same will solve those problems. And you're putting the health, finances, and liberty of the rest of us at grave risk.

-----------------------------------

Linn Armstrong is a local political activist and firearms instructor with the Grand Valley Training Club. His son, Ari, edits FreeColorado.com from the Denver area.

The piece is also mirrored on Ari Armstrong's FreeColorado.com website.

Thank you, Linn and Ari, for that clear and principled statement!

Will on the Public Option

George Will explains why the "public option" is more accurately called, "The Stealth Single-Payer Agenda".

Among the many good points he raises, here are two:

Arguments for the public option are too feeble to seem ingenuous. The president says competition from a government plan is necessary to keep private insurers "honest." Presumably, being "honest" means not colluding to set prices, and evidently he thinks that, absent competition from government, there will not be a competitive market for insurance. This ignores two facts:

There are 1,300 competing providers of health insurance. And Roll Call's Morton Kondracke notes that the 2003 Medicare prescription drug entitlement, relying on competition among private insurers, enjoys 87 percent approval partly because competition has made premiums less expensive than had been projected. The program's estimated cost from 2007 to 2016 has been reduced 43 percent.

Some advocates of a public option say health coverage is so complex that consumers will be befuddled by choices. But consumers of many complicated products, from auto insurance to computers, have navigated the competition among providers, who have increased quality while lowering prices.

Read the rest here or at this mirror.

The Unfree Market in Health Care

In response to President Obama's claim that the free market has failed us in health care, Brian Schwartz reminds us why the current problems in health care should not be blamed on the free market but rather on government interference in the free market.

Here's an excerpt from his post:

Does Barack Obama seriously think that there's a free market in medical care or insurance in Unites States? Is he ignorant? Is he trying to trick us?

Sure, there is a market, that is, people exchange goods and services. But it is by no means free from political mandates, controls, and prohibitions. That is what a “free market” is supposed to be free from, where people interact on a voluntary basis. Government’s taxing citizens to pay for other people's medical care, prohibitions and mandates on how insurance companies, hospitals, physicians, drug companies, etc. can interact with customers are all intrusions the market that make it less free.

As Ronald Bailey points out, "about 47 percent of all health care expenses today are paid for by federal, state, and local governments, e.g., Medicare, Medicaid, and State Children's Health Insurance Program (SCHIP)." Both Medicaid and Medicare drive up insurance premiums, not to mention the taxes you pay for them.

And then there's regulation...

Read the whole thing.

George Mason University economics professor Peter Boettke makes a similar point in this article:

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'?

Although Boettke was referring to the financial crisis, his analysis applies equally well to health care policy.

Or as Ayn Rand stated in 1975:

One of the methods used by statists to destroy capitalism consists in establishing controls that tie a given industry hand and foot, making it unable to solve its problems, then declaring that freedom has failed and stronger controls are necessary.

Before we can fix the problems in American health care, we must correctly identify the source of those problems. Thank you, Brian, for doing exactly that.

Market-Based Reforms at Safeway

The June 19, 2009 Wall Street Journal has a good article discussing how Safeway CEO Steve Burd has reduced health care costs and improved quality of care for his employees through market based reforms.

Here are a few excerpts:

...As recently as 2004, Safeway was suffocating under health-care costs growing at 10% a year.

...Today, Safeway has accomplished what Washington claims is the goal: The company's per-capita health-care expenses have remained flat, compared to the near 40% increase experienced by the rest of corporate America over the past four years. This has not been done by cutting care or shifting costs to employees. Nearly 80% of the 30,000 nonunion Safeway workers who take part in the program rate it good, very good, or excellent.

Magic? Not even. Mr. Burd explains that the "cure for today's ills is simply removing the obstacles to a free health-care market."

Read the whole thing.

Employers, employees, and providers all win when the free market is allowed to operate. Safeway employees have experienced these benefits first-hand. Let's hope that our legislators are willing to learn from their experience.

Harrington on the Public Plan

The June 15, 2009 Wall Street Journal carried the following OpEd by Scott Harrington, warning that "The 'Public Plan' Would Be the Only Plan".

Catron's Warning

One of my favorite health care writers, David Catron, warns "How Obamacare Will Change Your Life".

Catron's own blog is here.

Five More Reasons To Oppose ObamaCare

T.L. James of the People's Press Collective lists "Five More Reasons to Oppose Obama's 'Single-Payer' Collectivized Healthcare". Here are his main points:

1. The Incompetence of Large Organizations
2. More Government = More Options for Corruption
3. Power Granted to the Government Will Inevitably Be Abuse
4. Healthcare Will Be Distorted by Vote-Farming Politicians
5. Healthcare in Government Hands Means Unstoppable Nannying

Read the whole thing.

Informative Links

As health care takes center stage in the political debate, some good articles have been published recently analyzing different facets of the issue. Here are a few informative links:

"How Not to Reform Health Care" by Michael Tanner
(Massaschusetts is a model of failure that we should not emulate at the national level.)

"Canada's ObamaCare Precedent" by David Gratzer
(Canada is a model of failure that we should not emulate in the US.)

"4 reasons why Obama's health plan is no bargain" by Shawn Tully
(Why Obama's plan will fail if implemented.

Another Doctor "Goes Galt"

Psychiatrist-blogger "Dr. Sanity" explain why she's stopped fighting against socialized medicine. Here are some excerpts from her June 13, 2009 blog post:

THIS TIME, I DON'T CARE ANYMORE...LET THE ZOMBIES TAKE OVER MEDICINE

...My entire professional life as a physician and psychiatrist I have been exceptionally vocal about the prospect of government medicine here in the US. I have given impassioned speeches (when I was younger); written essays in medical journals and elsewhere; and talked until I am blue in the face to anyone and everyone about the horrors of socialized medicine and government interference in the health care system of this country. Once it would have seemed impossible that I would ever want to quit medicine; to stop practicing psychiatry.

I have watched with dismay as every year we have inched closer and closer to the Democrats and the left's goals; goals which I firmly believe will completely destroy American medicine. I have watched up close and personal the utter soul-destroying consequences to both patients and doctors alike, of the pervasive cultural collectivist and looter thinking in my specialty. Every time this madness is killed, it just doesn't stay dead. Like some kind of putrefying zombie, the left just keeps resurrecting it. Logic doesn't matter. Facts don't matter.

Let's face it. To the zombies of the left, reality doesn't matter. With President Postmodern in office, aided and abetted by zombie hordes in Congress; why should I pretend anymore that it does?

This time around, I JUST DON'T CARE ANYMORE. If that's what people want, so be it.

I'm done. If Congress passes Obama's destructive zombie health plan in any form, I quit.

I will simply not practice medicine anymore. I will take my psychiatry books and my years of experience and do something else. I used to wait tables when I was in college. It's an honest living and Obama isn't interested for the time being in nationalizing restaurants--yet.

Let me be clear. I don't believe that people have a "right" to health care; because, what advocating such a "right" basically means is that you believe you have a "right" to my mind; you have a "right" to my professional competence; i.e., you have a "right" to enslave me.

Read the whole thing.

This doctor understands the central moral issue -- namely, that "guaranteed" health care enslaves the physician.

If Obama's health care plan passes, we'll see more doctors taking her approach and quitting the field.

And yet another "prophecy" from Ayn Rand's book Atlas Shrugged will have become true. In the words of the character Dr. Hendricks:

Do you know what it takes to perform a brain operation? Do you know the kind of skill it demands, and the years of passionate, merciless, excruciating devotion that go to acquire that skill? That was what I would not place at the disposal of men whose sole qualification to rule me was their capacity to spout the fraudulent generalities that got them elected to the privilege of enforcing their wishes at the point of a gun. I would not let them dictate the purpose for which my years of study had been spent, or the conditions of my work, or my choice of patients, or the amount of my reward. I observed that in all the discussions that preceded the enslavement of medicine, men discussed everything -- except the desires of the doctors. Men considered only the "welfare" of the patients, with no thought for those who were to provide it. That a doctor should have any right, desire or choice in the matter, was regarded as irrelevant selfishness; his is not to choose, they said, only "to serve."

...I have often wondered at the smugness with which people assert their right to enslave me, to control my work, to force my will, to violate my conscience, to stifle my mind -- yet what is it that they expect to depend on, when they lie on an operating table under my hands?

Stossel on Competition

John Stossel explains why competition and free market reforms will save American health care.

Hennessey on KennedyCare

Keith Hennessey lays out the big problems with the proposed Kennedy health care "reform" plan.

And here's his updated analysis of the House of Representatives version.

Mankiw Asks the Big Question

In all the discussion about the so-called "public plan" supported by President Obama, Greg Mankiw notes that very few people are asking the big question:

...Would the public plan have access to taxpayer funds unavailable to private plans?

If the answer is yes, then the public plan would not offer honest competition to private plans. The taxpayer subsidies would tilt the playing field in favor of the public plan. In this case, the whole idea of a public option seems to be a disingenuous route toward a single-payer system, which many on the left favor but recognize is a political nonstarter.

If the answer is no, then the public plan would need to stand on its own financially and, in essence, would be a private nonprofit plan. But then what's the point? If advocates of a public plan want to start a nonprofit company offering health insurance on better terms than existing insurance companies, nothing is stopping them from doing so right now. There is free entry into the market for health insurance. If a public plan without taxpayer support would succeed, so would a nonprofit insurance company...

Mankiw is quite correct.

As we already know, there are many who view the "public plan" as just a stealth mechanism to get to a single-payer system which most Americans would reject.

This is why the "public plan" must be opposed.

Galen Video Contest Winners

The Galen Institute has announced the winners of their video contest to highlight the dangers of socialized medicine.

First place, "Universal Car Care":



Second place, "First, Do No Harm":



Third place, "Free Market Boyz":

Pipes on Canada

Sally Pipes has two-part editorial in the Washington Examiner on the problems with Canadian health care (and the problems Americans will soon face if we adopt our own "universal health care" system). I highly recommend reading both parts:

"Canadians seeking health care have a 'wait problem'" (June 3, 2009).

"Canadian patients face long waits for low-tech healthcare" (June 5, 2009)

Killing Medical Innovation

In the June 1, 2009 Wall Street Journal, Tevi Troy warns that the push towards government-run "universal health care" will strangle the sorts of medical innovation that we currently take for granted.

Here are a few excerpts:

The End of Medical Miracles?

...Scientific discoveries are neither inevitable nor predictable. What is more, they are affected, especially in our time, by forces outside the laboratory—in particular, the actions of politicians and government bureaucracies.

...The conduct of the businesses that had been responsible for almost every medical innovation from which Americans and the world had benefited for decades became intensely controversial in the 1990s. An odd inversion came into play. Since the work they did was life-saving or life-enhancing, it was not deemed by a certain liberal mindset to be of special value, worth the expense. Rather, medical treatment came to be considered a human right to which universal access was required without regard to cost. Because people needed these goods so much, it was unscrupulous or greedy to involve the profit principle in them. What mattered most was equity. Consumers of health care should not have to be subject to market forces.

...Attempts to universalize our system and pay for it with cost controls that could stifle innovation contradict their own goal, which is, presumably, better health. It also embraces the notion that you can get something for nothing—namely, that you can get innovative new discoveries and better health outcomes somehow without paying for these discoveries to come into being.

We forget the power of the single-celled organism. For most of man's existence on earth, the power of a single-celled animal to snuff out life was an accepted—and tragic—way of the world. Human beings could be wiped out in vast communicable plagues or simple through ingesting food or water. In the last century, the advent of the antibiotic has changed all that. For millennia, the only cure for an infection in humans was hope. Today, antibiotic use is so common that public health officials struggle to get people not to overuse antibiotics and thereby diminish their effectiveness.

There a reason that the US is the center of medical innovation in the world (see note #10), rather than the socialized medical systems of Canada and Europe. Hence, patients in those countries rely on advances developed in the US for new life-saving drugs and technology.

If the US moves towards a European-style health system, then there will be no other country to provide Americans with the current level of innovation that we now enjoy. Is that what we want?