John Lewis Dissects HR3200

Professor John Lewis of Duke University has just posted his analysis of HR3200, the proposed Congressional health care "reform" bill.

Dr. Lewis has graciously given me permission to repost it here.

The original is available here at, "The Health Care Bill: What HR 3200, 'America's Affordable Health Choices Act of 2009,' Says":

The Health Care Bill: What HR 3200, ‘‘America’s Affordable Health Choices Act of 2009,” Says

John David Lewis

August 6, 2009

What does the bill, HR 3200, short-titled ‘‘America’s Affordable Health Choices Act of 2009,” actually say about major health care issues? I here pose a few questions in no particular order, citing relevant passages and offering a brief evaluation after each set of passages.

This bill is 1017 pages long. It is knee-deep in legalese and references to other federal regulations and laws. I have only touched pieces of the bill here. For instance, I have not considered the establishment of (1) “Health Choices Commissio0ner” (Section 141); (2) a “Health Insurance Exchange,” (Section 201), basically a government run insurance scheme to coordinate all insurance activity; (3) a Public Health Insurance Option (Section 221); and similar provisions.

This is the evaluation of someone who is neither a physician nor a legal professional. I am citizen, concerned about this bill’s effects on my freedom as an American. I would rather have used my time in other ways—but this is too important to ignore.

We may answer one question up front: How will the government will pay for all this? Higher taxes, more borrowing, printing money, cutting payments, or rationing services—there are no other options. We will all pay for this, enrolled in the government “option” or not.

(All bold type within the text of the bill is added for emphasis.)

1. 1. WILL THE PLAN RATION MEDICAL CARE?

This is what the bill says, pages 284-288, SEC. 1151. REDUCING POTENTIALLY PREVENTABLE HOSPITAL READMISSIONS:

‘(ii) EXCLUSION OF CERTAIN READMISSIONS.—For purposes of clause (i), with respect to a hospital, excess readmissions shall not include readmissions for an applicable condition for which there are fewer than a minimum number (as determined by the Secretary) of discharges for such applicable condition for the applicable period and such hospital.

and, under “Definitions”:

‘‘(A) APPLICABLE CONDITION.—The term ‘applicable condition’ means, subject to subparagraph (B), a condition or procedure selected by the Secretary . . .

and:

‘‘(E) READMISSION.—The term ‘readmission’ means, in the case of an individual who is discharged from an applicable hospital, the admission of the individual to the same or another applicable hospital within a time period specified by the Secretary from the date of such discharge.

and:

‘‘(6) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review under section 1869, section 1878, or otherwise of— . . .

‘‘(C) the measures of readmissions . . .

EVALUATION OF THE PASSAGES:

1. This section amends the Social Security Act

2. The government has the power to determine what constitutes an “applicable [medical] condition.”

3. The government has the power to determine who is allowed readmission into a hospital.

4. This determination will be made by statistics: when enough people have been discharged for the same condition, an individual may be readmitted.

5. This is government rationing, pure, simple, and straight up.

6. There can be no judicial review of decisions made here. The Secretary is above the courts.

7. The plan also allows the government to prohibit hospitals from expanding without federal permission: page 317-318.

2. Will the plan punish Americans who try to opt out?

What the bill says, pages 167-168, section 401, TAX ON INDIVIDUALS WITHOUT ACCEPTABLE HEALTH CARE COVERAGE:

‘‘(a) TAX IMPOSED.—In the case of any individual who does not meet the requirements of subsection (d) at any time during the taxable year, there is hereby imposed a tax equal to 2.5 percent of the excess of—

(1) the taxpayer’s modified adjusted gross income for the taxable year, over

(2) the amount of gross income specified in section 6012(a)(1) with respect to the taxpayer. . . .”

EVALUATION OF THE PASSAGE:

1. This section amends the Internal Revenue Code.

2. Anyone caught without acceptable coverage and not in the government plan will pay a special tax.

3. The IRS will be a major enforcement mechanism for the plan.

3. what constitutes “acceptable” coverage?

Here is what the bill says, pages 26-30, SEC. 122, ESSENTIAL BENEFITS PACKAGE DEFINED:

(a) IN GENERAL.—In this division, the term ‘‘essential benefits package’’ means health benefits coverage, consistent with standards adopted under section 124 to ensure the provision of quality health care and financial security . . .

(b) MINIMUM SERVICES TO BE COVERED.—The items and services described in this subsection are the following:

(1) Hospitalization.

(2) Outpatient hospital and outpatient clinic services . . .

(3) Professional services of physicians and other health professionals.

(4) Such services, equipment, and supplies incident to the services of a physician’s or a health professional’s delivery of care . . .

(5) Prescription drugs.

(6) Rehabilitative and habilitative services.

(7) Mental health and substance use disorder services.

(8) Preventive services . . .

(9) Maternity care.

(10) Well baby and well child care . . .

(c) REQUIREMENTS RELATING TO COST-SHARING AND MINIMUM ACTUARIAL VALUE . . .

(3) MINIMUM ACTUARIAL VALUE.—

(A) IN GENERAL.—The cost-sharing under the essential benefits package shall be designed to provide a level of coverage that is designed to provide benefits that are actuarially equivalent to approximately 70 percent of the full actuarial value of the benefits provided under the reference benefits package described in subparagraph (B).

EVALUATION OF THE PASSAGES:

1. The bill defines “acceptable coverage” and leaves no room for choice in this regard.

2. By setting a minimum 70% actuarial value of benefits, the bill makes health plans in which individuals pay for routine services, but carry insurance only for catastrophic events, (such as Health Savings Accounts) illegal.

4. Will the PLAN destroy private health insurance?

Here is what it requires, for businesses with payrolls greater than $400,000 per year. (The bill uses “contribution” to refer to mandatory payments to the government plan.) Pages 149-150, SEC. 313, EMPLOYER CONTRIBUTIONS IN LIEU OF COVERAGE

(a) IN GENERAL.—A contribution is made in accordance with this section with respect to an employee if such contribution is equal to an amount equal to 8 percent of the average wages paid by the employer during the period of enrollment (determined by taking into account all employees of the employer and in such manner as the Commissioner provides, including rules providing for the appropriate aggregation of related employers). Any such contribution—

(1) shall be paid to the Health Choices Commissioner for deposit into the Health Insurance Exchange Trust Fund, and

(2) shall not be applied against the premium of the employee under the Exchange-participating health benefits plan in which the employee is enrolled.

(The bill then includes a sliding scale of payments for business with less than $400,000 in annual payroll.)

The Bill also reserves, for the government, the power to determine an acceptable benefits plan: page 24, SEC. 115. ENSURING ADEQUACY OF PROVIDER NETWORKS.

5 (a) IN GENERAL.—A qualified health benefits plan that uses a provider network for items and services shall meet such standards respecting provider networks as the Commissioner may establish to assure the adequacy of such networks in ensuring enrollee access to such items and services and transparency in the cost-sharing differentials between in-network coverage and out-of-network coverage.

EVALUATION OF THE PASSAGES:

1. The bill does not prohibit a person from buying private insurance.

2. Small businesses—with say 8-10 employees—will either have to provide insurance to federal standards, or pay an 8% payroll tax. Business costs for health care are higher than this, especially considering administrative costs. Any competitive business that tries to stay with a private plan will face a payroll disadvantage against competitors who go with the government “option.”

3. The pressure for business owners to terminate the private plans will be enormous.

4. With employers ending plans, millions of Americans will lose their private coverage, and fewer companies will offer it.

5. The Commissioner (meaning, always, the bureaucrats) will determine whether a particular network of physicians, hospitals and insurance is acceptable.

6. With private insurance starved, many people enrolled in the government “option” will have no place else to go.

5. Does the plan TAX successful Americans more THAN OTHERS?

Here is what the bill says, pages 197-198, SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS

‘‘SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

‘‘(a) GENERAL RULE.—In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to—

‘‘(1) 1 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $350,000 but does not exceed $500,000,

‘‘(2) 1.5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $500,000 but does not exceed $1,000,000, and

‘‘(3) 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000.

EVALUATION OF THE PASSAGE:

1. This bill amends the Internal Revenue Code.

2. Tax surcharges are levied on those with the highest incomes.

3. The plan manipulates the tax code to redistribute their wealth.

4. Successful business owners will bear the highest cost of this plan.

6. 6. Does THE PLAN ALLOW THE GOVERNMENT TO set FEES FOR SERVICES?

What it says, page 124, Sec. 223, PAYMENT RATES FOR ITEMS AND SERVICES:

(d) CONSTRUCTION.—Nothing in this subtitle shall be construed as limiting the Secretary’s authority to correct for payments that are excessive or deficient, taking into account the provisions of section 221(a) and the amounts paid for similar health care providers and services under other Exchange-participating health benefits plans.

(e) CONSTRUCTION.—Nothing in this subtitle shall be construed as affecting the authority of the Secretary to establish payment rates, including payments to provide for the more efficient delivery of services, such as the initiatives provided for under section 224.

EVALUATION OF THE PASSAGES:

1. The government’s authority to set payments is basically unlimited.
2. The official will decide what constitutes “excessive,” “deficient,” and “efficient” payments and services.

7. Will THE PLAN increase the power of government officials to SCRUTINIZE our private affairs?

What it says, pages 195-196, SEC. 431. DISCLOSURES TO CARRY OUT HEALTH INSURANCE EXCHANGE SUBSIDIES.

‘‘(A) IN GENERAL.—The Secretary, upon written request from the Health Choices Commissioner or the head of a State-based health insurance exchange approved for operation under section 208 of the America’s Affordable Health Choices Act of 2009, shall disclose to officers and employees of the Health Choices Administration or such State-based health insurance exchange, as the case may be, return information of any taxpayer whose income is relevant in determining any affordability credit described in subtitle C of title II of the America’s Affordable Health Choices Act of 2009. Such return information shall be limited to—

‘‘(i) taxpayer identity information with respect to such taxpayer,

‘‘(ii) the filing status of such taxpayer,

‘‘(iii) the modified adjusted gross income of such taxpayer (as defined in section 59B(e)(5)),

‘‘(iv) the number of dependents of the taxpayer,

‘‘(v) such other information as is prescribed by the Secretary by regulation as might indicate whether the taxpayer is eligible for such affordability credits (and the amount thereof), and

‘‘(vi) the taxable year with respect to which the preceding information relates or, if applicable, the fact that such information is not available.

And, page 145, section 312, EMPLOYER RESPONSIBILITY TO CONTRIBUTE TOWARDS EMPLOYEE AND DEPENDENT COVERAGE:

(3) PROVISION OF INFORMATION.—The employer provides the Health Choices Commissioner, the Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury, as applicable, with such information as the Commissioner may require to ascertain compliance with the requirements of this section.

EVALUATION OF THE PASSAGE:

1. This section amends the Internal Revenue Code

2. The bill opens up income tax return information to federal officials.

3. Any stated “limits” to such information are circumvented by item (v), which allows federal officials to decide what information is needed.

4. Employers are required to report whatever information the government says it needs to enforce the plan.

8. 8. Does the plan automatically enroll Americans in the GOVERNMENT plan?

What it says, page 102, Section 205, Outreach and enrollment of Exchange-eligible individuals and employers in Exchange-participating health benefits plan:

(3) AUTOMATIC ENROLLMENT OF MEDICAID ELIGIBLE INDIVIDUALS INTO MEDICAID.—The Commissioner shall provide for a process under which an individual who is described in section 202(d)(3) and has not elected to enroll in an Exchange-participating health benefits plan is automatically enrolled under Medicaid.

And, page 145, section 312:

(4) AUTOENROLLMENT OF EMPLOYEES.—The employer provides for autoenrollment of the employee in accordance with subsection (c).

EVALUATION OF THE PASSAGES:

1. Do nothing and you are in.

2. Employers are responsible for automatically enrolling people who still work.

9. 9. Does THE PLAN exempt federal OFFICIALS from COURT REVIEW?

What it says, page 124, Section 223, PAYMENT RATES FOR ITEMS AND SERVICES:

(f) LIMITATIONS ON REVIEW.—There shall be no administrative or judicial review of a payment rate or methodology established under this section or under section 224.

And, page 256, SEC. 1123. PAYMENTS FOR EFFICIENT AREAS.

‘‘(C) LIMITATION ON REVIEW.—There shall be no administrative or judicial review under section 1869, 1878, or otherwise, respecting—

‘‘(i) the identification of a county or other area under subparagraph (A); or

‘‘(ii) the assignment of a postal ZIP Code to a county or other area under subparagraph (B).

EVALUATION OF THE PASSAGES:

1. Sec. 1123 amends the Social Security Act, to allow the Secretary to identify areas of the country that underutilize the government’s plan “based on per capita spending.”

2. Parts of the plan are set above the review of the courts.

Reynolds: Remember when protest was patriotic?

In the August 8, 2009 DC Examiner, Glenn Reynolds asks, "Remember when protest was patriotic?"

Here's an extended excerpt:

Remember when protest was patriotic?

"Protest is patriotic!" "Dissent is the highest form of patriotism!"

These battle-cries were heard often, in a simpler America of long ago -- that is, before last November. Back then, protests -- even if they were organized by the usual leftist apparatchik-groups like ANSWER or ACORN -- were seen - at least in the media - as proof of popular discontent.

When handfuls of Code Pink ladies disrupted congressional hearings or speeches by Bush administration officials, it was taken as evidence that the administration's policies were unpopular, and that the thinking parts of the populace were rising up in true democratic fashion.

Even disruptive tactics aimed at blocking President Bush's Social Security reform program were merely seen as evidence of boisterous high spirits and robust, wide-open debate. On May 23, 2005, the Savannah Morning News reported:

By now, Jack Kingston is used to shouted questions, interruptions and boos. Republican congressmen expect such responses these days when they meet with constituents about President Bush's proposal to overhaul Social Security.

Tinkering with the system is always controversial. To make Bush's plan even more so -- political foes are sending people to Social Security forums armed with hostile questions.

By now, Kingston, a Savannah lawmaker and part of the GOP House leadership, has held 10 such sessions and plans at least seven more.

On March 16, USA Today reported that Pennsylvania Sen. Rick Santorum "was among dozens of members of Congress who ran gantlets of demonstrators and shouted over hecklers at Social Security events last month. Many who showed up to protest were alerted by e-mails and bused in by anti-Bush organizations such as MoveOn.org and USAction, a liberal advocacy group. They came with prepared questions and instructions on how to confront lawmakers."

This was just good, boisterous politics: "Robust, wide-open debate."

But when it happens to Democrats, it's something different: A threat to democracy, a sign of incipient fascism, and an opportunity to set up a (possibly illegal) White House "snitch line" where people are encouraged to report "fishy" statements to the authorities.

House Speaker Nancy Pelosi calls the "Tea Party" protesters Nazis, New York Times columnist Paul Krugman --forgetting the events above -- claims that left-leaning groups never engaged in disruptive tactics against Social Security reform, and various other administration-supporting pundits are trying to spin the whole thing as a deadly move toward "mob rule" and – somewhat contradictorily -- as a phony "astroturf" movement.

Remember: When lefties do it, it's called "community organizing." When conservatives and libertarians do it, it's "astroturf."

But some people are noticing the truth. As Mickey Kaus notes, "If an 'astroturfing' campaign gets real people to show up at events stating their real views, isn't it ... community organizing?" Why yes, yes it is.

As someone who's been following the Tea Party campaign since the beginning, it seems to me to be the most genuine outbreak of grassroots popular involvement in my lifetime. People have been turning out, in the tens of thousands at times, because they feel that Obama pulled a bait-and-switch and is moving the country much farther to the left than he promised during the campaign.

More significantly, most of these people are turning out to protest for the first time in their lives, and they're planning for future political involvement in years to come. Perhaps that's what's got the critics worried.

It's true, of course, that conservative and libertarian organizations -- ranging from former House Speaker Newt Gingrich's American Solutions to FreedomWorks and Americans for Prosperity -- are getting involved and providing advice and support, just as numerous lefty groups have always done with left-leaning movements.

But, as I noted in an April 15 column in The Wall Street Journal, those groups were playing catch-up to a movement that was already rolling on its own...

I don't know how the specific legislative battle over health care will turn out. But I do know that the issue has galvanized Americans who are rightly concerned about protecting their health, their individual rights, and their lives.

And lawmakers of both political parties need to know that.

As long as Americans are willing to fight for these things in a principled fashion, then there's always hope...

Longmont Health Care Rally

Ari Armstrong of FreeColorado.com has some video footage from the August 6, 2009 Longmont, CO "Hands of My Health Care" rally:



For more commentary and video, please see his full report.

I especially liked Ari's observation:

Congressman Ed Perlmutter told the Denver Post about tense Town Hall meetings, "They gin up this conflict and in some ways thuggery to try and stop stuff."

In other words, at a Town Hall meeting, where politicians invite people to come and speak, politicians expect people to shut up and take it.

According to Congressman Perlmutter, forcibly confiscating people's money is not "thuggery." Forcing some people to subsidize others through a maze of insurance controls and mandates is not "thuggery." Dictating to doctors how they shall provide health care, to patients how they shall receive it, and to insurers how they shall insure it, is not "thuggery."

But complaining about it, that is "thuggery." Speaking up is "thuggery." Saying "no" to Big Brother is "thuggery." Daring to exercise the First Amendment is "thuggery." According to Congressman Perlmutter.

Lying With Statistics

Stuart Browning again debunks the myth that a single-payer system would save money on administrative costs:

One of the linchpin arguments of government-run health care advocates is that the government can run an insurance program more efficiently and with much lower administrative costs than the private sector. According to them, Medicare overhead is approximately 3% while private insurers have 12% (or 20% or 31% depending on who is talking) in administrative costs.

The argument is complete rubbish...

(Read the rest of "Lying With Statistics".)

Like in the undead creatures in old monster movies, this myth keeps cropping up no matter how many times it's refuted. Fortunately, folks like Browning are ready to keep up the fight for the truth.

Top Ten Reasons to Avoid the Massachusetts Model for Health Care

The Boston Herald website includes this short discussion, "Top Ten Reasons to Avoid the Massachusetts Model for Health Care".

Their points include:

1. Health insurance rates for small businesses and micro-businesses have increased by 50% in two years.

2. Massachusetts failed to enact any limits on trail attorneys, driving malpractice premiums higher, especially in high risk specialties like ob-gyn and surgery.

3. The number of individuals with taxpayer subsidized plans is growing year after year due to the ever increasing costs of health insurance.

4. Mandated coverage has not reduced the number of emergency room visits as predicted.

5. As the state keeps mandating more coverage by statute and regulation, individuals and businesses have very little flexibility in choice of health plans, and insurers have less choice in design of health plans.

6. The Massachusetts plan requires insurance companies to do more paperwork so that individuals can prove health insurance coverage on their taxes in order to avoid the fine.

7. The health insurance program is becoming a budget buster for the state.

8. The promise of lower insurance premiums as the number of uninsured declines is not true. As the insured population grows, so does the demand for medical services.

9. The Commonwealth is experiencing a growing shortage of primary care physicians as the newly insured (mostly on taxpayer subsidized plans) look for doctors.

10. The Massachusetts plan did nothing to address the problem of making health insurance more affordable other than providing a government option.

At the level of economic analysis, the points they make are important and good.

For additional thoughts on the dangers of the Massachusetts model, please see my article from The Objective Standard, "Mandatory Health Insurance: Wrong For Massachusetts, Wrong For America".

(Link via SK.)

New Name, Same Old "Public Plan"

The so-called "public plan" is not dead yet.

Politicians have merely changed its name, as Michael Tanner explains in his piece in the July 30, 2009 New York Post. Referring to the Senate "compromise" proposal, he writes:

...[I]nstead of a government-run "public option," it would set up a nationwide health-insurance co-op.

Now, if this was really going to be a co-op like rural electrical co-ops or your local health-food store -- owned and controlled by its workers and the people who use its services -- it would be a meaningless but harmless diversion. America already has some 1,300 insurance companies, so it's hard to see what one more would add, but it would be unlikely to do much harm.

But these aren't true co-ops. The members wouldn't choose its officers -- the president would. Plus, the secretary of Health and Human Services would have to approve its business plan, and thus could force it to offer whatever benefits, premiums and reimbursement schedules Washington wants. Finally, the federal government would provide start up, and possibly ongoing, subsidies.

A "co-op" run by the federal government, under rules imposed by the federal government and with federal funding is simply government-run health insurance by another name.

Or, as Senate Majority Leader Harry Reid put it, "We're going to have some type of public option, call it 'co-op,' call it what you want."

(Full text of "Senate Deal: Change A Few Names").

Rebranding a bad ideas under a different name is an old politicians' trick. Will Americans see through this charade?

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".