Free Markets, Free People
We need to face a few facts about health care reform. Our current system of health care funding is broken. It’s not broken because we have a free market in health care. It’s broken because we don’t.
Spending in the US health care system is essentially out of control. The US spends almost 16% of GDP on health care. Canada, our nearest neighbor, spends a bit more than 10%. In western Europe, the figure is generally between 7% and 9% of GDP. It’s something I addressed in my book a few years ago:
Why is spending so much higher in the US, with its supposedly free-market system? Why is it, with all that spending, that regular medical coverage doesn’t exist for 40 million Americans, when, in the rest of the industrialized world, there is 100% health coverage?
Something is deeply wrong with the financing of the US health-care system.
Part of the problem is that we really don’t have a free market in health care. Individuals, by and large, don’t buy health care policies. Health insurance is employer-provided. In effect, however, this is underwritten by the US government by making health care premiums deductible for businesses, which results in billions of dollars in lost tax revenues. And then, of course, you have to throw in the $300 billion or so that the state and federal governments spend outright to provide health care. And, of course, once you hit 65, you’re on the government’s health care gravy train, because you’ve got your Medicare, which also covers prescription drugs, now.
Why do we spend too much for health care in the US? The Heartland Institute, a public policy think-tank, has listed several reasons:
1) Government subsidies to health care increases demand by artificially lowering costs.
2) Favorable tax treatment of employer-provided health care has the same effect.
3) Lower-income people without health care must rely on emergency room health care delivery at substantially higher cost.
4) Health care buyers and sellers meet in a “market” that is heavily regulated by the government.
5) State governments increase health care costs by mandating benefit coverages.
6) State governments artificially reduce the supply of health care by requiring Certificates of Need before health care providers can expand services.
7) States interfere with the creation and operation of PPOs by fixing prices or the range of services they can offer.
So, really, we have what is, in many ways, the worst of both worlds. We have a market-based system, but one in which market incentives are minimized through regulation and subsidies. In effect, government policy bids up health care prices, while at the same time interfering with the market forces that keep a lid on prices.
It’s no wonder that more and more people are looking at single-payer, government-provided health care as an alternative to what we already have. At the very least, a single payer system would end the inefficient and fragmented ways by which health care is currently purchased.
This is not a situation we can afford to ignore for long.
We have ignored it, though–although that appears to have come to a screeching halt.
Because of various government intereferences, more than 1/3 of all health care spending is purely administrative. By contrast, Canada’s administrative burden on health care funding is about 1%. If we were to switch over to a single payer system, there is an excellent chance that we would, in fact, spend less money on health care than we currently do.
Are there horror stories about health care in Canada or the UK? Sure. There are horror stories about our system, too. For instance, you can find stories of families that were denied coverage, and were forced in to financial disaster all the time.
Canada, of course, has the rather unique problem of being a country with 1/10 of our population being spread over an equal amount of real estate. In that situation, if you don’t live near a major metropolitan center–and Canada only has about 10 of them, there’s a shortage of available services. In Britain, there are terrible NHS hospitals, but there are also excellent ones. But the same it true in the US. If you live in, say, Houston, Ben Taub Hospital probably wouldn’t be your first choice for treatment. M.D. Anderson, however, would.
The bottom line, however, is that a single payer system would, in fact, deliver an equal or better level of health care as we currently receive, and probably do so at a lower cost.
But there is a fundamental problem with our current debate. We are arguing over whether we should keep the system we have, or move to a system that sets us on the path to a single-payer system. But those aren’t the only alternatives. There is another option that is being lost in this debate. The democrats don’t want to mention it for ideological reasons. The Republicans don’t mention it because of…well…incompetent buffoonery, I guess.
The alternative, of course, is to make the case that our current system costs so much, and is so distorted, because of government interference. We have a mixed system of health care funding in which the government’s intervention imposes a wide range of unnecessary costs. So our choice is not to keep what we have, or eliminate the administrative overhead by turning it all over to the government. The third choice is to return to a free market in health care.
Eliminate state by state coverage mandates, which result in 50 different–and sometimes wildly so–regulatory regimes. Eliminate federal and state laws that prevent insurers from creating nationwide plans and risk pools. Eliminate employer health-care coverage, and personalize it, to make it personal and portable.
Here’s another idea: allow people to buy health insurance. That isn’t what we have now. We have pre-paid health care. The two things are wildly different. For example, look at how auto insurance works. Imagine how much your car insurance would cost if we expected our insurance to cover 80% of the cost of oil changes, tire rotation, wiper blades, new tires, regular service, etc. But that’s precisely what we expect medical insurance to do. And then we wonder why it costs so darn much.
We need to allow insurers to offer simple catastrophic care coverage, with varying deductibles. That way, you can pick up the tab for your own doctor’s visits, but you don’t have to worry about bankrupting yourself if some idiot runs a stop sign and knocks you off of your motorcycle. We need to allow anyone who wants to set up a medical savings account. Heck, if we really want “the government” to finance it, we could offer a 100% tax credit for health care expenditures.
We don’t need the government to rescue us from the unsatisfactory state health care is in. We can accomplish the same goals of universal coverage and lower cost, by getting the government out of health care as completely as possible. There are so many ways we could use free markets to relieve us of the distress the current system of funding is in, that they’re almost impossible to enumerate.
And best of all, doing so would comport with the country’s traditions of freedom, and individual choice.
And one final thing. With a real free market in health care, if there’s a problem, you’ll also get accountability. You’ll get access to courts where you can sue a private insurer who defrauds you, or someone who gives you substandard care. What you’ll get with a single-payer system is no recourse. If the government turns down your procedure, or you don’t get the health care you should, or if you keel over before your slot on the waiting list comes up, there’ll be nowhere to go, and no one accountable, any more than there is now if the public schools fail to adequately educate your children.
But free market reform doesn’t even seem to be on the table.
Are Democrat lawmakers really this disconnected and clueless?
First Rep. James Clyburn, D-SC likens townhall protesters to – yup, you guessed it – racists. Not just your generic, everyday racists, however. Instead, we’re talking Bull Conner, Deep South, red-neck, Klansman-type racists:
“I have seen this kind of hate before. I have seen this discussion before,” he said. “I have seen snarling dogs going after people who were trying to peacefully assemble. I have seen the eyes of people who were being spat upon.”
“This is all about activity trying to deny the establishment of a civil right. And I do believe that health care for all is — a civil right,” the House Majority Whip argued. “And I think that is why you see this kind of activity. This is an attempt on the part of some to deny the establishment of a civil right.”
Look at how hard he had to work to tar people who honestly and passionately disagree with his party’s proposed legislation on health care.
This is like watching a huge temper tantrum thrown by spoiled kids. Democratic lawmakers don’t see, hear or get what they want and they lash out at those who deny them with the most hateful rhetoric they can muster. In Clyburn’s case the most hateful image he can muster is comparing citizens who have nothing more than a political disagreement to Bull Conner.
Not to be outdone we have Sen. Harry Reid (D-BS), the Senate’s male version of Nancy Pelosi, uttering this unique characterization of the old folks and veterans in opposition to his agenda:
Town hall protesters are “evil-mongers,” says Senate Majority Leader Harry Reid (D-Nev.)
Reid coined the term in a speech to an energy conference in Las Vegas this week and repeated it in an interview with Politics Daily.
Such “evil-mongers” are using “lies, innuendo and rumor,” to drown out rational debate, Reid said.
“It was an original with me,” Reid said of the term. “I maybe could have been less descriptive,” he said, adding that “I doubt you’ll hear it from me again.”
Nevertheless, Reid worked in the word one more time during the interview.
Reid, of course, is a pathetic example of what we’re stuck with in terms of political leaders and another example of why seniority is a terrible system for picking leadership. I mean, for heaven sake, the man brags about coining a term to describe his constituents who disagree with him – “evil-mongers”.
“Evil-mongers”. It’s not even very good, for heaven sake, but witless Harry is proud of it.
This is what you get, apparently, when you cross our “civil” Democratic leadership (you know, the same one’s whining about the “uncivil” protesters?) – hateful comparisons with no basis and newly coined words designed to denigrate American citizens.
Thanks a bunch, guys. And may you enjoy many more years of the free speech you would deny others. Because you guys obviously know exactly what to do with that right, don’t you?
So, based on some comments throughout the day, I’ve made a revision to the site again. What I see on my monitor is now red, dark blue, white, and taupe. I don’t see the “olive green” any more. If you still see olive green on your monitor, let me know, so that I can do some re-shading.
As far as the column widths go, the main content area is 1000 pixels wide. A variable width template doesn’t work out for everyone. Sorry, but that was one of the complaints with the old template, so If you use a really wide screen at 1900px wide, then this is something you’re gonna just have to deal with.
For everyone else, 1000px seems like a good compromise, although I can go wider. I just don’t want to make people who are still using 1024×768 to have to scroll horizontally to see the whole page.
What do you think? This is an official U.S. Government Web site managed by the U.S. Department of Health & Human Services. The purpose of this particular page is obviously purely political:
Dear Mr. President,
We strongly support your commitment to comprehensive health reform.
This is not a luxury. The continuing, sharp escalation of health care costs for families, businesses, and government is unsustainable. Reform is imperative.
We believe that health reform must be enacted this year.
Reform is needed to help America’s families struggling with rising costs and those who are losing their insurance. At the same time, real health reform is crucial to keeping American businesses competitive in the world economy and for the country’s long-term economic viability. As our country faces economic challenges, the time for reform is now.
We support health reform that follows these principles:
* Protect families’ financial health
* Assure affordable, quality health coverage for all Americans
* Provide portability of coverage
* Guarantee choice of doctors
* Invest in prevention and wellness
* Improve patient safety and quality of care
* End barriers to coverage for people with pre-existing medical conditions
* Reduce long-term growth of health costs for businesses and government
During these extraordinarily challenging times, we need to put aside past differences and address the health and economic crisis. Our shared interest must come before narrow interests so we can achieve a health system that is affordable and provides high quality for all Americans. We will support your budget with its reserve fund dedicated to achieving health care reform in a fiscally responsible manner. Each of us must be prepared to contribute to achieving this fundamental goal.
By signing this statement we affirm our commitment to work with you and our Congressional leaders to enact legislation this year which provides affordable, high quality coverage for all American
Is that what official government websites are for – ginning up petitions to support pending legislation that support a president’s political agenda?
I don’ t think so.
We warned people back during the election that anyone who disagreed with Pres. Obama would be labeled a racist. To say that prediction that has come to fruition is like calling Katrina a summer shower.
Since the August recess began, and vociferous protesters crowded local townhall meetings, the chorus of “racism!” has steadily grown amongst the left. Those opposed to ObamaCare and “health insurance reform” are derisively dismissed as having no other issue than “a black man in the White House.” These accusations are somehow borne out by the fact that swastikas and comparisons of Obama to Hitler have allegedly been spotted at the townhall protests. Nevermind that similar health
care insurance reform was vigorously opposed when presented by a popular white president in the 90′s, or that comparisons of our last president to Hitler were (and still are) quite common, yet no racism was ever alleged there. Further ignore that accusing someone of being a Nazi would seem to indicate that one is opposed to racism, and that the people actually carrying such signs were Democrat-supporting, LaRouche adherents who oppose ObamaCare because it doesn’t go far enough. Indeed you must ignore these facts because otherwise the charges of racism make absolutely no sense.
Now, we can prattle on all day about how the left’s eagerness to drive the racist route simply exposes the vapidity of their arguments, but while that is true it does not even begin to address the real problem — i.e. just how vacuously stupid the left has become.
When I say “stupid” I don’t mean “incapable of intellectual rigor” but instead “uneducated, ill-informed and either unwilling or unable to change that state of being.”
Just by way of example, Rep. David Scott, whose arrogance and indifference towards his constituents was highlighted by Bruce, declared that racism is at the source of the anti-ObamaCare demonstrations and questioning:
“There is bubbling up under this debate, unfortunately, the overtones that this presents of hate, of racism, of all of these things,” Scott added.
Scott laid blame for the harsh tone of the August debate at the feet of talk radio show Rush Limbaugh and Sen. Jim DeMint (R-S.C.), who he accused of mobilizing the angry base now manifesting itself at town hall meetings.
Scott was responding to questions after a swastika was painted on his office door, which in the confused leftist mind means that the vandal was a racist. Again, cognitive dissonance must be ignored since the protesters were also accused of being racist for comparing Obama to Hitler. To the lefty supporters of ObamaCare, any and all dissent is racist. Period.
One can go to almost any comment section of any article discussing the townhalls and find assured accusations of racism emanating from lefty posters as if we were all maddeningly blind not to be aware of this fact. For example:
Either Sen. McCaskill is naive or pandering to the CRAZIES in her state. She might as well join the crazies or be an independent. 1st she defends people who are bringing Nazi paraphernalia to town halls and now she’s blatantly dismissing what the whole country knows and believes to be the reason behind this whole movement: BLACK MAN IN THE WHITEHOUSE. These people will oppose everything Obama brings up or stands for even if he was saving their children from a burning house; this didn’t start because of the healthcare debate, it started during the campaign and now it has really picked up pace because the president is doing what he promised he would do. Sen. McCaskill can keep her mouth shut if she doesn’t have the guts to tell it like it is.
That comment was in response to article about Sen. McCaskill (D-MO) taking Scott to task for crying racism. Notice how incredibly assured the commenter is that people “bringing Nazi paraphernalia to town halls” is undeniable evidence of “what the whole country knows and believes to be the reason behind this whole movement: BLACK MAN IN THE WHITEHOUSE.” This, in a word, is stupid.
However, explaining why this is so stupid to ObamaCare’s supporters is rather like trying to explain the physics of a hairball to a cat. You will just get annoyed and the cat will still ignore you while emitting guttural hacking and wheezing noises that may or may not sound vaguely like words — “hhhcccccKKKK! ackkk! hehhhhehhk … RACIST!”. And this is the problem.
How do you have a civilized debate with someone who is entirely incapable of hearing and/or understanding anything you have to say? For whatever reason (I’ve honestly ceased to care), the leftist side of any debate consists of equal parts righteous moralizing, demonization of their opponents, progressive conventional wisdom dressed up as facts, and cries of racism. Of course, this is all held together by a healthy dose “magical thinking” (R: “Centrally planned economies have never worked anywhere, anytime.” L:”But it will this time!”), which makes for quite a noxious brew good for little more than poisoning rational thought.
It is in this context that legitimate anger at legislators trying to rush through a massive health care bill, that few if any have read, while spending money faster than it can be printed, can be laid at the feet of racism without suffering a massive aneurysm. Not that the opponents of Obamacare should back down or stop strongly and pointedly questioning their representatives. Despite these exhibitions of sheer stupidity from the left, politicians do understand threats to their retention of power.
Instead, I suggest that the next time someone accuses you of being a racist for not supporting whatever agenda Obama and his acolytes want to achieve, you stop what you’re doing, look them square in the eyes, and say “Your mind-numbing stupidity is the source of all the racism here” and then move on.
Perhaps the fog of inane and muddled thinking will be lifted from your denigrator’s progressive mind by your mental slap (Lord knows reasonable arguments have not done so), and she will see that racism is not a charge to be thrown around lightly or haphazardly. If so, then a real discussion might be had about why spending gobs and gobs of money we don’t have to save money makes no sense. Or that piling more government control onto a system that’s already broken because of government control is an exercise in insanity. Just maybe, in some small way, you will have steered an otherwise viable intellect back towards the land of reason.
In all likelihood, however, she will just ignore you and walk away in a huff while emitting guttural hacking and wheezing noises that may or may not sound vaguely like words — “hhhcccccKKKK! ackkk! hehhhhehhk … RACIST!”.
You may recall from Obama’s health care
pep rally townhall where he claimed that those in opposition to his healthcare plan were spreading disinformation and fear. But he also talked about doctors being more inclined to cut off a diabetic’s foot than treat him because they would make more doing the amputation than with preventive care. The claim, of course, is Obama’s plan would discourage that.
All I’m saying is let’s take the example of something like diabetes, one of — a disease that’s skyrocketing, partly because of obesity, partly because it’s not treated as effectively as it could be. Right now if we paid a family — if a family care physician works with his or her patient to help them lose weight, modify diet, monitors whether they’re taking their medications in a timely fashion, they might get reimbursed a pittance. But if that same diabetic ends up getting their foot amputated, that’s $30,000, $40,000, $50,000 — immediately the surgeon is reimbursed. Well, why not make sure that we’re also reimbursing the care that prevents the amputation, right? That will save us money.
The American College of Surgeons responds (something Marc Ambinder finds to be “amusing”):
The American College of Surgeons is deeply disturbed over the uninformed public comments President Obama continues to make about the high-quality care provided by surgeons in the United States. When the President makes statements that are incorrect or not based in fact, we think he does a disservice to the American people at a time when they want clear, understandable facts about health care reform. We want to set the record straight.
– Yesterday during a town hall meeting, President Obama got his facts
completely wrong. He stated that a surgeon gets paid $50,000 for a leg
amputation when, in fact, Medicare pays a surgeon between $740 and
$1,140 for a leg amputation. This payment also includes the
evaluation of the patient on the day of the operation plus patient
follow-up care that is provided for 90 days after the operation.
Private insurers pay some variation of the Medicare reimbursement for
– Three weeks ago, the President suggested that a surgeon’s decision to
remove a child’s tonsils is based on the desire to make a lot of
money. That remark was ill-informed and dangerous, and we were
dismayed by this characterization of the work surgeons do. Surgeons
make decisions about recommending operations based on what’s right for
We agree with the President that the best thing for patients with diabetes is to manage the disease proactively to avoid the bad consequences that can occur, including blindness, stroke, and amputation. But as is the case for a person who has been treated for cancer and still needs to have a tumor removed, or a person who is in a terrible car crash and needs access to a trauma surgeon, there are times when even a perfectly managed diabetic patient needs a surgeon. The President’s remarks are truly alarming and run the risk of damaging the all-important trust between surgeons and their patients.
Who again is out there “spreading fear?”
Hope and change.
More polling to consider from a Politico article:
“Seniors are one of the most attentive and engaged constituencies, especially on health care issues, and we’ve seen that in the Medicare Advantage programs,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.
A July 31 Gallup Poll found that just 20 percent of Americans aged 65 and older believe health care reform would improve their own situation, noticeably lower than the 27 percent of 18- to 49-year olds and 26 percent of 50-to-64-year-olds who say the same.
The senior citizen problem could pose a serious problem for the 2010 election cycle.
Older Americans turn out in much higher numbers than other age groups during midterm elections. In 2006, the 55-and-older age group still had the highest voting rate of any age group, at 63 percent, even though younger voters turned out in record numbers for a midterm, according to census data. Half of all votes cast in the 2006 midterms were from voters age 50 or older, according to AARP. And one out of four were AARP members.
Of course, one of the ironies the left likes to point to is that seniors are actually saying they don’t want their socialistic, single-payer system changed. I think that’s a very lazy bit of analysis. I would instead suggest that since seniors have no choice about their socialistic, single-payer system (they’re automatically enrolled at age 65) that what the system is has nothing to do with the protest. They had no choice in the matter.
Seniors are a very tuned in group when it comes to health care because they know what they have is all they can have and the government is talking about legislation to cut that. And one of the areas targeted is the private insurance that covers the gaps Medicare doesn’t cover:
But Obama is talking about finding hundreds of billions in savings from Medicare — cuts supporters say will trim fat from the program — including slashing $156 billion in subsidies to Medicare Advantage, a privately administered Medicare program.
The cuts will also target the amount health care providers are paid to treat Medicare patients.
One of the dirty little secrets about the cost of private health care that you’ll never hear the Democrats or the Obama administration point out is the tremendous amount of cost shifting that goes on from the private sector to cover the public sector.
For every dollar of health care delivered to a Medicare patient, the government pays, on average, $.94. Medicaid only pays $0.86. However, health care providers are able to squeeze those nasty old private insurance providers for $1.34* for every dollar of health care provided. That’s how badly government has distorted the health care industry. It then has the temerity to scream that the private side is “bankrupting” us. Meanwhile it is the private side that has, for decades, been subsidizing the public side.
But back to seniors. Seniors know you don’t recover or save health care costs from healthy people. Seniors also know that they’re in the group in which most health care dollars are spent. Consequently, any savings, a stated goal of the so-called “reform” is most likely going to come from their part of the health care pie.
The proposed cuts to Medicare Advantage are real, but Democrats are also fighting full-blown myths that have gained traction, attacks claiming that reform would create government “death panels” authorizing euthanasia.
The rhetoric is designed to rattle seniors already nervous about health care
because they pay a higher percentage of their income for health care
than younger Americans and face rising costs on fixed incomes, said Jim Dau, a spokesman for AARP.
“Some are simply trying to derail health care reform by targeting seniors, by scaring them, making them, frankly, more dubious, more nervous,” said Dau.
Dau’s protest simply has no legs. The House legislation targets Medicare and talks about cuts to that system. That’s not something the protesters have made up to “rattle” seniors. Instead, it is something which exists, in writing.
And, as I point out above, if you’re a senior you don’t have to be an MIT grad to understand from where the euphemistic “savings” have to come. From the group where most of the spending occurs – duh?!
“Death-panels” and other nonsense aside, seniors have sniffed out the plan and aren’t happy with it. And, again, if you look at the rooms in which these protests are taking place, there are a tremendous number of grey heads evident.
So, we have independents (below) not happy with this power grab in the health care area and we have seniors obviously not happy. Are Democrats paying attention at all or, like Dau, do they plan to wave it all off as opposition dirty tricks and pretend all will work out for the best after they ram this through?
2010 is looking like a lot more fun than I believed it would be.
[*] Those numbers came from Betsy McCoy, former Lt. Gov of NY, in an interview. McCoy is a Senior Fellow at the Hudson Institute and a patient advocate.
As I tried to point out yesterday, those inside the beltway like Marc Ambinder and Charles Krauthammer, who think these visceral and grassroots displays of anger at elected officials aren’t understood by the American people and will blowback against the protesters are simply wrong. And now polling supports the point. From USA Today/Gallup:
In a survey of 1,000 adults taken Tuesday, 34% say demonstrations at the hometown sessions have made them more sympathetic to the protesters’ views; 21% say they are less sympathetic.
Independents by 2-to-1, 35%-16%, say they are more sympathetic to the protesters now.
The findings are unwelcome news for President Obama and Democratic congressional leaders, who have scrambled to respond to the protests and in some cases even to be heard. From Pennsylvania to Texas, those who oppose plans to overhaul the health care system have asked aggressive questions and staged noisy demonstrations.
That highlighted sentence is the one that should be worrying Democrats. We know that Republicans are going to be mostly sympathetic to the demonstrators. And we know that Democrats are going to mostly condemn the protesters. As we all know, the electoral war is fought in the middle with the winner being the side that attracts the most independents.
The question is, why are independents more sympathetic to protesters now than they were? Usually sympathy is a sign of some level of agreement with those with whom someone sympathizes.
If, as I assert, this is about more than just health care (health care is the excuse to confront the lawmakers but the reason is broader and deeper – profligate spending, more power, more government control) and it is there that the indies are finding common ground with the protesters, 2010 could be a tough election season for Democrats. The poll seems to reinforce my assertion:
A 57% majority of those surveyed, including six in 10 independents, say a major factor behind the protests are concerns that average citizens had well before the meetings took place; 48% say efforts by activists to create organized opposition to the health care bills are a major factor.
If that’s not bad enough, check out the most recent Pew poll:
Of those who had heard at least a little about the meetings, 61% say they think the way people have been protesting is appropriate; 34% say they see the protests as inappropriate.
I don’t know if you’ve noticed the change in how Democratic lawmakers are now characterizing the townhalls, but they’ve gone from calling them a “mob”, “un-American” and likening them to the KKK to saying they are quintessentially American and “important”, “refreshing” and “invigorating”. That last descriptor was used by Nancy Pelosi, I believe, who has completely changed her tune.
But of course, that isn’t defusing the protests (which are continuing to build momentum) nor is it necessarily helping Democratic lawmakers look better (especially when you have the likes of Shelia Jackson Lee showing her concern for what her constituents have to say by taking phone calls while they’re talking to her).
There’s an anger out there and it’s real. And beltway pundits and Democrats had better take off their DC goggles and look reality right in the face. They ignore this at their own risk. They need to understand that “respect” is something to be earned, and “civility” comes afterward. But when lawmakers lie to constituents and wave away their concerns by parroting talking points that their constituents know are baloney, they can expect to be treated rudely and with incivility. Why? Because nothing is more rude than treating those on whom your job depends as annoyances, calling them names and making it obvious that party loyalty means more than the wishes of the constituency. It’s a sure ticket to early retirement.