Obama: Wrong on health care

Posted on March 5, 2009 by Brian Schwartz

Michael Tanner outlines why in a brief piece published in the Baltimore Sun.  Some excerpts:

From what we can determine so far, “Obamacare” will be based on four pillars: 1) mandates, both for employers and individuals; 2) subsidies for the middle class; 3) increased insurance regulation; and 4) a government-run health care plan, like Medicare, that will compete with private insurance. The result will be government control over one-seventh of the U.S. economy and some of the most important, personal and private decisions in our lives.

We know, from the failure of national health care systems around the world as well as the inefficiency, high cost and poor quality of government-run health care systems here at home (Veterans Affairs health care is a national disgrace, Medicaid provides poor quality at high cost, and Medicare has tens of trillions of dollars in projected unfunded liabilities) that that is not the type of health care reform that we need.

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Real health care reform should empower health care consumers, not government bureaucrats. Today, too much of health care spending is controlled by the government, employers and insurance companies. Instead, we should return that money to individual families and workers. That would mean changing the tax treatment of health insurance so that individuals who buy their insurance can receive the same tax break as those who receive insurance through their employer. Also, we should allow people to purchase health insurance across state lines if they can find a less expensive policy.

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  • http://agilog.blogspot.com/ agilog

    Do you want a for-profit business making decisions about your health?

    Besides the fact that our archaic system is costly and unsustainable, it does not provide the best care.

    For-profit health care insurers can deny doctor recommended treatments based on their bottom line and sometimes people die.

    But the CEOs still get their bonus at the end of the year.

    Brian replies. I could make a similar argument:
    Do you want a not-profit government employee making decisions about your health?

    Besides the fact that government programs like Medicare and Medicaid are costly and unsustainable, and they do not provide the best care.

    Government health insurers deny doctor recommended treatments based on budgets and sometimes people die.

    But these government employees still get their bonus at the end of the year.

    In a free market people make profits by providing goods and services that others want. If the insurer mistreats patients, it’ll gain that reputation, and patients will leave. (We do not have a free market in health insurance.) With government-run insurance, government has a monopoly, and hence little incentive to please patients.

  • Jim

    Just to show one of many loopholes in your pro republican plan, say healthcare policies could be bought across state lines. Great huh? Well after an out of state insurer rejects your claim or just refuses pay at all what do you think happens next? Well even if you can bring a legal claim against the insurer it will be in the insurance office home state. That is if you can even get an attorney to talk to you. You will have to appear in that state regardless of where you live.

    You think insurance companies don’t know this? They have attorneys on staff. The only one that wins for across the state line insurance sale is the insurance company always! It is amazing how your republican plans actually screw the public and they say it make health insurance cheaper, yea for the insurance company that wants to pay as few claims as possible its cheaper for them.

  • http://patientpowernow.org Brian Schwartz

    Jim, this is a good point, and I’ll look into how this would work. A question comes to mind:

    What would happen if a driver with out-of-state plates (and hence out-of-state insurance) hits your car, and the driver’s insurance refuses to pay. How is this resolved?

    I imagine car insurance companies have worked this out, and surely this happens.

    Back to medical insurance, I figure that if an insurer wants to sell a policy across state lines, they’d want to show that customers can settle disputes just as easily as they would with in in-state policy. Otherwise competitors from your home state would point this out in their advertisements, and few people would buy the product.

    Are you willing to allow people the freedom to buy insurance policies available in other states? Or do you want to empower politicians to forbid them to. Perhaps “for their own good”?

    And what is “pro republican” about free trade? Are you saying that if I disagree with a Democrat’s ideas, that makes my ideas “pro republican”? I do not follow the logic. … If I do not like vanilla ice cream, does that mean I like chocolate?

  • Quentin Ledford

    Although better than ANY government run alternative, there do exists several problems in our current system.

    Most of the problems in the ‘free enterprise’ system are directly attributable to the legislation and regulation that has been passed.

    This is largely because the mathematical laws that make insurance work continue to be violated (mostly by faulty legislation which is either drafted in total ignorance of these laws, or deliberately sabotaged by legislators with their own counter agenda).

    These mathematical laws require that standards of costs and covered services be standardized. It is enough that costs for medical care can vary greatly from one region of the country to another, but throw in the fact that certain States have extensive mandates as to how much or how little must be covered while other States have few such mandates and you have a system whereby the administrative costs of these things begins to escalate substantially. This administrative expense stiffles smaller carriers from participating in many markets and without this competition some carriers will tend not to lower their rates (as if they currently could in this environment). This forces one to consider what actually is driving the costs of healthcare.

    The two most egregious forces in the cost arena are:
    1. The mega-hospital conglomerates with the American Medical Association.
    2. The pharmaceutical industry.

    For decades, the AMA has deliberately restricted the number of physicians entering the workforce. Primarily they have done this by restricting the number of those that are ‘accepted’ into medical school and have increased the costs of medical training to the point whereby few can ever afford it. The rules of supply and demand have indeed forced the cost of medical services upward.

    Several decades ago, the AMA all but abandoned the interests of independent physicians, choosing instead to pursue the interests of the mega-hospital conglomerates. This is a step toward further increasing medical costs. The current agenda of these parties is to create an environment whereby there are no independent physicians. The new paradigm is that of the ‘hospitalist’ (a physician that works as an employee of a hospital, most of which are owned by the mega-hospital conglomerates).

    The public is generally unaware that 15% to 20% of every dollar paid in health insurance insurance premiums is paid directly to the mega-hospital conglomerates for ‘access’ to their PPO (Preferred Provider Organization) pricing network. Insurance companies are very good about predicting the incidence of claims. However, unless they know what the services for these claims will cost, it is impossible for them to calculate and budget (determine adequate premium charges) for covering the expense of paying claims.

    Currently, nearly 40% of all premiums collected are paid directly to the pharmaceutical industry. This does not take into account the extra money paid by the consumer for co-payments, deductibles, etc. I know of one individual taking a medication that cost nearly $17,000.00 per month. That’s SEVENTEEN THOUSAND dollars!

    How in the world can this cost be justified? In addition, the pharmaceutical industry spends billions of dollars for direct to consumer advertising. Unless I am misinformed, aren’t these substances classes as ‘restricted’, not to be dispensed without PHYSICIAN authorization.

    No system will work without pharmaceutical industry reform. Most people are completely in the dark about what drives these forces; but in my discussions with industry insiders, lack of patent protections and the current structure of FDA oversight are largely to blame. Either way, other than competition from generic drug manufacturers, no restrictions currently exist to curtail costs for prescription medications. Again, there are so many abuses here I could go on for hours on this issue.

    Pharmaceutical companies spend only about 10% of their revenue on research and development. However, they spend about 50% of their revenue on ADVERTISING! Promoting directly to the PUBLIC restricted substances. This is not only unethical, it is morally wrong and outright criminal.

    I’m not a great fan of insurance companies either, and I could go on extensively about other issues that need to be addressed on this arena. However, without any hesitation I will say this… ANY insurance company can be only as abusive as PERMITTED by law!

    The United States government was established under the premise that its purpose was to protect the people and to assure that its citizenry would be entitled to certain inalienable rights. It was never intended that such was to decay into a society dominated by sycophantic politicians open to the bribes of lobbyists, special interest groups, and partisan affiliates.

    Time and again, it has been proven that no economic system has ever prospered by governmental interference. As a matter of fact, history reveals that the greater the power wielded by a government over the economies of its constituents, the more its people suffer. No society has ever taxed its way into prosperity, nor has debt ever proven a blessing to any debtor.

    One thing I’ve noticed is that nearly EVERY piece of legislation that has been passed to ‘benefit’ the people over the past 25 years has been virtually completely unsuccessful in its promoted purpose. The ONLY thing most legislation has proven to do is to line the pockets of attorneys.

    It could never have been dreamed in the wildest imaginings of the founding fathers when they dveloped the concept of three branches of government to regulate one another that one day all three branches would be almost exclusively dominated by attorneys.

    Unless the citizenry of these United States wakes up and fires EVERY attorney in the Legislative and Executive branches of government, short of divine intervention the situation will continue to sink every deeper into the morass of debt and bondage.

  • http://agilog.blogspot.com/ agilog

    Do you want a for-profit business making decisions about your health?

    Besides the fact that our archaic system is costly and unsustainable, it does not provide the best care.

    For-profit health care insurers can deny doctor recommended treatments based on their bottom line and sometimes people die.

    But the CEOs still get their bonus at the end of the year.

    Brian replies. I could make a similar argument:
    Do you want a not-profit government employee making decisions about your health?

    Besides the fact that government programs like Medicare and Medicaid are costly and unsustainable, and they do not provide the best care.

    Government health insurers deny doctor recommended treatments based on budgets and sometimes people die.

    But these government employees still get their bonus at the end of the year.

    In a free market people make profits by providing goods and services that others want. If the insurer mistreats patients, it'll gain that reputation, and patients will leave. (We do not have a free market in health insurance.) With government-run insurance, government has a monopoly, and hence little incentive to please patients.