Category Archives: Myths and Bad Ideas
President Obama went all-in on health reform tonight (September 9, 2009) with his win-one-for-the-late-senator pitch to the assembled houses of Congress. Beyond his always-inspiring rhetoric, his actual proposals offered virtually nothing we haven’t heard before. His essential message: when it comes to health reform, I’m asking the American public to accept hope over experience, faith over fact.
Have Faith that the government will provide a public insurance option that is more competitive, efficient, fair, and effective than anything you can get from a private insurer. Subtext: Ignore the man behind the curtain who has already given you the unmatched fairness and effectiveness of FEMA, Fannie, Freddie, Medicare ($74 Trillion in the hole), Social Security ($17.5 Trillion under water), the national debt ($11.7 Trillion and counting), the sex-offender registry, and the SEC’s crack enforcement of Bernie Madoff’s Ponzi scheme.
“We’ll cut hundreds of billions of dollars in waste and inefficiency in federal health programs like Medicare and Medicaid…” President Barack Obama’s op-ed on health care reform in the New York Times.
Brilliant! Why didn’t Presidents Johnson, Nixon, Ford, Carter, Reagan, Bush I, Clinton, or Bush II think of this?
“There’s no reason that we shouldn’t be catching diseases like…prostate cancer on the front end.” President Barack Obama’s op-ed on health care reform in the New York Times.
Once again, Mr. President, wrong end. It reminds me of a banker friend who years ago told me about his first annual adult physical: “The doctor told me he was going to give me a digital prostate exam. I said it was simply amazing what they can do with computers these days.”
According to President Obama, hordes of helpless American are being “held hostage by health insurance companies that deny them coverage or drop their coverage” when they get sick. That was the central message he took to the road last week in what appears to be an increasingly desperate attempt to save his ponderously unworkable trillion-dollar health reform package. In conjuring up insurers riding roughshod over hordes of Americans, the President also tramples the truth. The fact is that the 91% of all privately insured Americans with employer-based insurance never face denial of coverage for pre-existing conditions (so-called “pre-ex”) or loss of insurance when they get sick (called “rescission”). It’s illegal.
What the President is spending so much political capital castigating is the remaining 9% of the private insurance market—the part that provides essential individual health insurance to people ineligible for employer coverage. Pre-ex and rescission are relevant here because individual insurers must operate differently from employer-based insurers.
“(W)e will require insurance companies to cover…colonoscopies. There’s no reason that we shouldn’t be catching diseases…on the front end.” President Barack Obama’s op-ed in the New York Times, 8/16/9.
Uh, I don’t think it’s that end, Mr. President.
A health economist acquaintance of mine likes to joke that Paul Krugman is the first economist in history to receive the Nobel Prize posthumously. Since the award is given only to living recipients, his point is that Mr. Krugman’s apparent second incarnation as New York Times columnist and self-professed liberal-with-a-conscience shows no evidence of the intellectual rigor that enrobed him on the Stockholm stage. Even the Times’ own former ombudsman has lamented Mr. Krugman’s “disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.”
Mr. Krugman continued to prove this point in a recent Times column that purports to explain “Why Markets Can’t Cure Healthcare.” In it, he leans heavily on a 1963 paper by Kenneth Arrow (another Nobel laureate) entitled, “Uncertainty and the Welfare Economics of Medical Care.” Mr. Krugman said this paper “demonstrated—decisively, I and many others believe—that health care can’t be marketed like bread or TVs,” and that markets cannot be the answer to our health care problems.
In a 7/19/9 New York Times Magazine article “Why We Must Ration Health Care,” Princeton bioethicist Peter Singer argues that we need government to actively ration the amount of medical care Americans get, particularly as they near the ends of their lives. Unfortunately for his readers, his argument is riddled with false hypotheses, untrue statements, and faulty logic. It is also unethical.
He mistakenly argues that health care is both a “scarce resource” (which it is) and a “public” good (which it is not). An economist could have told him that a public good must be both non-excludable and its consumption non-rivalrous. That’s economic geek-speak meaning that it’s not a public good if its use can be limited to paying customers or if nobody else gets to use it when you do—whether you paid for it or not. Accordingly, national defense is a public good, but health care is an “economic good” which Dictionary.com defines as “a commodity or service that can be utilized to satisfy human wants and that has exchange value.” Thus, economic goods include anything for which the supply is limited and that somebody has to be willing to pay for–like medical care.
The government’s full-court press on health reform, epitomized by the awesomely inapt and inept Affordable Health Choices Act of 2009 (AHCA) now wending its way through the House, is trying to petrify in amber many of the myths that dominate so much of our thinking about health care. Here’s a brief look at some of the worst:
Myth # 1: Prevention and electronic medical records (EMR) will save money. Prevention is indeed a wonderful thing for extending people’s lives and allowing them to make more money, buy more stuff (including medical care), give more money to charity, and spend more time with their grandchildren. But it does not save any money on medical care! Here’s what the journal Health Affairs concluded earlier this year, “Over the four decades since cost-effectiveness analysis was first applied to health and medicine, hundreds of studies have shown that prevention usually adds to medical costs instead of reducing them. Medications for hypertension and elevated cholesterol, diet and exercise to prevent diabetes, and screening and early treatment for cancer all add more to medical costs than they save.” So forcing people to buy insurance that covers yet more preventive services (an oxymoron if you think about it) will drive premiums up not down.
I recently spent the better part of a Colorado summer Saturday reading the worst parts of something called The Affordable Health Choices Act of 2009. Purported to constitute health care reform, its thousand pages were introduced this past week by the chairmen of the three congressional House committees with jurisdiction over health policy. It is the single most egregious piece of health care legislation to cross my desk in four decades. Hillary Care (yes, I read that one too), nonsensical as it was, represented an order of magnitude more thought than this bill which is so blind to basic economics on so many levels that I marvel at the ability of the three chairmen, Speaker Pelosi, President Obama, and the AMA to praise it with straight faces.
It’s a typically cool, cloudless July 4th morning in Colorado Springs, so my mind inevitably wanders to…what else but health reform. When, oh when, will we have the market-based health care system we need so that I can move on to addressing simpler problems? Like world peace. But when better than Independence Day to ponder an important question of the day: Is health care a right?
I wish it were. It would be so much simpler if all Americans could exercise their right to medical care as they do their rights to life, liberty, and the pursuit of happiness. If health care were on a par with, say, the right to free speech, my right to medical care would not limit your access to the same thing. The supply would be free and limitless. Any question of violation of that right would be dealt with by the courts.