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.

As for EMR, its widespread adoption will enable many wonderful new applications for improving diagnosis, quality, and coordination of care, but don’t expect it to save any money for many, many years–if ever. The computer revolution was well into its fifth decade before it began to produce any productivity improvements. IT is expensive and the state of the art of EMR is primitive at best. Virtually every doctor I’ve talked to who uses EMR said it slows them down and reduces their productivity, but is definitely worth doing once somebody (anybody) comes up with a system that works.

Myth #2: Too many young adults forgo buying health insurance because they think they’re immortal. Actually, they’re making rational decisions to avoid insurance that discriminates against the young. Virtually every employer in America charges identical health insurance premiums to its employees regardless of age, even though the average 64-year-old will incur 3-4 times the medical costs of the average 20-year-old. And the older worker probably earns a lot more, to boot. The AHCA actually does permit age rating, but it also places an artificial cap of 2x on the maximum high-low premium differential, thus forcing insurers to continue overcharging young adults and children (especially children) and driving many of them out of the market. Congressmen, please hear this: most people—even young adults—make mostly rational decisions most of the time. Stop stereotyping them and start looking for the underlying economics driving their decisions.

Myth #3: Requiring everybody to buy insurance will make people stop avoiding it when they’re healthy. It’s not the legal requirement that will make people buy it (witness the number of uninsured motorists), but the strong penalties if they don’t.  For many people, the AHCA’s 2.5% tax penalty will represent no more than an affordable right to buy health insurance whenever they do get sick and need it. Then they’ll buy it, run up big medical bills, and drop it a few months later—as many are now doing in Massachusetts. Never underestimate the ability of people to game the system to their advantage. Bureaucracies suffer from it. Markets work because of it.

Myth #4: Fee-for-service (FFS) medicine is fundamentally flawed because it rewards doctors for doing more than patients need. So why is it that our fee-for-meals system and the fee-for-shoes system don’t result in massive over purchasing of those needs? Could it be because the consumer is in charge of deciding how to spend her own money to buy only what she needs from vendors that offer the most appropriate, lowest priced products and services? Sometimes non-FFS medical reimbursement systems do indeed offer advantages, but just because something is a good idea in some cases doesn’t mean it should be universally mandated. We made that mistake during the last three decades of the 20th century when we tried to make everybody join HMOs because they had worked so well in a few western cities. Instead, let a thousand flowers blossom!

Myth #5: We need a new federal insurance exchange bureaucracy to vet insurers and negotiate their premiums before allowing consumers to buy from them. If what you want is to create a market for health insurance, all you need to do is establish clear, reasonable standards for insurer and consumer participation (e.g., minimum benefits, required rate-setting methodologies, allowed underwriting requirements, and transparency parameters), publish them, and then enforce them when somebody cheats.  There is no need for government price negotiation—market competition will handle that just fine. There is no need for lengthy, expensive application processes—just self-certification by the participants with severe knuckle-rapping for departures from the path of righteousness. The proposed AHCA insurance exchange bureaucracy is guaranteed to form an unnecessary roadblock against innovative, efficient insurers that need to move quickly in responding to opportunities, threats, and consumer demands.

Myth #6: Insurance must cover doctor office visits, lab tests, x-rays, prescription drugs, and preventive services. That’s not insurance, since these are normally-purchased consumer services that, stripped of burdensome insurance overhead and price floors, would be cheap and affordable by virtually everybody in a consumer-market setting—except for the poor whose needs can be met with government safety-net assistance. We need insurance to pay for normally unaffordable, medically necessary care. There’s a reason why we don’t buy car insurance to pay for gasoline and tires.

Myth #7: We need a government health board to set cost-benefit standards for medical services. Ok, then we also need a federal board to tell us which laptop computers represent good value—and which ones we’re not allowed to buy. And ones for cars and clothes and video games and movies.  If you want consumers to receive value from their medical services, here’s a thought: give them control of the money to demand and act on information from doctors and hospitals about which of them provide the highest quality care at the lowest price.  A federal standards board is a great way to freeze technology and halt innovation, but it will never assure value—something that empowered consumers can do in their sleep (Note: For historical perspective, Google “Gosplan).”

There are actually a lot more myths that underlie AHCA, but I need to stick with my clichéd riff on Stephen Covey’s legendary book. And these seven should get you wondering what else lies buried in the House of Representatives’ wondrous ode to excess that is the Affordable Health Choices Act.