D’oh! More on Health Care.
A loyal reader of this blog stated today that he/she disagrees with everything I believe about health care reform, then declined the opportunity to back up that statement. I realized that in my past posts on the issue I have spewed my opinions and neglected to offer referenced support for those opinions. To you, I offer the opportunity to conduct your own research and will post any coherently composed, researched, and referenced essays that either agree with me or support the need for a government option. Here goes:
The major argument in favor of reform focuses on the uninsured, 47 million in this country, according to 2006 census data. LOOK at the census data. 10 million of the uninsured are non-citizens. That means there are only 37 million uninsured Americans. Another 18 million earn over $50,000 a year, and certainly can afford to buy their own insurance. 19 million are in the 18-34 age group, and likely choose not to purchase insurance…I know several people that make this choice, regardless of their ability to pay for insurance. The census data includes those who are between jobs, a majority of whom are uninsured for less than 4 months. This leaves 10-15 million Americans that are involuntarily uninsured, about 3% of the population. Are we really getting bent out of shape for such a small fraction of the population? I don’t think I’m a cold, heartless person, but really? Assuming we were trying to cover all 47 million of these people, why does it have to cost over a trillion dollars? Put $50 million in an interest bearing account, $1 million for each uninsured person. At a 3% annual return, this gives each person $30,000 a year to spend on a private insurance plan. There. Problem solved, at a savings of $950 billion.
Proponents of a public insurance option claim that it will increase competition and drive down the cost of health care. This is flat out false. A government option would reduce competition by driving the private sector out of business, not as a result of providing better coverage at a lower cost, but because the government is an unfair competitor in the market. The government can hide its true costs, creating artificially low premiums. Furthermore, the implicit guarantee of a bailout that a public option realizes would further lower costs. Wait, didn’t Obama say this?
"No matter how we reform health care, we will keep this promise to the American people. If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what."
I find that hard to believe, given the Lewin Group estimate that 120 million Americans would be forced to move from private to public insurance. The Associated Press says "White House officials suggest the president’s rhetoric shouldn’t be taken literally." If adopted, a government option would very quickly become the only option by driving all other companies out of business. Think about it: the government is backed by the U.S. Treasury, is free of any taxes, and can increase the costs of competitors by introducing new legislation.
What about efficiency and profits? After all, private insurers are driven by profits and lack the efficiency of the government, right? (When have the words ‘government’ and ‘efficiency’ ever been synonymous?) The Congressional Budget Office reported that less than 3% of premiums go toward profit for the insurer. Albiet small, this profit motive drives efficiency. Without this incentive for efficiency, a public option will stray in the direction of inefficiency. A couple examples: (1) It took Medicare 30 years longer than the private sector to include prescription drug coverage into benefit packages. 30 years! (2) Bear with me. Medical errors add a huge amount of expense to the price of health care. Private insurance started forcing providers to pay for costs resulting from medical errors as early as 1929. Medicare didn’t begin this practice until 2008, and STILL reimburses providers for the cost of medical errors in some cases. The U.S. government is thus rewarding providers for committing medical errors. That’s efficient? Only 23% of Americans actually believe that costs will go down with a government option.
A public option will discourage innovation. Take this example:
"Park Nicollet Health Services, a hospital and clinic system based in St. Louis Park, Minn…started…spending as much as $750,000 annually on more nurses and on sophisticated software to track heart failure patients after they left the hospital. It reduced readmissions for such patients to only 1 in 25, down from nearly 1 in 6. But the reduction has been a losing proposition. Although the effort saved Medicare roughly $5 million a year, Park Nicollet is not paid to provide the follow-up care. Meanwhile, fewer returning hospital patients mean lower revenue for Park Nicollet. "We’ve kept it up out of a sense of moral obligation to these patients, but we’re getting killed," said David K. Wessner, chief executive of Park Nicollet. "We will totally run out of gas.""
Profit incentive from the private sector drives innovation. Competition drives innovation. A government health insurance option will kill the private sector, competition, and innovation, all at a huge price to taxpayers. If any of you still disagree with me, write a coherent post with links to references explaining why free-market proposals will be more harmful to health care in the U.S. than the current legislation up for debate in congress. I will post it on this blog for all to see. Just so you know, I’m not the only one against this:
