Arnold Kling and Nick Schulz, in the latest National Affairs, discuss how government intervention has excluded market mechanisms from regulating the operations of health care and education, the two most rapidly growing and influential sectors of the current American economy.
The commanding heights of our economy today are not heavy manufacturing, energy, and transportation. They are, rather, education and health care. These are our foremost growth sectors — the ones most central to employment and consumption; the ones that, increasingly, drive our economy. And it is in precisely these two sectors that the case for extensive government intervention and planning, if not outright control, is dominant — and becoming ever more so. …
If it were true only that health care and education are increasingly important sectors of our economy, there would be little cause for concern. Indeed, societies ought to desire economies that are strong and flexible enough to hum along as new technologies and other developments cause industries within them to rise and fall. The problem, rather, is that both health care and education are increasingly government-dominated industries. And this domination produces two ill effects that exacerbate the changes these sectors are already undergoing: Government’s influence artificially increases the demand for health care and education (by significantly subsidizing both), and it makes both sectors even less efficient than they would be otherwise (by heavily regulating them and shielding them from market forces). …
[I]n the cases of health care and education — in large part because of the dominance of government in these sectors — the prices of various “features” are often barely related to consumer preferences. With much of health-care and education spending paid for by third parties (and ultimately subsidized by government), consumers generally do not make decisions based on perceived relative value. The medical patient, instead of asking which medical procedure offers the greatest value, asks only whether the recommended procedure will be covered by insurance — a decision made by insurance-company or government bureaucrats, who have little sense of what is most important to the patient. The parents of a student in an elementary school are not responsible for choosing the school’s teaching methods; as “consumers,” they have no say in — and indeed, no way of knowing — whether the costly programs they pay for with their tax dollars are in fact producing good “value” in the form of their child’s education.
The result is that, in the sectors of education and health care, the preferences of policymakers — not of consumers — become the driving economic forces. And as these sectors become the new commanding heights, policymakers — rather than consumers and producers — will come to dominate more and more of our nation’s economic life.
Under these circumstances, the supposed inadequacy of market economics will become a self-fulfilling prophecy. Markets can work in education and health care, but only if governments allow them to. This means that, for the champions of free enterprise, introducing market principles and mechanisms into health care and education must become a top priority in the years ahead.
Jeff Emmanuel, at Pajamas Media, warns that a recent federal appeals court decision affirming the right of state bureaucrats in Georgia, Florida, and Alabama to overrule physicians and deny care to patients covered by Medicaid prefigures the federal rationing of health care nationwide.
Earlier this month, a panel of the 11th U.S. Circuit Court of Appeals ruled in favor of three states that filed suit to have final medical decision-making authority transferred from doctors to state bureaucrats.
In March, as reported here at Pajamas Media, Georgia, Florida, and Alabama appealed U.S. District Judge Thomas Thrash’s ruling that physicians, not government bureaucrats, were qualified — both legally and medically — to decide what was “medically necessary†for their patients, regardless of bureaucrats’ opinions.
The thrust of the states’ argument in Moore was summed up in the amicus brief filed by the state of Florida, which said, “Treating physicians … cannot be trusted with this sort of decision. When left to their own devices, they advocate for their patients, and deem all manner of unproven, dangerous, ineffective, cosmetic, unnecessary, bizarre, and controversial treatments as ‘medically necessary.’â€
The “final arbiter†of medical decisions is and should be “the state,†said attorney Robert Highsmith in March 24 oral arguments — and the panel of the 11th Circuit agreed.
As a result of this ruling, doctors within the 11th Circuit’s jurisdiction will no longer be “left to their own devices†to treat Medicaid patients under their care. However, current events suggest the relegation of medical professionals’ recommendations to the status of mere suggestions pending review by state bureaucrats isn’t likely to be limited to Medicaid cases alone for long.
As taxpayer-funded and bureaucrat-run health care programs like Medicaid and the State Children’s Health Insurance Program (SCHIP) are expanded to include more middle-class Americans, and as the federal government’s control over the health care market grows astronomically under the guise of “health care reform,†the issue of government encroachment on doctor-patient decisions will only increase.
The District Court held that “[t]he state must provide for the amount of skilled nursing care which the Plaintiff’s treating physician deems necessary to correct or ameliorate her condition.†… While it is true that, after the 1989 amendments to the Medicaid Act, the state must fund any medically necessary treatment that Anna C. Moore requires…, it does not follow that the state is wholly excluded from the process of determining what treatment is necessary. Instead, both the state and Moore’s physician have roles in determining what medical measures are necessary to “correct or ameliorate†Moore’s medical conditions…. The agency may place appropriate limits on a service based on such criteria as medical necessity or on utilization control procedures.†(Citations omitted, emphasis added.)
The democrat Porkulus is bad enough viewed simply as a colossal waste of money and burden on the productive portion of the economy, but additionally the many-hundred-page package (passed unread by the nation’s Solons) contains some deviously crafted provisions constituting a very large step toward federal takeover of American health care, as William Winkenwerder, Jr. and Grace-Marie Turner at National Review’s the Corner explain.
The health-related provisions take a sharp turn toward greater government control over our health sector, without any hearings or serious debate in Congress and without telling the American people what the changes would mean for their personal health care. This is the biggest land grab in the health sector ever attempted by the federal government, and it would be a major step toward thrusting full responsibility for health-care financing onto the American taxpayer—today and for decades to come.
For starters, the bill would create a 15-member federal health board, composed entirely of federal employees appointed by the president, charged with running “comparative effectiveness†research to assess which drugs and other medical treatments are most effective. The board’s decisions would determine what medical treatments the federal government would or would not pay for. The treatments some patients desperately need might not be on the list. House Appropriations Chairman David Obey (D., Wis.) explained that drugs and treatments “that are found to be less effective and in some cases, more expensive, will no longer be prescribed.â€
The bill would also establish a $400 million slush fund, which the secretary of health and human services would use to give government, not doctors and patients, more control over health-care decisions.
There will be a substantial burden on employers: The bill would impose a back-door mandate for them to continue providing health insurance to workers long after those workers have left. PricewaterhouseCoopers says the ten-year cost of this provision would be up to $65 billion just for those workers currently eligible for COBRA (the current program through which people can participate in ex-employers’ health plans). The estimated costs would be even higher if many more workers retire early, as they likely will if they know they can continue their employment-based coverage indefinitely.
Nadeem Esmail, in the Wall Street Journal, suggests Americans thinking about socialized health care ought to look at the Canadian health system to see what it’s going to be like.
Health-care resources are not unlimited in any country, even rich ones like Canada and the U.S., and must be rationed either by price or time. When individuals bear no direct responsibility for paying for their care, as in Canada, that care is rationed by waiting.
Canadians often wait months or even years for necessary care. For some, the status quo has become so dire that they have turned to the courts for recourse. Several cases currently before provincial courts provide studies in what Americans could expect from government-run health insurance.
In Ontario, Lindsay McCreith was suffering from headaches and seizures yet faced a four and a half month wait for an MRI scan in January of 2006. Deciding that the wait was untenable, Mr. McCreith did what a lot of Canadians do: He went south, and paid for an MRI scan across the border in Buffalo. The MRI revealed a malignant brain tumor.
Ontario’s government system still refused to provide timely treatment, offering instead a months-long wait for surgery. In the end, Mr. McCreith returned to Buffalo and paid for surgery that may have saved his life. He’s challenging Ontario’s government-run monopoly health-insurance system, claiming it violates the right to life and security of the person guaranteed by the Canadian Charter of Rights and Freedoms.
Shona Holmes, another Ontario court challenger, endured a similarly harrowing struggle. In March of 2005, Ms. Holmes began losing her vision and experienced headaches, anxiety attacks, extreme fatigue and weight gain. Despite an MRI scan showing a brain tumor, Ms. Holmes was told she would have to wait months to see a specialist. In June, her vision deteriorating rapidly, Ms. Holmes went to the Mayo Clinic in Arizona, where she found that immediate surgery was required to prevent permanent vision loss and potentially death. Again, the government system in Ontario required more appointments and more tests along with more wait times. Ms. Holmes returned to the Mayo Clinic and paid for her surgery.
On the other side of the country in Alberta, Bill Murray waited in pain for more than a year to see a specialist for his arthritic hip. The specialist recommended a “Birmingham” hip resurfacing surgery (a state-of-the-art procedure that gives better results than basic hip replacement) as the best medical option. But government bureaucrats determined that Mr. Murray, who was 57, was “too old” to enjoy the benefits of this procedure and said no. In the end, he was also denied the opportunity to pay for the procedure himself in Alberta. He’s heading to court claiming a violation of Charter rights as well.
These constitutional challenges, along with one launched in British Columbia last month, share a common goal: to win Canadians the freedom to spend their own money to protect themselves from the inadequacies of the government health-insurance system.
Also in the New York Times, Paul Krugman responds to George W. Bush’s veto of a middle-class entitlement first step to socialized health care by taking out the world’s smallest violin and playing the world’s saddest song.
Here’s what Reagan said in his famous 1964 speech “A Time for Choosing,†which made him a national political figure: “We were told four years ago that 17 million people went to bed hungry each night. Well, that was probably true. They were all on a diet.â€
Today’s leading conservatives are Reagan’s heirs.
Reagan was perfectly right back then. The cost of food is derisory in the United States, and even welfare provides more than enough income to preclude “going to bed hungry.”
And George W. Bush was perfectly right to veto that manipulatively-titled bill today. And, yes, conservatives are Ronald Reagan’s heirs and proud of it.
Our theme for today comes from George W Bush: “Freedom is the desire of every human heart.â€
When the president uses the phrase, he’s invariably applying it to various benighted parts of the Muslim world. There would seem to be quite a bit of evidence to suggest that freedom is not the principal desire of every human heart in, say, Gaza or Waziristan. But why start there? If you look in, say, Brussels or London or New Orleans, do you come away with the overwhelming impression that “freedom is the desire of every human heartâ€? A year ago, I wrote that “the story of the Western world since 1945 is that, invited to choose between freedom and government ‘security,’ large numbers of people vote to dump freedom – the freedom to make your own decisions about health care, education, property rights, seat belts and a ton of other stuff.â€
Last week freedom took another hit. Hillary Rodham Clinton unveiled her new health care plan. Unlike her old health care plan, which took longer to read than most cancers take to kill you, this one’s instant and painless – just a spoonful of government sugar to help the medicine go down. From now on, everyone in America will have to have health insurance.
Hooray!
And, if you don’t, it will be illegal for you to hold a job.
Er, hang on, where’s that in the Constitution? It’s perfectly fine to employ legions of the undocumented from Mexico, but if you employ a fit 26-year-old American with no health insurance either you or he or both of you will be breaking the law?
That’s a major surrender of freedom from the citizen to the state. “So what?†says the caring crowd. “We’ve got to do something about those 40 million uninsured!
For months, Democratic presidential candidate Hillary Rodham Clinton has promised a plan to bring health care to every American.
She was to make good on that pledge Monday, unveiling a sweeping proposal requiring everyone to carry health insurance and offering federal subsidies to help reduce the cost of coverage.
With a price tag of about $110 billion per year, Clinton’s “American Health Choices Plan” represents her first major effort to achieve universal health coverage since 1994, when the plan she authored during her husband’s first term collapsed.
Free federally-provided coverage for the uninsured, mandated policies (paying for the former) for the rest of us, producing dramatically increased consumption of free medical services. Just imagine how much free health care the substance-abusing urban democrat constituent on welfare can consume. Result: federal regulation of physician charges, shortages and queues for the rest of us.
What a deal! The working American gets to pay for free health care for the bums, and then gets to stand in line right along with all the bums he’s paying for. When he finally gets to the head of the line, he will get exactly what the bum who didn’t pay anything gets. That end result will be significantly inferior health services than the American consumer gets now, because those services will need to be spread a lot thinner.
The most able and ambitious doctors will open unregulated clinics in the Caribbean, and the wealthy will fly off in their private jets for health care, while everyone else waits in line for his share of socialized and rationed services.
If Republicans succeed in explaining for a second time what socialized medicine really means, Hillary will be looking like this after the votes are counted.
The Washington Times quotes some of the results of a National Center for Public Policy Research study.
A national health-care system may be the Holy Grail of American liberalism. If only the government managed medicine, the argument goes, costs could be restrained, quality assured and access extended from the poshest beach house to the humblest shotgun shack…
• Breast cancer is fatal to 25 percent of its American victims. In Great Britain and New Zealand, both socialized-medicine havens, breast cancer kills 46 percent of women it strikes.
• Prostate cancer proves fatal to 19 percent of its American sufferers. In single-payer Canada, the National Center for Policy Analysis reports, this ailment kills 25 percent of such men and eradicates 57 percent of their British counterparts.
• After major surgery, a 2003 British study found, 2.5 percent of American patients died in the hospital versus nearly 10 percent of similar Britons. Seriously ill U.S. hospital patients die at one-seventh the pace of those in the U.K.
• “In usual circumstances, people over age 75 should not be accepted” for treatment of end-state renal failure, according to New Zealand’s official guidelines. Unfortunately, for older Kiwis, government controls kidney dialysis.
• According to a Populus survey, 98 percent of Britons want to reduce the time between diagnosis and treatment.
Unlike America’s imperfect but more market-driven health-care industry, nationalized systems usually divide patients and caregivers. In America, patients and doctors often make medical decisions and thus demand the best-available diagnostic tools, procedures and drugs. Affordability obviously plays its part, but the fact that most Americans either pay for themselves or carry various levels of insurance guarantees a market whose profits reward medical innovators.
Under socialized medicine, public officials administer a single budget and usually ration care among a population whose sole choice is to take whatever therapies the state monopoly provides.
Medicrats often distribute resources based on politics rather than science. Government doctors and nurses frequently are unionized. As befalls American teachers in government schools, excellence rarely generates additional compensation — so why excel? Without incentives, such structures eventually breed mediocrity. Patients in universal-care systems get cheated even worse than do students in failing public schools. While their pupils suffer intellectually, politically driven health care jeopardizes patients’ lives.
• Emily Morely, 57, of Meath Park, Saskatchewan, discovered that cancer had invaded her liver, lungs, pancreas and spine. She also learned she had to wait at least three months to see an oncologist. In Canada, where private medicine is illegal, this could have meant death. However, Mrs. Morely saw a doctor after one month — once her children alerted Canada’s legislature and mounted an international publicity campaign.
• James Tyndale, 54, of Cambridge, England, wanted Velcade to stop his bone-marrow cancer. However, the government’s so-called “postcode lottery” supplied this drug to some cities, but not Cambridge. The British health service finally relented after complaints from the Tories’ shadow health secretary, MP Andrew Lansley.
• Edward Atkinson, 75, of Norfolk, England, was deleted from a government hospital’s hip-replacement-surgery waiting list after he mailed graphic anti-abortion literature to hospital employees. “We exercised our right to decline treatment to him for anything other than life-threatening conditions,” said administrator Ruth May. She claimed her employees objected to Mr. Atkinson’s materials. Despite a member of Parliament’s pleas, Mr. Atkinson still awaits surgery.
For all its problems, America’s more market-friendly health system offers patients better care and would deliver greater advancements if government adopted liability reform, interstate medical insurance sales, unhindered health savings accounts and other pro-market improvements. As for importing universal care, author P.J. O’Rourke said it best: “If you think health care is expensive now, just wait until it’s free.”
