@ FutureChallenges: The American Way and Healthcare

My newest article at Future Challenges, "The American Way and Healthcare," explores political economy in light of the health insurance debate in the United States. Arguing that an improper understanding of the proper role of government is at the root of the health insurance debate, the article briefly outlines the current, generally false, understanding of a government's role and what it should be instead. It then explores a number of pernicious effects that such misapplication of government has. While not offering a third solution (which I have done elsewhere), the article argues that by failing to explore the proper role of government, American society has been left with two poor choices: the status quo or a "big government" solution. A reevaluation of the true purpose of government will go a long way toward not only allowing government to flourish in its proper place but also freeing-up creative impulses to solve many real problems (such as the dismal American health system) in more appropriate forums.

The article states:

Healthcare, or more aptly the provision of health insurance, has been an increasingly contentious issue in American politics, particularly over the past three years. Since the passage of Obamacare in 2010 to its potential repudiation by the Supreme Court following the forthcoming judgment this summer, American politics have become infused with this intractable problem.

There is little doubt that the current American system—a bastardized semi-competitive private monstrosity that is enfeebled by regulations, restrictions, and complications—is a disaster. It is expensive, inefficient, and unable to provide reasonable access to many Americans.[1] This has lead many on the American left, and observers from across the Atlantic, to advocate for a government solution.

However, while some champion Obamacare—the current administration’s healthcare reform bill—as a step in the right direction, many across the political spectrum find it has failed to provide an ideal solution, albeit for different reasons. Many on the left feel it does not go far enough, pining for the type of public system that exists in numerous European countries. In contrast, the right has castigated it as a tremendous overreach of government authority and responsibility, but has, as a whole, offered few alternate solutions.

That a revamping of the system is needed seems to be beyond question; however, very little thought has been given to what is the proper forum for such change. The knee-jerk reaction, as is unfortunately all too common in American society, is to turn to the biggest and most powerful institution—the federal government—to solve such intricate problems. This has left Americans, at least in the popular media, with two choices: massive government involvement or the status quo.

The remainder of the article can be accessed at Future Challenges.

Mandate This Too!

The Wall Street Journal offers a brilliant, satirical letter to the Obama administration on other healthcare essentials that the government ought to mandate coverage for. Here's a sampling of the letter:

Dear President Obama,

Can you believe the nerve of employers? Many of them still seem to think that they should be allowed to determine the benefits they offer. I guess they haven't read your 2,000-page health law. It's the government's job now. 

That's a good thing, too. Employers for too long have been able to restrict our access to essential health services like contraception by making us pay some of the bill. Really, it's amazing that we aren't all dead. Now, thanks to you, we'll enjoy free and universal access to preventative care just like workers do in Cuba. Even so, there are still many essential benefits that the government must mandate to make the U.S. the freest country in the world. 

• Fitness club memberships. Most doctors agree that exercising is one of the best ways to prevent disease. However, gym memberships can run between $240 and $1,800 per year. Such high prices force us to choose between exercising and buying groceries. While we could walk or jog outside, many of us prefer not to. Therefore, employers should be required to pay for workers' gym memberships. Doing so might even reduce employers' health costs, which is why many companies already subsidize memberships. Those that don't are limiting our freedom to exercise. 

...

If only people would understand how un-hyperbolic and similarly defended these proposals really are to the underpinning logic of the current contraception issue. For the remainder of the letter, see the Wall Street Journal.

A Fair Compromise?

The Obama administration seems to think it has a winning formula in its ill-handled contraception fiasco. Having previously refused to exempt religiously-affiliated organizations from providing contraception through their insurance programs, Obama claims to have accommodated these organizations with a new ruling. The new compromise purportedly exempts religiously-affiliated organizations, but not their insurance providers. Specifically, these institutions no longer need to provide healthcare plans that contradict their beliefs; however, the insurance provider is required to offer supplemental riders, free-of-charge, to any insured policyholders who want to have these services.

The "compromise" is, bluntly, asinine and economic nonsense. It is a political dressing-up of the same program, meant to confuse opponents through a veil of economic subterfuge. The Wall Street Journal outlined the argument well:

...[Y]ou almost have to admire the absurdity of the new plan President Obama floated yesterday: The government will now write a rule that says the best things in life are "free," including contraception. Thus a political mandate will be compounded by an uneconomic one—in other words, behold the soul of ObamaCare.
...
Insurance companies won't be making donations. Drug makers will still charge for the pill. Doctors will still bill for reproductive treatment. The reality, as with all mandated benefits, is that these costs will be borne eventually via higher premiums. The balloon may be squeezed differently over time, and insurers may amortize the cost differently over time, but eventually prices will find an equilibrium. Notre Dame will still pay for birth control, even if it is nominally carried by a third-party corporation.

Fortunately, many opponents of this ruling have not been duped by President Obama's and Secretary of Health and Human Services Kathleen Sebelius's twisted logic. They correctly stand firm against the attempted gross encroachment into the private lives of individuals. GOP Presidential candidate Rick Santorum summed it up best, "It’s not about contraception.... It’s about economic liberty."

Government Healthcare Interferes in Private Lives

Many are outraged at the Department of Health and Human Services' (HHS) recent decision to force religiously-affiliated organizations to provide reproductive and preventative services without co-pay or deductible, as required under the new Obamacare law. HHS Secretary, Kathleen Sebelius announced that while synagogues and churches would be exempt from the rule, other religiously-affiliated organizations, including non-profits would not be. Religiously-affiliated organizations, however, were provided an extra year to prepare for implementation.

This decision has highlighted the excessive overreach of Obamacare into the private sector. The law is facilitating gross interference in the private lives of individuals beyond what is appropriate for government involvement. It not only gives the government an undue amount of arbitrary coercive power, but greatly impedes the ability of the individual (person and organization) to choose their own way of life and even make their own mistakes.

Many religious leaders have spoken out quickly and decisively on the ruling, arguing that it forces them to provide for services, such as the morning-after pill, that challenge their personal and religious beliefs. The archbishop of New York, Timothy M. Dolan said "In effect, the president is saying we have a year to figure out how to violate our consciences...."

This is not a commentary on the wisdom of providing or not providing contraception. The issue at stake here is not whether these religious groups and leaders are right about the provision of these services—if one can even make the claim that there is a "right." Instead, it is about whether individuals and private organizations should have the right to choose the services they provide to their employees and the manner in which they conduct their operations.

Private bodies should not be forced, by the government, to behave in certain ways because some, who happen to be in power, believe that one way or another is a better way to conduct one's live. The wielding of such power by the government moves far beyond the pale of the proper role of government and descends towards a dangerous tyranny. While the government certainly has to make laws and use coercive power to alter the individual's behavior in some instances, there is a wide gap between, for instance, preventing murder or theft, which essentially protects one citizen from another, and forcing citizens to provide services or goods to others when the provider (and possibly the recipient) objects and the recipient can obtain these services elsewhere if they so desire.

By allowing the government to inflict such arbitrary and minute decisions on the lives of private organizations, Obamacare has ventured too far into the realm of totalitarian control. The rule has offered no clear delimitation of what is appropriate and what is inappropriate intervention in the private sector, relying upon a perspective of government that essentially allows any meddling if some policymaker believes the outcome would be "better." An argument that science or policy deems such practices better (even if true) is not sufficient to warrant government control.

The proposed alternative, exemptions, as provided to houses of worship, are not a fair or appropriate remedy. Everyone must be treated the same under the law. Allowing some to avoid following a law because of personal reasons relies upon the same arbitrariness that should not be present in legislating and government rule-making. Why, one must readily ask, should religious objections be acknowledged but not other personal or economic ones?

The truth is that the government has no business in deciding what employers should provide in terms of healthcare and reproductive services. There is certainly a worthy debate to have over merits of providing birth control—a debate that would most likely be lively and impassioned. But it is a debate that should happen in the social sphere not in the government. It is a debate that will ebb and flow as social values and mores change, as people, for instance, choose to associate and work for organizations that provide or refuse to provide benefits that coincide with their personal beliefs. But it is not just for coercion to be used to force some to adhere to the beliefs of others.

The Stupak Star

The ascent of Bart Stupak (D-MI) is an astounding and laudable political maneuver. Stupak has represented Michigan’s First District since 1992 and serves as a member of the House Energy and Commerce Committee. According to statistics at Google Trends, Stupak was a relatively insignificant political force only two years ago. Even as late as September 2009, he was relatively unknown outside of Washington circles.

However, with the heating up of the healthcare debate, Stupak stormed onto the national scene becoming an instant household name. He emerged as a leader of some ten pro-life Congressmen and women that threw a wrench into Pelosi’s plans. It was only with a promise, by President Obama, to sign an executive order affirming the long-standing federal policy of non-funding of abortions that Stupak and his gang decided to support the bill.

His support for and ultimate passage of the legislation has disappointed many newfound supporters on the right, who feel betrayed by his commitment to the 'sanctity of life’. The pro-life Susan B. Anthony List group has even revoked an award that they were to present to him. Some reports indicate a growing political movement fomenting against him in Northern Michigan. A Republican doctor, Daniel Benishek, who has never held political has stepped forward to run against Stupak in the upcoming election. Benishek has quickly amassed a large following.

However, despite the fallout from his actions, Stupak’s political strategy – whether intentional or not – will reap him many rewards. It is unlikely that Republicans can mount a significant challenge against him. The district he represents has been in Democratic hands since 1933. Stupak has been its representative for the past 18, winning over 65% of the vote in all four of the last elections that were stuffed with as many as five candidates. The Cook Report ranks Stupak’s district as a “Solid D[emocrat]”.

Furthermore, if Stupak faces even the slightest uphill battle in his campaign, it is undeniable that the Democratic war chest and even Pelosi and Obama will come to a quick rescue. After winning his support for their pet project they would be foolish to let him, out of all Congressional Democrats, swing.

The brilliance in Stupak’s maneuvers is that he successfully capitalized on his unique position to launch himself into the national spotlight. Not only did he become the leader of the pro-life Congressional Democrats, but he outshone all of them. He managed to steal the spotlight and make his person and his issues the prime focus of America. The media, Washington, and most Americans sat, white-knuckled, waiting for his decision on Sunday. By ultimately falling in line with the Democrats he has ingratiated himself to the leadership while making himself nationally famous (or infamous).

The execution of his rise is almost so categorically perfect that one, maybe cynically, wonders if he was a “Yes” vote all along. The executive order that facilitated his vote is, as Stupak admitted, tenuous. Many may argue that Stupak played a brilliant bluff that, after 18 years, launched his political career. Regardless, expect to see a lot more of Bart Stupak in the future as he undoubtedly will become a much bigger player in Washington.

A Dark Day in America

With an astonishing display of fortitude and obstinacy the Obama administration and the Congressional leadership have managed to pass the healthcare reform bill.  The passage of this monumental legislation represents the first time such massive legislation has been passed without bipartisan support (both Social Security and Medicare were passed with Republican support).   It is yet another chip in the very foundation of the American system and a continued erosion of what once made America great.

The legislation was passed on the back of a deal between Obama and the pro-life Congressional Democrats, led by Bart Stupak (D-MI). Stupak’s gang of ten, who voted for the original House bill, were philosophically opposed to the Senate bill which, in their opinion, provided means for federal funding of abortions. Unfortunately for America, they were bought off by a promise from the President to sign an executive order the status quo, namely disallowing federally funding for abortions.

Obviously Obama’s pitch was convincing enough to persuade Stupak; however, it is unclear how permanent or effective the executive order will be. An executive order, which is lesser in force than legislation, can readily be revoked by any President, current or future, on a whim. While in his press conference, Stupak indicated that Obama promised not to alter the order; it is questionable whether such a commitment will remain once the pro-choice Obama is pressured by his constituents. Why Stupak was convinced that these prohibitions for federal funding of abortion-related procedures will remain unadulterated is mystifying.

But regardless of Stupak’s reasoning, the bill will now be signed into law. The so called reform unfortunately will do little to fix the problems in America’s healthcare system. The Democrats undoubtedly have had the best of intentions in trying to fix a broken system, but their turn to socialist policies undermines the very foundations of the American system. Not only does this gross expansion of government power undercut the individual liberties of every American, but it burdens an already suffering economy.

There is no doubt that the industry needed reform. Neither Republicans nor Democrats denied this. But, as has consistently been shown, in both theory and practice, the paternalistic strategy of controlling the production and distribution of economic activity creates more harm than good. Unfortunately, this healthcare package represents the naïve utopianism that sounds pleasant to the uninformed ear, but in reality is mere sophistry. The health insurance industry will remain a mess with the additional encumbrance of excessive government involvement and added burdens on the American people.

Regrettably for America, the passage of this bill will not signify the end of the healthcare debate. Republicans are already gearing up to revoke the bill either through future legislation or the court system. For instance, the constitutionality of the individual mandate to purchase insurance is questionable. The next few years will be littered with an abundance of lawsuits aimed at repealing all or part of the legislation.

Likewise, Republicans will seize on the argument of government excess in the upcoming November elections. The midterm elections will revolve around the issue of healthcare (and the economy) and will define the direction of America for years to come. Hopefully, the GOP will successfully be able to convey the message that short-run, government-led ‘fixes’, while throwing the average American small and temporary handouts, will ultimately do more harm than good. If they fail, America will continue its anesthetized erosion into a second rate nation.

Putting the Con in Reconciliation

With Obama’s latest audacious push on healthcare, it looks increasingly likely that the Senate will turn to the parliamentary tool of reconciliation. The procedure, which is narrowly targeted at budgetary issues, provides for a method to avoid the Senate filibuster. Reconciliation has been used in the past, but in all cases for narrow budget-related issues. Democrats Senate leaders’ intention seems to be to ram through as much of an unpopular health care bill as procedure will allow.

Democrats argue that reconciliation needs to be used to overcome the obstinacy of the Republicans. They accuse the Republicans of hindering “real progress” in the name of politics, which was aided by Scott Brown’s win in Massachusetts. However, this is nothing but a straw man. Republicans are only able to use the filibuster and prevent a final vote because their constituents do not support the healthcare bill. The fact of the matter is that it would be political suicide for the Republicans, or any party for that matter, to obstruct legislation simply to ‘stick-it’ to the majority party.

The filibuster is a tool that was designed to limit the power of the majority party in the Senate. In some ways this is inherently undemocratic (and more republican) in terms of institutional structure. However, in other ways it is precisely democratic. As is being shown today, the people’s representatives do not always vote in line with their constituencies’ wishes. Rasmussen’s most recent poll shows that 52% of voters oppose the current package. When ideology steps in the way of responsibility to the voters, the filibuster can serve as a useful check on anti-democratic tendencies.

This clearly explains Republican behavior; namely that they understand the people do not want Obama’s healthcare package. In Republican hands, the filibuster has become a democratic tool waged against the Obama-Reid-Pelosi triumvirate of leftist policies. Republicans would not take such a political risk if they did not believe that the people supported such behavior. As Obama recently pointed out, the voters will decide in November whether these actions are supported.

Additionally, the Republican ‘obstruction’ is a direct result of ideological differences. There is a deep divide between the socialist, European model of the Democrats and the capitalist approach of the Republicans. The Republicans did an outstanding job portraying this at the theatrical Healthcare Summit. Americans are also beginning to realize that there are other options to reform to the Democratic orthodoxy.

Because of these two factors, Republicans have been able to halt the passage of a radical bill that, given the political landscape a year ago, should have been an easy win for the Democrats. The Democrats’ failure was only facilitated by their inability to not hammer out a proposal amongst their supermajority before America realized the ideological flaws on the Left.

However, rather than recognizing this, Team-O is pushing forward at full steam. Their desire to use reconciliation shows not only desperation but a complete disdain for America. It would also be an unprecedented abuse of power as The Wall Street Journal recently opined on. Reconciliation has historically been used on narrow terms and with cross-aisle support.

Democrats often point to welfare reform in 1996 as a reconciliation precedent, yet that bill passed the Senate with 78 votes, including Joe Biden and half of the Democratic caucus. The children's health insurance program in 1997 was steered through Congress with reconciliation, but it, too, was built on strong (if misguided) bipartisan support. The Balanced Budget Act of 1997 that created Schip passed 85-15, including 43 Republicans. Even President Bush's 2001 tax cuts, another case in reconciliation point, were endorsed by 12 Senate Democrats.

The terrifying arrogance of the Left’s leadership is politically unwise. The Democrats will undoubtedly discover this at the polls in November. However, it is also potentially damaging to America. A passage of this bill will have disastrous effects on the healthcare industry, while solving few of the outstanding problems. Even worse, it will encourage further abuse of the parliamentary system for partisan ideological gain.

The State of the Perpetual Campaign

“We can’t wage a perpetual campaign.” So said President Barak Obama in a State of the Union address that was arguably another stump speech in a long-line of campaign speeches. The address was mainly an attempt at resetting his presidency to a time, a little over a year ago, when the President was popular and perceived he had a mandate to govern. Rather than drastically alter his direction, Obama emphasized a number of trends that have been unvarying cornerstones of the past year, namely populism, an anti-Washington sentiment, and the call for more government.

His populist stance was evident throughout the speech. While he admirably accepted some responsibility and admitted to gaffes, he largely played to the misgivings of the masses. He continuously bashed Wall Street and banks, targeting bonuses and the bailout. He said, “[W]e all hated the bailout. I hated it….”  Even while appealing to the grand notion of bipartisanship he attempted to separate ‘the people’ from the ‘elite’ by, for instance, offering an end to capital gains taxes, but only for small businesses.

This populism is rather disingenuous and anti-intellectual, as most populism is, and will only serve to foment fault-lines in American politics. All of America is responsible for the economic meltdown, not just Wall Street. By refusing to indict the average citizen for his mistakes alongside Wall Street, Obama is reinforcing a culture that dismisses personal responsibility.

The second major theme was the continued attempt to portray himself as an outsider to Washington. His repeated mantra was “Washington has been unable or unwilling to solve any of our problems.” It is a time-tested tactic for campaigners to portray themselves as outsiders. America habitually wants new visions and ideas and elected Obama a year ago largely based on this successfully transmitted message.

However what worked during his ‘real’ campaign will largely fall on deaf ears now. After a year in office, Obama is Washington. He said this much when castigating his party for their failures, “To Democrats, I would remind you that we still have the largest majority in decades, and the people expect us to solve problems, not run for the hills.”

Obama’s insistence on railing against Washington is interesting to say the least. It shows that he has yet to fully leave the campaign trail. From his perspective, this should be worrying as America has shown that it does not appreciate this politicking. America wants a president that leads not one that is on the campaign-trail.

The final major theme was his insistence on Big Government. Roughly two-thirds of his speech focused on the economy and rightly so. However, his entire approach of a paternalistic big government saturated his rhetoric. While his healthcare discussion was moderated, his language elsewhere continued the same cadence that drove the healthcare issue during the first year.  A prime example of this misguided economic policy was his discussion on college affordability. He stated:

And let's tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years –- and forgiven after 10 years if they choose a career in public service, because in the United States of America, no one should go broke because they chose to go to college.

Now this sounds noble and, on the surface, profound. After all, every America should have access to college and most understand the heavy load from student loans. However, if one spends a few seconds considering the ramifications of the plan the economics simply fail.

For starters, if debt is forgiven it means someone has to cover the costs. There seem to be three options – the taxpayer, the lenders, or the schools. If it falls on the lenders, well they simply will stop lending. No business will be willing to operate at a loss and so such a plan will reduce available loans. If it’s the taxpayers, well we all know the problems there. If the schools have to shoulder the burden it will reduce the quality of education as schools would be forced to cut programs, salaries, and other expenditures. Alternatively, it would give schools incentives to only admit those who could pay their own way, thereby restricting access to universities (particularly the elite) to the rich.

Likewise, Obama’s plan could create a perverse incentive for individuals to get frivolous degrees. Higher education is an investment in one’s future. While many enjoy learning, a higher degree should generally only be pursued if it offers a positive return. Such a program would encourage people to complete degrees that have little bearing on their career paths. While this is certainly noble and learning is a paramount value, it should not be done at the expense of demolishing our education system.

This is but one example of the administration’s warped economic perspective. Obama, while often pure in aims, far too often attempts to correct the symptoms rather than address the underlying problems. It is economically unwise to expand government in order to force changes in the price one pays without addressing the underlying cost of the product. This backward economic principle only serves to grow government and exacerbate problems.

However, despite the many flaws of the address, credit must be given where it is due. Obama did make a number of strong points and called for some positive changes. First he stated, “We need to make sure consumers and middle-class families have the information they need to make financial decisions.” The flow of information is a principal aspect of free competitive markets and should be applauded. Second, he called for off-shore drilling and the construction of nuclear plants (amongst other proposals) both which will create jobs and promote energy independence. Third, Obama invited both parties to offer ideas for healthcare reform. He stated, “But if anyone from either party has a better approach… let me know.” Hopefully this is not mere rhetoric and the Republicans will take advantage.

Obama has work to do. Hopefully, he can step up as a leader, dismiss the big government, partisan, and populist focus of his administration and end his political campaign. He seems to have learned some lessons from the past year, and particularly Massachusetts, but he is not quite there yet.

Where is Voltaire: Leave Lieberman Alone

Senator Joseph Lieberman (I-Conn.) could not be less popular amongst the Democrats. For obstinately refusing to buy into an irredeemable Democratic healthcare package, Sen. Lieberman has been lambasted by both Democratic leaders and their sycophantic leftist foot soldiers. Lieberman expresses real, genuine concern with the current proposals – specifically the public option and an expansion of Medicare. His refusal to blindly jump on board the faltering plan has earned him much reprobation from his own (former) party.

The attacks, although nothing new, have been, at times, quite vitriolic. A quick survey of the blogosphere yields a steady stream of angry tirades against the Senator. However, this juvenile behavior reaches all the way to the halls of Congress. Recently, Congresswoman Rosa DeLauro (D-Conn.) called for Lieberman’s recall. The inanity of her remarks is palpable.  She most certainly knows that there is no way to recall a Senator.  Instead her ridiculous rant displays a deep-seated group-think mentality. Democrats have called for stripping Lieberman of his chairmanships and other punitive measures. For the current Democratic majority, any dissent is castigated and punishable by banishment [And no, I do not think the Democrats are unique in this anti-intellectualism].

The attacks have not been limited to Lieberman, but also have been directed at his wife, Hadassah.  Liberal bloggers have assailed Mrs. Lieberman, demanding action be taken against her involvement in the Susan G. Komen for the Cure breast cancer charity. This is a disgusting display of political abuse. Why has it become acceptable in America to molest a leader and his family, because of his political differences? Where is Voltaire when he is needed?

Democrats are understandably upset with Lieberman. They need his vote to pass the socialized healthcare package that many on the far Left are salivating over. His refusal has all but eliminated the possibility of such a bill passing. Their quest to force a bill through at all costs has driven many of this bill’s supporters to trample the very democratic principles that supposedly underpin our political system.

Lieberman should be commended; certainly by those on the right who oppose this plan, but more importantly by those on the left who value politicians who think for themselves and vote, not on party lines, but for what they believe is right. Contrary to what many on the Left claim, Lieberman acknowledges that healthcare needs reform; however, he will not be browbeaten into supporting a plan that will do more harm than good, just to appease the political establishment. Once again, Lieberman has shown that he is not, as so many politicians are, a mindless fool, but an upstanding politician who is a true leader.  Lieberman stated:

But like each of them, I had to do what I thought was right… I didn’t run for reelection — and no one here did — asking the voters of my state to vote for me because I would always do what a majority of members of the caucus did, even if I thought some of those things were wrong. None of us would pledge that to our constituents.

It is sad that the best and brightest are often disparaged for refusing to toe the line. In a nation where anti-intellectual populists run rampant, leaders such as Lieberman are a true breath of fresh air. It takes real fortitude to continuously stand against one’s party (or caucus) for what one believes in. Many politicians seemingly cannot handle such dissent, and revert to childish attacks rather than logic and reason. What a sad state of affairs.

The Right Medicine for Healthcare - Part IV: Get 'Em the Money

A final necessary step in healthcare reform is to devise and enable new forms of healthcare financing. Health insurance is not a health-related but a financial issue. Generally speaking, the quality of healthcare in America is quite good. Although there are certainly instances where it could be more efficiently provided, few Americans question the available technological level of American health services or the requisite knowledge and skill of American doctors.

Under the American model, personal financial decisions are left to the individual (or family) to manage. While some base level social-safety nets are provided by the government, the majority of an individual’s financial decisions are left to one’s own planning. Individuals are responsible for saving and spending within their means, as well as preparing for their futures.

Insurance is one model that allows people to remove the financial risk of large, unforeseen circumstances. This is why millions of Americans purchase a wide range of insurance products – from auto, to natural disaster, to life. All of these are financial decisions based on an individual’s relative probability of some event happening, the perceived cost, and ability to pay. In any rational model, insurance should only be purchased if the math indicates that it is financially cheaper.

Health insurance should be no different. It should be one tool, out of many, that Americans can choose to rely upon if financially sensible. A number of new, financial tools should be developed to facilitate an individual’s access to affordable healthcare. All of these can and should be established in the private markets.

One of the current problems with health care provision is nonpaying emergency room patrons. This has sparked calls for a legislative individual mandate, where all Americans are required to purchase healthcare. The mandate, while undoubtedly unconstitutional, is a gross misappropriation of government power. Not only does it invade on the fundamental liberties of American citizens, but it drastically distorts the market. It forces individuals to make unwise financial decisions.

Without a mandate, proponents argue that hospitals have to unjustly bear the cost of these freeloading individuals. Ultimately, these costs get passed on to consumers via higher hospital bills and insurance premiums. This is undeniably a correct assessment of the current system; however, the mandate does little to allocate the costs of health to the appropriate recipient.

This is precisely where new financial instruments can alleviate some healthcare cost issues. Arguably, every individual (except for maybe the most indigent) should be responsible for paying for their own healthcare. This is particularly true for those who, under the current system, can afford health insurance but for personal reasons decide not to purchase any. If some do not buy private health insurance, due to poverty or personal decision, the burden of their health care should not fall on those who made the financially astute decision to invest in insurance.

However, under the current system there are few, if any, methods for those who gambled and lost to pay for expensive procedures. Providing new methods would not only benefit willing financiers (and the economy) but those who decide to opt out of the health insurance path.

First of all, private hospitals need to have greater say in how their emergency rooms treat patients. Within limits, private hospitals should be able to refuse care to individuals who cannot pay. [For instance, I don’t necessarily think hospitals should be able to refuse care if such refusal would lead to imminent death.] Hospitals should have the ability to decide whether they will open their doors to everyone and eat the costs or refuse care to the non-paying. From the hospital’s perspective there would be a tradeoff between cost savings and image. Like many environmentalists who pay a premium to ‘save the environment’, some individuals may feel comfortable paying higher prices to use the services of hospitals that cater to the common good.

Much of this tradeoff, however, could be erased with new financial mechanisms. Hospitals, for instance, should be encouraged to accept credit cards in lieu of health insurance [imagine the frequent flier miles!]. Likewise, hospitals could establish on-site financing departments that provide emergency care funding. Such funding could come in the forms of loans – like mortgage loans – that allow individuals to pay their hospital bills with interest over time.

This would enable individuals to take personal responsibility for their health care and prevent freeloaders from weighing down the rest of the system. It would allow individuals to design financially responsible systems for providing for their own health care. People would be able to choose what the most sensible way of covering potential expenditures, given their health and ability to pay. For instance, young, healthy individuals who want to save or invest extra disposable income could purchase minimalist health insurance policies given the low probability of needing coverage. They would be able to supplement this risky decision with on-site funding in the rare case of disaster.

Naturally, such credit related solutions could have significant impacts on individual’s debt situations. Bankruptcy laws would need to be reworked in order to make financing opportunities appealable to lenders. Alternatively, payment systems can be designed that move away from the fee-for-service model. For instance, rather than purchasing health insurance individuals could buy access to unlimited care at specific full-service facilities. Monthly membership dues – like a gym membership – would give individuals access to healthcare whether they use every specialist or just an internist.

While such proposals will not be a complete panacea, they will help to alleviate some of the issues. More importantly they may encourage people to be more proactive in planning and managing their health and finances. Ultimately, the goal is for each American to be able to pay for and afford healthcare, not necessarily health insurance.

The Right Medicine For Healthcare - Part III: Lower the Costs

The second needed step to reform healthcare is to directly assault certain aspects of the current system that cause excessively high costs. In particular, tort reform, medical record digitization, and realigned incentives are stepping stones that will help alter the healthcare landscape.

Tort reform is one of the most widely discussed and easily implemented solutions. The current legal system leaves doctors overly exposed to frivolous lawsuits and often gargantuan penalties. Many of these litigations go after doctors who made innocent mistakes or procedures where bad results were simply the result of probability. After all, medicine is innately subject to human error. While doctors should certainly be held accountable for gross negligence or irresponsibility, America’s overly litigious society has gone too far with malpractice suits. Lawyers looking for a quick settlement and some spare pocket change are aided by a compliant system in squeezing money out of generally well-meaning doctors.

This has indubitably led to an increase in defensive medicine and higher malpractice insurance costs. Defensive medicine – when doctors perform or require unnecessary procedures in order to protect themselves from litigation – is both expensive and potentially harmful to patients. Likewise, malpractice insurance is extremely burdensome to doctors. Together, these cause patients, both directly and indirectly, to have increased medical expenditures.

Tort reform is a relatively easy fix. According to The Washington Post, such reform would save anywhere from $100 to $200 billion. Litigation can be made more difficult, laws can be more narrowly defined to prevent abuse, and losers could be forced to pay opposing attorney fees. Penalties can also be applied to litigants who bring frivolous lawsuits. By restricting litigation to the truly deserving instances, doctors would be freer to practice safe and cost effective medicine (and even try high-risk procedures that might help some patients).

The second aspect to tackle is the digitization of records. Currently, according to CNN, the lack of digitized records costs the industry some $200 to $300 billion a year. While converting to a completely digital system will have implementation costs, in the long-run it is a clear cut necessity. Currently, the time spent by doctors and support staff in reviewing and transmitting paper documents is completely inefficient.

Not only would digitization impact overhead costs but it would have at least two direct health related impacts. First, it would enable a patient’s doctor to more closely monitor the patient’s health. It would facilitate communication between different doctors and potentially prevent life-threatening mistakes, such as conflicting medications. With digitization a doctor would immediately have a patient’s full medical history, thereby allowing better and more accurate diagnoses. This would not only directly improve the quality of healthcare but would lessen the cost.

Likewise, digitization would supply researchers with a vast wealth of information. With the proper privacy controls in place, such information could help researchers develop new procedures, medicines, and techniques. It would also allow potentially harmful cross reactions between medications and harmful procedures to be rapidly flagged and removed from the doctor’s toolbox. Ultimately, this would allow doctors the needed insight to refine their craft and focus on the most effective and helpful remedies.

The final, and by far the most challenging, aspect is to realign doctors’ incentives. Presently, the fee-for-payment system incentivizes doctors to perform repetitive and often useless procedures. With each test doctors receive more money in their pockets. A payment system needs to be developed that induces doctors to only run tests that are beneficial to a patient.

Harmonizing the incentives for a doctor to perform at his best with disincentives to go overboard is extremely difficult. However, some models already show promise. Institutions, such as the Mayo Clinic, are not only successfully but highly admired. Payment systems that are based on access to an institution’s resources, rather than per procedure can limit unnecessary expenditures. Alternatively, diagnoses can be detached from the testing and curing of illness. For instance, individuals could have one doctor, a so-called coordinator, who would evaluate a patient’s issues and then prescribe certain procedures or tests in which he has no financial interest. The tests and procedures would then be performed by other doctors on a fee-for-service basis. Naturally, legal regulations would have to be made to prevent procedure-doctors from unfairly influencing coordinator-doctors (as many pharmaceutical companies do today).

These three aspects are important steps that need to be addressed in any healthcare reform. While certainly only a start, they deserve far more focus than they currently receive. A solidly reformed system will only be successful by tackling the underlying costs of healthcare in America.

The discussion continues with Part IV: Get 'Em the Money.

The Right Medicine for Healthcare – Part II: A More Competitive Market

Any successful healthcare reform needs to formulate a more competitive health insurance market. A more competitive market will drastically alter the cost structure for health insurance. In order to remain in business, insurance companies in a competitive market will need to drive costs downward. A multitude of new insurance products will be offered which will provide consumers with an array of choices with varying levels of amenity and price. There are at least three ways in which the markets can be made more competitive.

The first, and easiest, step would be to allow insurance companies to compete across state lines. The current, useless restrictions only serve to drive costs upwards. By allowing cross-border competition, the number of insurance providers available to any one individual will immediately increase. Companies will then have to compete with more market participants in order to capture a sufficient segment of the now larger pool of potential clients. This will force insurance providers to develop new types of insurance products and cut their own costs to improve margins.

The second step would be to end the employer-based system of the provision of health insurance. Many Americans currently get their health insurance as a fringe benefit from their employer. However, there are a number of problems with this method of provision. First, those that cannot get insurance through their employer often have to pay exorbitant fees in the private market. Second, health insurance is contingent on employment. When an individual loses his or her job, it becomes a double hit with the elimination (or increased cost) of health insurance. Third, employer provision necessarily limits an individual’s options. Most companies only offer three or four options – all generally from the same insurance company. The individual has little say in terms of picking an option that suits his or her financial and medical needs. Insurance companies therefore only need to offer plans that appeal to a few Human Resource managers, and do not need to offer specialized coverage for unique requirements.

All of these issues can be resolved if individuals or families obtained health insurance on the free market. Like auto, homeowner, or other forms of insurance, health insurance should be an individual’s personal decision. If insurance companies competed for individual policyholders, rather than for corporate HR managers, they would be forced to diversify products to meet individual needs. Insurance policies that ran the gamut from expensive with maximum coverage to limited cost and coverage would be widely available for individual purchase. This would help lower costs as individuals would self-segregate into policies that better meet their needs and budgets [for instance why does a single man need health coverage for an OB/GYN?]. Likewise, entrepreneurial insurance providers will be able to successfully target niche markets that formerly went uncovered.

The end of the employer-based system can be easily achieved through simple legislation. A law that requires employers who provide health insurance to offer an employee opt-out clause would allow individual employees to select their form of compensation. If the individual chose not to receive his employer’s health insurance policy, he would receive the money which the employer would have spent on health insurance. The employee could then turn to the private market to purchase his own policy.

This coincides with the third step: ending tax exemptions for employers. This will further facilitate the transfer from an employer-based system to a free-market system. Not only will this end the incentives for employers to provide insurance, but it will also increase revenues (or allow tax cuts) for the government. Employees will naturally receive higher salaries as their compensation switches from a fringe benefit to direct pay.

All of these steps will facilitate a more competitive environment. Insurance companies will need to compete with a larger number of competitors and for a larger number of potential customers. This will help force costs downward, as only the most efficient and cost-effective insurance companies will be able to survive. Consumers will be offered a wider array of choices, with varying degrees of price and services. Customers will therefore be better able to afford, at least, minimal coverage. A increase in competitiveness would drastically alter the health insurance landscape and promote free-market reform.

The discussion continues with Part III: Lower the Costs.

The Right Medicine for Healthcare – Part I

With the Senate now beginning debate on a healthcare bill, it is time to step back and really think about where America could end up. The bills – and ideas – that are prevalent in Congress are devoid of commonsense. Under the current system of thinking, any bill, such as the current one on the Senate floor will be disastrous.

No one disagrees with the fact that American healthcare is in desperate need of reform. However, the current proposals do not offer good solutions. They attempt to patch a broken system without understanding what is not working. Like a charlatan doctor peddling a homemade cough syrup, they offer the wrong medicine.

The essential problem with America’s healthcare system is cost. Some may frame it in terms of accessibility – too many people do not have health insurance. However, accessibility is, in essence, an issue of cost. People that want, but do not have, insurance are precluded due to prohibitive prices. However, the present top-down approaches advocated by Congress do not address the fundamental cost issues. Instead, they attempt to make healthcare “more-affordable” by redistributing costs between different parties - whether taxpayers, the young, insurance companies, the poor, etc.

Not only is this a divisive and politically-charged (as we all know) approach, but it ultimately will fail to make substantial, lasting change. For instance, if insurance companies are simply forced to ignore pre-existing conditions, they will need to find ways to pay for these more expensive patients. This means either increasing premiums for everyone or lowering services across the board. In essence the current Congressional proposals create a zero-sum game, with clearly defined winners and losers.

What needs to be done is to develop a solid system of proposals that counter the inanity in Congress. America needs a reform that fixes the system and benefits all. The fundamentals of any successful reform rely on the mechanisms of the free market to create a cost efficient system. As Soviet Russia has shown us, centrally planned economies end in dismal failures. Regulatory bodies that determine maximum prices, public-options, individual mandates, and outrageous restrictions on private enterprise will not solve the problem, but exacerbate it.

Over the next few articles I will try to outline a few points that may serve as a rough skeleton for some detailed reform. In particular, (1) greater competition needs to be created between insurance companies by ending the employer based system, (2) medical costs need to be driven downward through tort reform, digitization of records, and realigning incentives, and (3) new financial instruments should be established to cover emergency room visits of the uninsured.

Ultimately, healthcare is a financial not a health-related issue. Insurance is one tool to make healthcare affordable. However, it is not the only, nor always the best way, to pay for healthcare costs. The desirability of health insurance is, and should be, an individual’s decision, based on relative risk and one’s financial situation. By failing to acknowledge and address these issues, Congress is suppressing true reform that could have a lasting impact on America’s future. The government should serve as an impartial referee, not a troublesome participant, in the realm of healthcare.

The discussion continues with Part II: A More Competitive Market.

Back from the Dead - Harry Reid's Public Option

Just in time for Halloween, Harry Reid has raised the dead. Like a zombie from a cheesy horror flick, the public option is now once again roaming the halls of Congress. In a recent announcement, Senate Majority leader Reid stated the newest version of health care legislation would be heading to a vote in the Senate with a government-run public option included.

Setting aside for a moment the foolishness of a public option, Reid’s insistence on including this provision in a plan is utterly baffling. The public option was killed over the summer when Democrats realized the political infeasibility of the concept. The Democrats simply did not have the votes in the Senate to avoid a Republican-led filibuster. The Democrats need every single member of their caucus (58 Democrats and 2 Independents) to agree with the plan in order to push it through without Republican support. The political reality indicated that this just was not possible. If one Democrat wavered the entire plan would fail. And so, wisely the Democrats seemed to move on from the public option. After all, they profess that their real goal is to achieve much needed health-care reform.

Reid’s move to bring back the discussion on the public-option is a step backwards. Nothing has changed to indicate a different political environment. In fact, shortly after his announcement Olympia Snowe, the sole Republican to have voted with Democrats on some health-care related issues, backed off from her cross aisle move. She indicated she would work with Republicans to quash any health care reform that included a public option. Snowe’s rebuke was quickly followed by one from Joe Lieberman – one of the two Independents who caucuses with the Democrats. With Lieberman’s defection a public option is undoable.

So what are the left-wing Democrats trying to accomplish? The inclusion of a public option will sink any reform bill. If the Democrats truly want to reform healthcare, they need to face the reality that it cannot (nor should not – see a prior post on ANR) include a public option. Reid’s gambit seems to lead to nothing but a dead end – torpedoing the Democrats’ and Obama’s crown jewel.

Ironically, it appears that Reid is sabotaging any chance at Democrat-led healthcare reform. One possible explanation is that the Democrats are in such internal disagreement that they cannot design any plan that is amenable to all wings of the party. The tensions between the leftists and the centrists are running high. In order to avoid a failure based on the Democrats’ inability to compromise, Reid is setting up a surefire way to fail that can be pegged on supposed Republican obstructionism. At the end of the day, Democrats will point to the ‘anti-reform’ Republicans who successfully filibustered their plan, rather than their own ranks for the political failure to pass a reform bill. If one is going to fail, at least make it look like it is someone else’s fault.

The Wall Street Journal offers another relatively plausible explanation for Reid’s maneuver. Reid might be offering the plan knowing full well that he will have to drop the public option. The WSJ writes;

He could then tell the left that he did his best, only to have been beaten back to the unreliable likes of Mr. Lieberman….Meanwhile, such endangered swing-state Democrats as Blanche Lincoln of Arkansas could claim they won a great concession if the public option fails, making it easier for them to vote for a final bill that would still do enormous harm to private insurance and the federal fisc.

Reid and his cronies could be trying to push the negotiating grounds leftward in order to achieve a more Democrat-friendly outcome. This is a risky move, but opens an opportunity for Republicans. Senate Republicans should point out the foolishness of Reid’s insistence for a public option. They can easily turn the tables on the Democrats, by branding them obstructionist. How can the Democrats claim to be solving our health care problem if they are offering proposals that clearly are not passable? However, such a strategy necessitates a counter-proposal – something the Republicans have been lacking. A successful Republican-led reform will offer America the right kind of health care fix and deal the final deathblow to the leftist Democrats’ socialist ambitions. Let’s put a nail in this coffin for good.

A Right is a Restriction

The use of the term “right”, as in ‘Americans have a right to…,’ has become watered down and incorrectly used in far too many instances. Generally, a right is a restriction on the authority of the government. By reserving certain powers to individuals, a right limits the strength of the government and prevents abuses of its citizens. However, a right is not an obligation to provide. While governments are, in some instances, obligated to provide certain items, these obligations are not rights. The distinction, while seemingly slight, is an important one that is often muddled in the popular arena.

Rights, as properly understood, are simply a restriction. They offer no direct provision to individuals. To understand this better one only needs to understand the rights enumerated in the Bill of Rights. For instance, Americans have the right to free speech and the right to religion. In the first instance, the right prevents the government from limiting what any individual can say. In the second instance, the right prevents the government from imposing a religion on any individual. In neither case is the government required to provide something to an individual. Other rights, such as the right to bear arms, can be understood in the same way. The right to bear arms is a restriction on the government’s monopolization of power. It prevents the government from encroaching on the personal lives of individuals, by restricting power.

However, many politicians incorrectly use the term ‘right’ to refer to certain things the government provides. Often this language is used in an attempt to expand entitlements and services. By using this language, politicians aim to make the provision of such items unassailable. This use, however, is incorrect when dealing with the rights an individual has vis-à-vis the government.

The ‘right to a minimum wage’ and the ‘right to healthcare’ are two such false rights. The reason these are not true rights is because they require the government to provide a service. A ‘right to a minimum wage’ demands that the government provide the means and structure for an individual to be provided with a certain wage. The ‘right to healthcare’ that is generally discussed when politicians try to cobble together a health reform package essentially demands that the government either directly or indirectly (eg. by establishing a legal system to force the provision from private sector) provides healthcare to every American. Since rights are defined as the restriction not the expansion of government roles, these claims cannot be rights. A properly defined right to healthcare would simply be defined as a restriction on the government not to prevent individuals from purchasing healthcare. Obviously, this is a relatively meaningless right and not what most proponents of a ‘right to healthcare’ discuss.

Civil rights are also an area where this distinction is very often incorrectly applied. Citizens undoubtedly have the right not to be persecuted or discriminated against based on racial, sexual, or other characteristics. The government is not allowed this power. However, civil rights do not mean that the government has an obligation to provide anything to people based on these same characteristics. In fact, if such an obligation existed it would most certainly violate other citizens’ rights (read: affirmative action).

The point of such a distinction is to correctly define the use of the term ‘rights’ in order to better understand the role of the government. Many policies on the left, and some on the right, tend to dismiss this definition of ‘right’ in order to expand the role of government and provide benefits to narrow slices of the electorate. However, by applying such a definition it is relatively easy to come to a conclusion as to the appropriate role of the government.

[As an added caveat the correct use of the word ‘rights’ does not imply that the government has no positive obligations. What is not a right reserved to the people (or states) is often a role for the government to play. For instance, the government has an obligation to protect its citizens from each other (policing) and from external threats (military). This positive action is something the government must provide its citizens. However, it does not mean that such a positive obligation is a right that the citizens possess.]

Not a God - Part II: Obama’s Descent from Heaven

As recent polls, including Rasmussen Reports, suggest Obama’s support is on a steep downward trend. From the beginning of his campaign, Obama has built his own demise into his presidency. As is clearly being seen today, the Obama administration has greatly over promised and severely under delivered. Such a mismatch between pledges given and kept is expected and unsurprising given the near god-like image cultivated by his campaign. The world was promised and for many Obama was viewed as a savior. It is only natural, that given the realities of politics, such promises could not be kept.

Nevertheless, such a relative failure is turning out to be quite harmful for Obama. In at least some circles, the Obama facade is chipping, stripping his godliness and reverting him to a man–a failing man. America is beginning to see Obama for what he is; a politician with ideas, often ideas that do not resonate with the American people. Having fallen from such high regard, the loss of faith in the president is continuing to hamstring his policy objectives and weaken his presidency.

Obama has shown such miscalculation in a wide swatch of policy. While he has always been strongly criticized on foreign policy, Obama’s recent handling of the economy and healthcare and his insertion into the Gates-Crowley affair have proven disastrous.

Having missed the opportunity to fix the national healthcare on a self-imposed deadline, Obama is losing traction in overhauling the system. Successful attacks from the Right have hampered his attempts to hammer through a sweeping change. Furthermore, his own party is severely at odds with him and with each other. But most importantly, most Americans are happy with their current healthcare and see no need to implement the socialist programs that would destroy the private system. If ObamaCare follows the path of HillaryCare, it will destroy much of Obama’s remaining political capital.

Likewise, Obama made a huge mistake with the Gates-Crowley affair. Without reiterating the issue, Obama’s handling of the situation was a disastrous mistake. He inserted himself into a mediator role where no president should be. While his Beer Summit may have humorously corrected for some of his mistake, his snafu was at an inopportune time causing a loss of momentum on more important things on his agenda. It also showed that he is grossly out of touch with America, as some 62% of Americans believe race relations are improving.

As Obama’s presidency continues, he is showing and convincing more and more Americans that he is not the god that was he was portrayed as in his campaign. His human and policy failings are showing through his veneer at an ever increasing rate. This is good news for Republicans. As the saying goes, “The higher you climb, the farther you fall.” Unless he can pull some magic rabbit out of his hat, Obama’s decline will become precipitous. Obama seems to lack the political insights and understanding of policy to do this. The Republicans need to keep chipping away at him and firmly create the modern day Jimmy Carter.

Obama on the Attack and the Destruction of Healthcare

Obama’s artifice and politically motivated smears in his recent comments regarding healthcare are despicable. The President is not only putting undue pressure on an already delicate issue, but using scare tactics for political expediency. His attempts to cram through ‘reform’ and socialize America’s healthcare system are terrifying to say the least.

In remarks given Monday, he launched an all out partisan attack on Republicans. He preyed on emotional fears of a failing healthcare system and attempted to portray the respectably cautious Republicans as pawns of vested interest and the status quo. Obama continued his misguidance on Tuesday, again attempting to portray Republicans as the bad guys.

This is not only unfair, but patently disingenuous. As Obama points out, everyone acknowledges the system is in need of overhaul. However, the current Democrat-led plans are disastrous. Republicans, such as Bobby Jindal, are proposing alternative and better solutions which the Democrats wish to ignore.

The bottom line is that, as discussed here before, the public option is an utter sham. While Obama’s claim that “[i]f you like your current plan, you will be able to keep it. Let me repeat that: If you like your plan, you'll be able to keep it,” might be technically true, it glosses over the economics of the public option. Because a public option ultimately rests on the shoulders of the taxpayers, it can (and will) operate in a grossly inefficient fashion.

Any shortfall in profitability will be picked up by the taxpayer. This will allow the public option to avoid cost reduction. Managers of the public plan will be able to simultaneously undercut private insurers and avoid having to reduce costs. If America is concerned about inefficiencies in the private sector, just wait until the government gets into the business. Obama, with an unequivocal Freudian slip, admitted this: “The reforms we seek would bring greater competition, choice, savings, and inefficiencies [sic] to our health care system…”

It is unfortunate that the Democrats in Congress backed by the increasingly disingenuous Obama feel the need to cram a broken fix upon a broken system. It is even more frightening that they are attempting to cloud the scene with false economics and political sleights-of-hand. What we need is a well thought out, economically efficient plan, that corrects the flaws in the current system. Hopefully, America will wake up and halt the pending utter destruction of our healthcare system before it is too late.

After GM the UAW Should Manage Universal Healthcare

In the 1950s the United Auto Workers (UAW) successfully pushed America’s auto companies into granting the unionized workers free healthcare for life. Sixty years later, in the wake of the collapse of two of the big three automakers, the Obama administration is pushing for near-universal healthcare for all Americans. Hopefully, the lessons of the past will be learned before we find the United States in the same position that the auto companies are in today.

The fact of the matter is that the excessive costs heaped on the auto companies by the UAW’s demands, overburdened the companies and ultimately brought about their downfall. GM and Chrysler were unable to remain competitive due to the expensive cost structure. According to the Economist approximately $1400 of every GM car goes to healthcare costs– far more than its competitors.

The union demands were shortsighted at best. Universal autoworker healthcare seems appealing on the surface. Seemingly, this is why the unions pushed for it in the 1950s. However, by forcing a system that reaped short term benefits, the UAW ultimately hurt itself, the auto companies, and consumers in the end. By greedily taking more than their fair share of the pie, the union bosses put an onerous burden on the autoworkers and auto companies of the future.

The healthcare debate today is running a parallel course. It is easy to think that universal healthcare is a great idea. Helping people stay healthy is noble and caring- two characteristics that are generally applauded in America. However, like the unions of yesterday the Democrats of today do not comprehend the huge impacts such a program will have on the country.

As has been discussed elsewhere, (See a prior post: http://anewrepublican.blogspot.com/2009/06/give-me-healthcare-or-give-me-death.html) a government run, universal healthcare program is inefficient and detrimental to the aim of providing good healthcare. Like GM’s shareholders, America’s taxpayers will unduly bear the burden of an excessive and expensive healthcare program. Like GM, American healthcare will slowly begin a drastic decline in quality. Unlike GM, however there will be no one to bail out the colossal failure to come.

The bottom line is that nothing comes free. Providing ‘free’ universal healthcare is a complete misnomer. Ultimately, it is the taxpayer who will foot the bill (especially in a paygo system). Don’t be fooled by the claims of kindness and caring that Obama and his cronies try to instill in their healthcare plan. It is anything but. Universal, government run healthcare may help a couple of people in the short run, but it’ll hurt America– the taxpayers, the healthcare consumers, and the healthcare industry– in the long run.

Give Me Healthcare, Or Give Me Death?

The state of US healthcare system is atrocious. It is in need of desperate reform. Unfortunately, the Republican Party lacks any coherent proposals to fix the broken system. This leaves the American people with a choice between the current unwieldy system or the big government, nationalized, nearly Socialist plan of the Left.

For years, the Democrats have been proposing state control of the healthcare system. They want to offer universal healthcare to every American on the taxpayers’ dime. While seemingly noble in aim, this is absolutely foolish. Not only will a government system crowd out the private industry, but it will be vastly inferior. As most know, the government does a substandard job at providing services, particularly services that can be supplied by the private sector.

Unfortunately, this is where the discussion stops for most Republicans. The criticisms of the Democrats’ model of universal healthcare are solid and well thought out. However, the Republican’s offer little in terms of a solution to the obvious problems in the healthcare industry.

A relatively clear-cut answer is to fall back on the free-market principles that form the base of American conservatism. While unquestioning defense of the healthcare industry often comes hand-in-hand with criticism of universal healthcare, this need not be the case. One of the bases of free market capitalism is the notion of competition. However, the current structure of the health insurance industry limits competition.

Contrary to other, non-health, insurance industries, the health insurance system is an employer-based system. This severely reduces the number of buyers of health insurance. A health insurance company only needs to pitch its product to a few large companies in order to capture a substantial portion of the market. This forces the insurance company to structure products that will appeal to HR representatives, not the insurance consumer. This limits the diversity of the products offered and gives the insurance companies greater market control. Health insurance consumers can veto bad insurance plans only by leaving their jobs. Certainly, this puts some limits on the downward movement of insurance quality- as competition remains at the firm level. However, it drastically reduces the specialization that would occur if each consumer were responsible for his or her own insurance.

The easy solution is to end the employer based health insurance system. Individuals would be responsible for finding their own health insurance. Companies, since they no longer have to pay for insurance, would increase salaries accordingly. This would leave individuals with the same amount of money as they previously had to purchase health care on the free market. Naturally, many new, specialized products would develop. This would allow individuals to spend more or less based on the type of care and services they want. Insurance companies would have to compete rigorously with each other to capture new, separate segments of the market. All this would lead to greater competition, lower prices, and increased services. Insurance companies that fail to deliver would find a swift exit from the market, thereby creating a marketplace of higher quality companies.

Critics of such a proposal argue that health insurance is far too complicated for the average American to purchase on their own. This, however, unfairly diminishes Joe Six-Pack’s ability to obtain the appropriate information that he would need. The average American is capable of doing their own taxes and finding homeowner’s or car insurance. For those that cannot, or do not want to be bothered, there are a myriad of brokerage services available. It is quite likely that insurance brokers would expand in scope as they aided individuals in searching for the right health insurance plan.

The answer to the health insurance issue is not increased consolidation and government regulation, but a move towards greater free market competition. Government controlled, universal healthcare will only deepen the systemic problems that already exist. A greater number of differentiated healthcare providers will facilitate cheaper, more universal healthcare, without sacrificing the quality of healthcare in America.