French Socialized Health Care Struggles

August 11, 2009

France is experiencing problems with its government run health care program. Similar problems may plague a US system if Obama’s health care reform plans are passed

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Working Backwards

August 11, 2009

This story discusses the challenges faced by Britain’s pension fund.  Increased life expectancy and the over regulation of private pension plans means fewer Britons will be receiving pension funds.

Britain’s situation is similar to that of the United States Social Security program which is expected to go bankrupt within 50 years.

America would be wise to look at the problems faced by European social democracies when crafting social policy in the US.


Health Care: Not a Right

June 24, 2009

As the debate over health reform intensifies, expect lawmakers to muddy the waters by declaring health care a fundamental “right”.  If health care is a “right” then lawmakers will be able to argue that it is necessarily mandated by law—thus opening the door for universal government health care.

Health care, in America, is not actually an explicit right afforded to the general population.  The “right” to health care appears in only one place in America’s governing documents, including the Bill of Rights.  Under Amendment VIII, health care must be provided to federal prisoners.  The creators of our government believed withholding care from the miscreants of our penal system constituted cruel and unusual punishment.

It is fitting that government health care is only provided to prisoners.  If health reform of the current vein is allowed to pass, Americans will find themselves prisoners to an inadequate health system.  Americans will soon find that they have no rights and no choices—just like prisoners.

Government health care plans are “effective” because they monopolize purchasing power and generalize services.  In other words, they force participants to accept common generic services, and achieve savings through quantity and price controls.

In order to achieve the savings politicians crave, the government will need to be able to purchase services en masse.  This in turn requires that as many people as possible participate in the federal program.  Since no private insurer or service provider will be able to compete with the massive purchasing power of the government,  the private health industry will inevitably crumble and the socialization of American health care will be complete.

If this progression seems inevitable, that’s because it is.  However, it is not the only choice available.  Many critics believe that the free-market approach to health care has failed.  That assumption is categorically incorrect.  The U.S. health system is plagued by numerous bureaucratic hurdles and regulations which automatically remove the term “free” from the health care market.  Repealing regulations, shifting the responsibility for care to the states and the individual, and pursuing information technologies which can educate the consumer may provide a cost-effective solution, and render government care unnecessary.

Once the government assumes control of an industry it is notoriously difficult to roll-back the infectious meddling of the federal bureaucracy.  While the government has the power of guns and laws on its side, the citizen has the increasingly potent power of voice.

Americans have the unique ability to buy the services they need, and the services they are able to afford—it is this aspect of American health care which draws foreign dignitaries and celebrities to American clinics, and distinguishes our system from the socialized forms of medicine found in Europe and elsewhere.

Health care is not generic; there is no set group of services for every man, woman, and child.  The right to choice is fundamental to America’s adherence to the principle of liberty.  American citizens have the liberty to pay and choose services that fit their own lifestyles, not those of their neighbors.  As the health care debate moves forward, Americans should remember that the Constitution was drafted to protect citizens against tyranny—tyranny of majority or minority, and the accumulation of power in any given entity.


Obama Care: A Breakdown of the Savings

June 15, 2009

Barack Obama has begun “outlining” his health care reform plan ahead of what many Washington insiders see as a messy health care fight this summer.

The Obama administration claims to have found $950 Billion dollars in savings over 10 years which will pay for health care reform. Six-hundred billion in “savings” will come from increasing taxes on those making $250,000 a year, closing tax loop-holes, and increasing government service fees.

This savings plan is flawed because A) $250,000 is not actually that much and B)  as Americans saw during the election, many of those who make $250,000 are small business owners.  Obama has promised to tax business owners who do not provide the type of health insurance the Government wants.  The outcome?  Damned if you do, damned if you don’t–either way you will be taxed.  This plan will be particularly detrimental to small businesses.

$313 billion in “savings” will come from reducing payments to hospitals, medical equipment manufactureres, and laboratories.  These entities will have to make due with the restricted funds doled out by the government.

$110 billion in “savings” will come from efficiency improvements.  I am curious how hospitals and health providers are going to be come more efficient when funding for laboratory research is going to be cut.

$106 billion will come from reducing “disproportionate share payments” which are the payments the government makes to hospitals with large numbers of uninsured.  This portion of savings is particularly skewed since those who are uninsured disproportionately use more services because they are low-income high-risk patients.  Providing them with government insurance will not necessarily reduce the cost of treating them.

In Obama’s Weekly Address he stresses that health reform will keep American firms competitive and reduce “yawning” budget deficits.  A government-run health plan will provide neither of these outcomes.  Firms will remain at a competitve disadvantage because taxes will rise to fund the government program, and deficits do not seem to concern the Obama administration, nor will they be reigned in unless the government inserts itself in the market to control prices.

Health care reform is necessary.  Individuals need to become responsible for their health care, and businesses need to be disassociated from the health care market.  One option in particular provides both of these features; Health Savings Accounts.  There is no part of the constitution which says the government has a role in providing health care. The Obama administration would serve the public well if it considered all the options–free-market measures included.


Nancy-Ann DeParle: Health Care Lobbyist

June 13, 2009

Obama Health Care Czar Deparle paid $5.8 million by Health Care firms.

Appointed by Obama, DeParle represents just the type of insider Obama said would not be included in his government.  She has yet to excuse herself from matters which will affect her former firms.


Health Care Reform

June 8, 2009

HHS Secretary Backs Public Health Insurance

There are a few important points to take from this Wall Street Journal article.

1.  Sebelius says,  “In many areas in the country, the private market is monopolized by one carrier.” This is misleading.  The McCarran-Ferguson Act of 1945 allows state governments to regulate the business of health insurance.   While “monopolies” may exist in many markets, it is not because of lack of competition; in actuality, the over regulation of an industry prevents small start-up firms from competing.  Instead of implementing a massive new government program which will cost billions, if not trillions of dollars, law-makers could rescind the McCarran-Ferguson act and open up markets to free-market competition.

2.  Ms. Sebelius says  “A new public health insurance plan would benefit consumers by …holding down costs.” Historically, public health insurance has failed to curb cost growth. Both federal health plans–Medicaid and Medicare–experience cost growth similar to private sector cost growth.

Over 16% of the U.S. GDP is spent on health care, double the amount of other industrialized countries.  Implementing a new government health insurance program does not seem like a viable method of providing health care.  A new insurance program would likely result in healthy individuals–the majority of the population–paying for the less healthy.  Additionally, if an individual is not responsible for their own health care costs–i.e. they get free health care on tax-payer’s dollars–there is little incentive to use services wisely.

Fooling citizens into believing the only avenue for health care reform is through the federal government is treacherous policy.  There are many free-market options which promise to lower costs; Health Savings Accounts, HMOs, and Regulatory reform are a few such solutions.  Additionally, America needs to rethink the way it provides care.  Reform focused on preventive medicine and public health campaigns could reduce unnecessary surgeries.

The problems are many, but the best course is to engage in a robust discussion about all the options.  Misleading the public into expanding the federal bureaucracy unnecessarily is dishonest.