Democratic Party Happy Talk on Health Care

Brian Colón, the Chairman of the Democratic Party of New Mexico, and I took part in an online health care debate for the Albuquerque Journal last week. He essentially re-stated his opening remarks in an opinion piece on health care that appeared yesterday in the Journal.

Unfortunately, while Colón is good at providing talking points as to why we need health care reform, he does a lot of writing without actually suggesting any specific ways in which Americans in general and New Mexicans in general can obtain less costly, better health care. This is not a surprise since Colón is not a policy expert, rather he is a party builder, and he may not want to step on any toes. After all, not all elected Democrats support “universal,” let alone single-payer, health care.

Unlike Brian, I have actually proposed some specific health care reforms that will, if adopted, reduce costs and lead to better health care. The problem I have with most advocates of so-called “reform” is that they are working under the assumption that the politicians can get together and Washington and come up with a government system that will please everyone. Unfortunately (for them), as Obama and Congressional leadership have been forced to come up with specifics, the various interest groups have started fighting and the plan seems to be stalling.

The simple fact is that we live in a world of limited resources. While everyone thinks they can get their way when they sit down at the lobbying table, the fact is that someone ultimately loses in a zero-sum game.

Welcome to the New and Improved Errors of Enchantment!

If you have ever been to this blog before, it should be readily apparent that the site has been changed quite dramatically. We have shifted from MoveAble Type to WordPress which I’m told is better and more modern. I certainly think the site’s appearance has been improved dramatically. I’d be interested in your thoughts, so please feel free to leave a comment.

Thanks to our intern Jason Foral and to Pat Riley at Ovationsolutions, our internet provider and technological advisors.

Check Out ABQ Journal’s Online Health Care Debate

This week the Albuquerque Journal is holding an online debate over the various health care issues now being debated in Congress. I was asked to participate along with Brian Colón, the Chairman of the Democratic Party of New Mexico, Todd Sandman of Presbyterian Healthcare Services, Dr. Vicki L. Perrigo, and lefty blogger Barbara Wold.
Check out the first round of questions and answers here. Check back at the Journal’s “City Seeker” blog site to follow the debate all week long.

The “Single-Payer ‘Solution'”

I’ll give him credit, John R. Hall, writing in today’s Albuquerque Journal, knows how to push people’s buttons in support of universal health care. His argument goes something like this: Obama supports it, doctors support it, the American people support it. The only ones who don’t support “universal” health care are the big, nasty insurance and drug companies, not to mention the media. Oh, and by the way, our current health care system is killing us and our babies and free market capitalism is a failure.
Hall has his polling data correct as far as I can tell. Of course, if enough people sell a given product (even socialized health care!) as a cure for all our problems, large numbers of people will begin to believe. Especially when they never see the drawbacks to the system they are being sold. But, Hall is flat out wrong when he says “America’s statistics on life expectancy and infant mortality are approaching Third World standards.” According to this table, we are on par with Ireland, Denmark, Finland, and several other decidedly 1st world nations when it comes to life expectancy and our infant mortality is rate is far better than third world nations, especially when you account for the fact that there are significant differences in the way the nations collect this data which make the US look worse than it really is.
But these two data sets are largely irrelevant when it comes to socialized medicine and the system proposed by Mr. Hall. Can capitalism work in health care? Hall argues that it cannot, but he does not provide a single shred of data as to how socialized medicine will improve our current system. We at the Rio Grande Foundation always provide real, specific, market-based solutions to our problems.
Socialized medicine’s advocates seem to think that the government has magical powers to allocate resources in an ideal manner that will make everyone happy and will do this all in a more efficient manner than exists now — or could possibly exist were we to pursue market-based reforms. Fortunately, even Obama realizes that reality is in conflict with that fantasy. Hopefully political reality finishes the job in killing a drastic move towards further socialization of our health care.

A New Mexico-based Academic Gets it Right on Health Care

Professor Allen Parkman is a Professor of Management at University of New Mexico. In a recently-published opinion piece that appeared in the Albuquerque Journal, he explains in simple, clear detail, why health care costs have spiraled out of control over the years. As he puts it with regards to Obama’s proposed reform of our health care sector, “History suggests that any cost reductions will be hard to obtain and expanded coverage will be very expensive.”
Parkman rightly points to the tax treatment of health care and how it influences consumer behavior as the single most-important flaw with America’s health care system:

On closer scrutiny, the problems with this industry should be viewed differently, as purchases of health care are often inefficient with unnecessary transaction costs. Let me explain. They can be inefficient because consumers are not exposed to the true cost of the services they are receiving and, consequently, the benefits may not justify the costs. In addition, there are unnecessary costs associated with each transaction. In contrast to a simple credit card purchase at a grocery store, health care expenses covered by insurance require additional paperwork for the provider and then administrative scrutiny from the insurance company.
Both of these problems exist because of the inappropriate use of insurance with regard to health care. Normally, we buy insurance to convert uncertainty into certainty. For example, we pay a predictable premium for fire insurance with the understanding that we will be reimbursed if our house burns down. We have converted an uncertain event (the burning of our house) into a predictable event (a premium and reimbursement if there is a fire). Fire insurance is fairly inexpensive — because it is seldom used.

As Parkman concludes, “With more realistic prices, some of the problems facing the working uninsured will be reduced. There still may be a role for the government providing catastrophic coverage for those individuals and families…real health care reform does not come from promising cost reductions and expanding coverage. It comes from making processes more efficient.”

“Reform Health Care, but to what end?”

All too often, those who want to increase the amount of regulations and level of government in the health care sector are considered to be “reformers,” a term generally associated with improving on the flaws of a current, broken system. Several recent articles and letters appeared in the West Side edition of the Albuquerque Journal arguing on behalf of such policies. In my response to these big-government advocates, I argue that moving toward a free market in health care would represent a set of “reforms” that is far more likely to address the flaws inherent in our current system.

Words of Wisdom on Health Care

There have been several opinion pieces in the Albuquerque Journal recently on the issue of health care (such as this one from New Mexico Sen. Jeff Bingaman or this one). That is why it was so refreshing to see this article in today’s paper from a doctor who explains why nationalized health care is doomed to failure.
Writes Dr. Torre Near:

We, as individuals, can do more to improve our lives, but the way the current system is set-up, we have no incentive. The person who exercises every day, is in the normal weight range, doesn’t smoke, has less than two drinks a day and sees a doctor once every two years pays the same as the person who is fat, smokes, drinks, (who’s) exercise is working the remote and (who) sees the doctor every two weeks and is in the ER four times a year.
It doesn’t make sense. We have to change the system, and a national health care plan won’t do that. There have to be incentives to be healthy, just like there are incentives in car insurance to buy a lower cost car, avoid tickets and stay out of accidents.

While the specifics recommended by Dr. Near are somewhat lacking in specifics, there are plenty of ideas in New Mexico and nationally. Hopefully, Congress will kill proposals for government-run or socialized health care and then focus on recommendations that increase individual freedom and personal responsibility in health care.

Sen. Bingaman: Flaws Need to be Addressed in the US Health System

New Mexico Sen. Jeff Bingaman, the only member of the Senate who will have a seat on both committees that are dealing with President Obama’s health care reform plan (Finance and Health, Education, Labor, and Pensions), had an article in Sunday’s Albuquerque Journal in which he laid out what he sees as some of the problems of our current health care system and solutions that he and his Democratic allies in Washington would recommend. So, what of the Bingaman plan? I’ll cite passages and analyze below:
1) “Health care costs are out of control because our system rewards more care, not better care.” Sure, resources in our current system are not allocated in an optimal manner, but Hayek pointed out the information problem more than 60 years ago. Will government do a better job at allocating resources than our current system under which more than 50 percent of health care spending is already done by the government?
2) “Uninsured rates are high, especially in New Mexico.” So, how about reducing mandates or allowing consumers to purchase care across state lines?
3) “We must clearly define what a basic insurance plan must cover. We must also end the practice of insurance companies denying coverage for pre-existing conditions.” I’m not sure where Bingaman gets off telling the rest of us what kind of health insurance options we should be able to choose from, but that mentality seems to pervade Washington and has for years. If I’m a college kid who wants just a catastrophic policy, is that “acceptable?” How about health savings accounts? Also, “guaranteed issue” will dramatically increase prices.
4) “Part of reform is making sure younger and healthier people are buying coverage.” Of course, guaranteed issue will force these younger, healthier people to subsidize those who take less good care of themselves and are older. How do you force these people into the system and is it really fair?
5) “The bill we send to Congress should shift us from a system that emphasizes ‘sick care’ to one that emphasizes prevention.” Of course this is a good idea. Perhaps if we deregulated the system so doctors and patients could contract with each other as one doctor tried in New York, we could achieve some of these laudable goals, but with insurance companies playing such an outsized role, this is not going to happen under any of the plans now under consideration.
6) Bingaman then argues for “Evidence-Based Medicine” but Twila Brase has demolished the case for that particular form of social control under which doctors are nothing more than assembly-line workers taking orders from the state.
7) Lastly, Bingaman argues that we need a “public option” to compete with private health insurance. This simply means that we will move quickly to fully socialized medicine over time. After all, government, subsidized with taxpayer dollars, does not “compete” on an even playing field with industry. Like Fannie Mae and Freddie Mac, the taxpayer-subsidized option has many advantages and will ultimately “crowd out” the competition.

The Canadian Health Care Nightmare

Yesterday’s Windsor Star (Canada) had this article about a young man with cancer and his struggle to get treatment. Among other problems, the patient, Mark Hunt, had to travel four hours to Buffalo rather than Detroit which is right across the river from Canada. Notice, of course, that his only treatment options are in the USA. Big surprise there since Canada’s socialized medical system makes the cost of developing and offering innovative, high-cost treatments too high.
Hopefully our Congressional delegation takes stories like these into account when discussing and voting on President Obama’s “public option” for government-run health care.