The Health Care Power Grab and the GOP

The Congressional wheels are turning to give us a government-run health care system before year's end. Everything the Obama administration is planning seems to threaten to smother what is left of our liberty, squander our prosperity, and lay us prostrate before our enemies abroad. The health care issue is no exception.

George Will argues that the President, like his party, has a "dependency agenda" ("The Stealth Single-Payer Agenda," Washington Post, June 21, 2009).

Why does the president, who says that were America "starting from scratch" he would favor a "single-payer" -- government-run -- system, insist that health-care reform include a government insurance plan that competes with private insurers? The simplest answer is that such a plan will lead to a single-payer system. ... The party of government aims to make Americans more equal by making them equally dependent on government for more and more things.

Will brings out the dishonesty in President Obama's rationale's for this government initiative: competition for a system with 1300 providers competing with each other, and coverage for the 45 million uninsured, almost all of whom are either illegal aliens or could get coverage if they wanted it, whether by enrolling in an existing program or just buying it. Yuval Levin and William Kristol expand on this in "Dare To Defeat ObamaCare." President Obama said recently: " One of the options in the exchange should be a public insurance option...[because] if the private insurance companies have to compete with a public option, it will keep them honest and keep prices down."

Levin and Kristol point out what should be obvious to everyone.

It's an interesting statement. We had thought that the role of government was to set rules for honest private competition, which does keep prices down and improve products. And there are reforms that could improve the important rule-setting role government should play, and could increase private competition and transparency. But Obama wants government to be one of the competitors--in the alleged interest of honesty and price reduction. When has a government alternative produced these results?

Consider where this argument leads. Why not a government bread company to keep food prices down and keep food producers honest? Why not a government construction agency to keep home prices down and home builders honest? Why not as parallel government auto industry? Oh, but we have one of those. And a financial sector too. Obama's deceitfulness is disheartening, but only to those who expected better from him.

The Obama plan is so shrouded in terrors that not only does no Republican support it, but several Democratic Senators have positioned themselves against it, and it is opposed also by the American Medical Association, the American Hospital Association, and AHIP, the association of insurance providers.

If ObamaCare fails to pass, Levin and Kristol see then a window of opportunity then opening up for a market-based Republican alternative, one this is more consistent with and even supportive of American liberty.

Karl Rove lists many of these criticisms of the government's health care reform proposal in "How to Stop Socialized Health Care: Five arguments Republicans Must Make." Above all, he says, the power grab would be irreversible. In "ObamaCare Isn't Inevitable," he shares the results of a Resurgent Republic poll that shows Americans generally satisfied with their health coverage, and suspicious of a government run health system and the significantly higher government spending that would attend it.

Americans are increasingly concerned about the cost--in money and personal freedom--of Mr. Obama's nanny-state initiatives. To strengthen the emerging coalition of independents and Republicans, the GOP must fight Mr. Obama's agenda with reasoned arguments and attractive alternatives. Health care must actually be an issue that helps resurrect the GOP.

This leads us to Regina Herzlinger's paradoxically titled article, "Why Republicans Should Back Universal Health Care" (The Atlantic, April 13, 2009). At first glance she seems to be making her peace with some form of government run health plan, but in fact she merely shows how the Republicans can pitch a market based system as universal coverage--and do it truthfully--and save the country at the same time. "With one brilliant foray, Nixon converted the massive threat posed by the isolated China into an asset, secured a favorable mention in history, and stripped the Democrats of a key issue. By embracing their own brand of universal health coverage, Republicans can do the same."

The health insurance system is approaching crisis proportions.

• "millions distort the efficient allocation of labor in our economy by opting for jobs in dying, big companies that offer health insurance, rather than productive ones in small companies that do not."

• "our employer-based health insurance system forces American businesses to pack our massive health care costs ... into the cost of their exports, a huge albatross in a globally competitive economy"

Though most Americans want a better system, and employers would love to be free of the responsibility for providing and paying for employees' health benefits, the public nonetheless has "substantial concern about the Democrats' reliance on universal coverage through a government-controlled system like Medicare." In view of the cost of a government-run, Medicaid style program, the public is also concerned about the inevitable rationing of services. Herzlinger points out that, "the truly sick constitute only 20 percent of health-care users, but account for 80 percent of health-care costs," and so the sick are "a politically vulnerable target for cost control through rationing."

In addition, either doctors will flee the country or people who would otherwise become doctors will choose a more lucrative profession, leading to a doctor shortage and waiting lists for everything from general practitioners to surgery.

There will be far less money for research. "Venture capitalists will find it too risky to invest in markets where one payer controls prices."

So Herzlinger tells the GOP to seize the opportunity to "offer a consumer-controlled universal coverage system, like that in Switzerland."

• "the Swiss choose from about 85 private heath insurers"

• "the Swiss poor shop for health insurance like everyone else, using funds transferred to them by the government"

• In that system, "The sick ... pay the same prices as everyone else in their demographic category"

The bottom line: "This consumer-driven, universal coverage system provides excellent health care for the sick, tops the world in consumer satisfaction, and costs 40 percent less, as a percentage of GDP, than the system in the US."

For more on Herzlinger's efficiency producing, consumer driven, liberty oriented proposal, see my post from February 2008 on Herzlinger's books and her address at The King's College, "Hope for the Health Care Mess."