Much to Lose in Fixing System

[Steve Stuck]

by Michael D. Tanner

Americans are frustrated with our current health care system and clamoring for reform. This is no surprise in view of high costs, uneven quality, and the millions of Americans without health insurance. But not all change is change for the better. And before we head down the road to a government-run health care system, we need to stop and think about what we stand to lose.

You could lose your current insurance. Are you happy with your insurance? Too bad. Most of the proposals currently being considered, including one by Senate Finance Committee Chairman Max Baucus (D-MT), would mandate that all Americans purchase an insurance plan that contained a government-designed minimum benefits package. You may be perfectly satisfied with the insurance you have today, but if the government bureaucrats didn't think it was good enough, you would have to give up your current policy, and buy the one they wanted — even if it was more expensive or contained benefits you would never use.

You could lose the power for you and your doctor to decide what treatment you will receive. Tom Daschle, the incoming Secretary of Health and Human Services, who is expected to lead President Obama's drive for national health care, has called for the creation of a Federal Health Board with the power to determine what treatments and procedures are "cost-effective."
These standards would be imposed on programs directly funded by the federal government initially, but could be extended to private insurance in the future. He acknowledges that "[d]octors and patients might resent any encroachment on their ability to choose certain treatments even if they are expensive or ineffectual compared to alternatives." No matter — government knows best.

You could lose the ability to spend your own money for the health care you want. Many government-run health care programs limit the ability of individuals to purchase medical services with their own money. The practice exists today, in the federal Medicare program where the government effectively prohibits Medicare beneficiaries from going outside the program to obtain higher quality care or maintain medical privacy.

And many advocates of national health care are opposed to a "two-tier" system under which some individuals could opt out of the government program to purchase their own care.

You could lose your current doctor. A combination of excessive bureaucracy and low reimbursement under current government-run health care programs like Medicare and Medicaid is causing an increasing number of physicians to refuse to participate in those programs. According to the American Academy of Family Physicians, 17 percent of family doctors refuse to take new Medicare patients. A 2006 report from the Center for Studying Health System Change found that nearly half of all doctors polled said they had stopped accepting or limited the number of new Medicaid patients.

You could lose access to the latest drugs and medical advancements. The U.S. has long led the world in medical and pharmaceutical research. Of all the new drugs introduced world wide over the past 30 years, more than half were patented in the U.S. And 80 percent of non-pharmaceutical medical innovations, like MRIs and transplants, were first introduced in this country. But national health care would impose price controls and practice guidelines that would significantly reduce research and development.

A study by the Manhattan Institute suggests that imposing price controls on prescription drugs, for example, would reduce research and development spending by $373 billion, eventually resulting in the loss of 277 million life years.

And, of course, higher taxes. Estimates for the cost of a new national health care program run from $65 billion to $600 billion per year. While this may not sound like much in an era of $700 billion bailouts, it is still money that would ultimately come out of the pockets of hard-working men and women. Nor should we forget that such projections almost always underestimate the cost of those programs. When Medicare started back in 1965, the government thought it might cost as much as $9 billion by 1990. The actual cost that year: $65 billion.

Advocates of national health care frequently try to sell it as the proverbial "free lunch." And, given the problems facing our current health care system, many Americans may feel that nothing could be worse than what we have now. Why not take a chance — what is there to lose?

Quite a lot.

Tanner, Michael D. "Much to Lose in Fixing System." The Cato Institute. January 10, 2009. 16 Jan 2009