Saturday, March 20, 2010

Health Care Observations

News are now dominated (at least in America) by the upcoming House vote on Obamacare. With Republicans united against it, passage depends on how many moderate or anti-abortion (a key controversy is whether Obamacare will mean federal subsidies for abortion) Democrats will vote for it, and how many will vote against it. I don't know which side will win, but it seems somewhat more likely that Obamacare will pass than that it won't. But regardless of whether it passes or not, it will likely be a close call.

I commented on the issue of the U.S. health care system back in 2007, a post that became one of the most popular ever on this blog. Some of you may not have read it though, and if so (or if you forgot what I wrote) do it here, My conclusion, in short, was that while it certainly can and should be improved,it is a lot better than what Michael Moore and others claim.

Here are a few additional observations

1) There are lots of free market ways to improve the health care system that the Democrats and usually even Republicans ignore. Alex Epstein lists several ideas here.

2) Republicans are hypocrites on this issue, which makes it more difficult for them to stop Obamacare.

The fact is that there is very little difference between the current version of Obamacare (the difference was greater when it contained a "public option")and the health care scheme imposed in Massachusetts by leading Republican presidential contender Mitt Romney (then governor of Massachusetts). The most essential elements of Obamacare in the form of individual mandate, ban on discrimination based on pre-existing conditions and subsidies to low income households were also part of Romney's scheme.

It is true that not all Republicans were in favor of Romney's scheme. But Romney sure was, and so was Scott Brown, who campaigned against Obama's scheme while favoring the nearly identical Romney scheme. Furthermore, most Republicans (with only a few exceptions such as Jeff Flake and Ron Paul) have a history of favoring expanded government role in health care when it is a fellow Republican that proposes it, most notoriously in the case of Bush's expansion of Medicare to include prescription drugs.

3) It's time to remind ourselves what a well known leftist pundit said about what would happen if you had individual mandates without a "public option" (which is to say, what will happen if the current bill passes):

"to make reform work we have to have an individual mandate. And everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies. That backlash was part of what got Obama the nomination! Having the public option offers a defense against that backlash.

What worries me is not so much that the backlash would stop reform from passing, as that it would store up trouble for the not-too-distant future. Imagine that reform passes, but that premiums shoot up (or even keep rising at the rates of the past decade.) Then you could all too easily have many people blaming Obama et al for forcing them into this increasingly unaffordable system. A trigger might fix this — but the funny thing about such triggers is that they almost never get pulled."

And here is a statement from another well known pundit and politician:

"Without a public, Medicare-like option, health care reform is a bandaid for a system in critical condition. There's no way to push private insurers to become more efficient and provide better value to Americans without being forced to compete with a public option. And there's no way to get overall health-care costs down without a public option that has the authority and scale to negotiate lower costs with pharmaceutical companies, doctors, hospitals, and other providers -- thereby opening the way for private insurers to do the same....

...I urge you to make it absolutely clear to everyone you know, everyone who cares about universal health care and what it will mean to our country, that the bill must contain a real public option. Tell that to your representatives in Congress. Tell that to the White House. If you are receiving piles of emails from the Obama email system asking you to click in favor of health care, do not do so unless or until you know it has a clear public option. Do not send money unless or until the White House makes clear its support for a public option."


"Our private, for-profit health insurance system, designed to fatten the profits of private health insurers and Big Pharma, is about to be turned over to ... our private, for-profit health care system. Except that now private health insurers and Big Pharma will be getting some 30 million additional customers, paid for by the rest of us."

Yet, both of these pundits, Paul Krugman and Robert Reich, are now urging the House to pass the bill, even though it doesn't contain a "public option". Perhaps it could be argued that they are now simply choosing a possible improvement as the perfect solution is impossible.

But as these quotes illustrates, they are deliberately pushing for a bill which they know would prop up profits for oligopolitic/monopolitic insurers at the expense of tax payers and the people forced to buy insurance.

By the way, to increase competition, a much simpler way would be to simply abolish the current restrictions on interstate competition.