Healthcare Reform Myths

Parsing the Health Reform Arguments
07/02/09 - WSJ by economist George Newman (via John Stossel)

The common arguments for healthcare reform don't make sense. Here is a list of claims and reponses. Edited.

The American people overwhelmingly favor reform.

People would be happier if somebody else paid their medical bills. But, surveys on quality of care overwhelming support continuation of the present arrangement.

The cost of health care rises two to three times as fast as inflation.

That's like comparing the price of a Black and White 19-inch TV 30 years ago with the price of a 50-inch HD-TV today. Medical care today gives longer life, less pain, fewer exploratory surgeries, and miracle drugs. These things don't come cheap.

Health care represents a rising proportion of our income.

That's true and natural. The richer a society, the greater proportion of income is spent on health, rather than a third television set.

Shifting funds from health care to education would benefit all of us.

Both have steadily rising costs. Curiously, liberals see increasing education costs as an investment, but healthcare costs as a curse. More, past increases in education have not stopped deteriorating outcomes, while the rising cost of health care is associated with clearly superior results. Why shift dollars from where they do a lot of good to an area where they don't?

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Forty-five million people in the U.S. are uninsured.

Many dispute this. Even if true, should we risk destroying a system that serves well the vast majority, to help 15% of the population?

The cost of treating the uninsured is shifted to the rest of us.

On Monday, Wednesday and Friday we are harangued about the 45 million people lacking medical care. On Tuesday and Thursday we are told we already pay for that care. Notice the contradiction.

Further, the cost shifting of the Public Option will be worse than now under Medicare. Suppliers will have to overcharge private plans to make up for the too-low prices forced on them by the public plan.

A universal plan will reduce the cost of health care.

Suppose you are in an apple market with 100 buyers and 100 sellers daily. One day, 120 buyers show up. The price of the apples must go up (and each buyer must get less -ag).

More health care cannot be provided in the short run unless the individual price goes up. If that price is held down, the available services will run out, without any incentive to create more services. Demand does not immediatly increase supply unless the demand is at a higher price.

Individual prices can decrease in the long run as economies of scale and competition create more efficient care. But, the overall expense for treating everyone will go up, unless there is a remarkable breakthrough. -ag

U.S. companies are at a disadvantage to foreign competitors who don't have to pay their employees' health insurance.

This would be true, if the funds for health care in those countries fell from the sky. As it is, employees in those countries pay for their health care in much higher income, sales, or value-added taxes, gasoline taxes (think $8 a gallon at the pump), and in many other ways. This reduces their take-home pay and living standard.

On the even days, liberals want to lift the health care burden from businesses that provide benefits. On the odd days, they want to impose this burden on the businesses that do not now offer benefits. What about the international competitiveness of those companies?

Employers do not pay higher total wages because they pay for the health care of employees. All payments to and for an employee is part of his wage. If employees (or the government) paid for their own insurance, the employer would raise their cash wages due to competition for employee skills. The sales price and profit from a product is determined by overall costs and competition. -ag

If you like your current plan you can keep it.

You can keep your current plan if it is still offered and the company is still around. This is not a silly consideration. Proponents have learned from the Hillary Care proposal in the 1990's that radical transformation does not sell. The current plan provides a framework to take away freedoms one at a time, to minimize resistance, and obscure the ultimate goal.

A century of monopoly by the Post Office shows us how much Congress likes competition to one of its high-cost, inefficient activities. (Private insurance likely will disappear or be made to conform to government rules, standards, limitations, and costs. -ag)

Congress will be strictly neutral between the public and private plans.

Nonsense. Congress has a hundred ways to help its creation hide costs, from squeezing suppliers to hidden subsidies (as with Amtrak).

It has even more ways to bankrupt private plans. It can mandate ever more exotic and expensive coverage, say for hair transplants and sex-change operations. It can limit premiums and outlaw advertising. If all else fails, Congress can increase tax audits and public harassment of executives in the name of leveling the playing field. Finally, the government will announce "The private system has failed".

Decisions will still be made by doctors and patients, and the system won't be politicized.

Fat chance. Funding conflicts between mental health and gynecology will be based on which pressure group offers the richer bribe or appears more politically correct. The closing or opening of a hospital will be based on which subcommittee chairman's district it is in.

We need a public plan to compete with private plans and to keep them honest.

So, the 1,500 or so private plans don't produce enough competition? By extension, housing is just as important, so we should start public housing to keep private builders honest. Oops, we already have that. Think of everything you know about public housing. If you like public housing you will love public health care.

Links

Current Healthcare is Not a Clunker
08/01/09 - InsureBlog by Mike Feehan

10 reasons to refute the notion that U.S. health care system is in desperate need of a government trade-in.

In particular: 5. Lower-income Americans are in better health than comparable Canadians.

USA Healthcare is First - Infant Mortality is Low
Health statistics are intentionally misinterpreted to argue for socialized medicine. The major argument is that the US spends more than Europe, but lags behind in health outcomes. So, US healthcare is both expensive and inefficient. Actually, the USA has better health.

ER Medicine and Bureacracy
The EMTALA law forces hospital emergency departments to treat all patients equally regardless of ability to pay. They must shift these costs onto those who can pay. This produces the amazing $10 aspirin and closing emergency departments. Look for these effects when the government sets too-low rates for everyone on the government health plan.

Massachusetts Limits Health Services
The Massachusetts Commonwealth Care universal health plan is not even three years old. Estimated at $245 million, it will cost taxpayers $1.3 billion this year and require rationing of benefits. Increasing costs and rationed care is typical of any market with mandated care and government subsidies.

Company Paid Health Insurance is Part of Your Salary
Employer provided health insurance is not a free benefit. The employee is paying for it all. The company (rightly) sees the cost of providing health insurance as part of what is paid to the employee. The employee would receive the cash if the employer did not provide insurance.

Hundreds rally for health care reform
04/22/09 - People's Weekly World

Rep. Jan Schakowsky (D-Ill.) is co-sponsor of HR-676, a single-payer health care bill. Some supporters stood outside the hall in protest of the "public option" as an unacceptable compromise. (Unacceptable because it allows for private insurance. -ag)

Rep. Schakowsky answered criticisms from single-payer advocates. She said the public option is not a compromise, but a strategic step toward the single-payer system and the elimination of the private insurance industry.

The private sector is united in opposing any legislation that would expand publicly funded health care over and against the virtual monopoly of insurance companies.

Schakowsky and other speakers said the public option is simply the opening salvo against the private sector.

Goal of Healthcare Reform is to Destroy the Private Insurance Industry
Video, 2 minutes. Rep. Jan Schakowsky (D-IL) spoke at a rally for Obama's healthcare reform on 4/18/09. Transcript, edited:

(0:04) Next to me was a guy from the insurance company who then argued against the public health insurance option, saying that it wouldn't let private insurance compete. That a public option will put the private insurance industry out of business and lead to single payer.

My single payer friends, he was right! The man was right. I told him, excuse me sir, the goal of health care reform is not to protect the private health insurance industry.

(1:23) Those of us who are pushing for a public health insurance option don't disagree with the goal (of a single payer government health plan -ag). This is not a principled fight. This is a fight about strategy for getting there, and I believe we will.