With the Senate’s vote this Saturday to begin debate on health care legislation, the most contentious of the Obama administration’s domestic policy initiatives is back in the national spotlight. And with the Senate bill set to follow in the footsteps of its House predecessor by dramatically increasing the government’s role in health care, David Gratzer’s new pamphlet, “Why Obama’s Government Takeover of Health Care Will Be a Disaster,” the first in a series from Encounter Books, could not be timelier.
As a Canadian, Gratzer, now a physician and a senior fellow at the Manhattan Institute, well understands what he calls the “government temptation.” Since youth, he writes, he was taught to believe that Canada’s government-run system was the envy of the world. He learned differently when he attended medical school. Where the Canadian system’s supporters saw success, Gratzer saw rationed care and long waits for important medical procedures.
Not much has changed. In 2006, for instance, Ontario woman Sylvia de Vries had to travel to the United States to have a 40-pound tumor removed by an American surgeon. Although she was within weeks of dying, she was still on a waiting list to see a specialist in Canada. Government-run health care, it turns out, doesn’t live up to its billing.
All the more incongruous, then, that the Obama administration, abetted by Congressional Democrats, has taken health care systems in which government plays a large role as the model for its reforms. Gratzer makes a compelling case that this model is fundamentally flawed. Not only is it wrong in its core assumption that an expanded role for the federal government will improve health care, he writes, but the actual experience of the countries that the administration hopes to emulate argues against any attempt to follow their example.
The Canadian case is instructive. Arguably, Canada does boast the more egalitarian health care system. But that is mostly because treatment options for all Canadians, regardless of economic status, are equally poor. Thus, Gratzer reports that in Alberta, Canada’s wealthiest province, 50 percent of outpatients waited more than 41 days for an MRI in 2008. In Nova Scotia, 50 percent of hip replacement patients waited over 201 days “or longer” for surgery. So limited is access to healthcare that small towns hold lotteries for a dear prize: a visit to a family doctor. For many Canadians, socialized medicine literally is a gamble with their lives.
Defenders of ObamaCare might point out that European systems have done more to inspire the Democrats’ legislation than Canada’s troubled example. But do European systems achieve better results? Not necessarily. In any number of comparisons with European countries, American health care more than holds its own. For instance, Americans are more likely to be treated for chronic illnesses than their European counterparts. They are also more likely to survive diseases like cancer. A 2007 Lancet Oncology study of survival rates for 16 different types of cancer found that American men had five-year survival rates of 66 percent, compared to 47 percent for European men. For women, the numbers were 63 percent for American women and 56 percent for European women.
Nor is it true that the United States spends more on health care than Europe only to get inferior results. Gratzer finds that the costs of health care in France, Canada, Ireland, and Britain are rising at roughly the same rate as in the U.S.
That is not to say that there aren’t real problems with the American system. Most notably, health care has become less affordable. Health insurance premiums have almost doubled since 2000, Gratzer notes, even as American workers have seen their wages stagnate. Unfortunately, the Democrats’ proposals are likely to add to the costs of health care while diminishing its quality and availability.
One way this could happen is through mandates on private insurers to provide specified types of coverage. Such mandates already distort the insurance market. For instance, insurers in Washington and Minnesota must require coverage for “port wine stain elimination”; 12 different states force insurers to cover acupuncture; another 15 states force them to cover in vitro fertilization. For their part, the insurance companies pass on the costs to consumers in the form of higher premiums. Wisconsin has 34 mandates, while New York has 51. As a consequence, a basic plan that would cost around $3,000 in Wisconsin sells for $12,000 in New York.
Another bad idea that risks becoming policy is the government insurance option, versions of which appear in both the House and the Senate bills. Designed to keep private insurers “honest,” the public option would stack the deck in favor of a government-run plan. The House health care bill, for instance, would exempt the government plan from state taxes and regulations; private insurers would enjoy no such advantage. That would allow the government plan to keep premiums artificially low, crowding out private insurers and ultimately driving consumers into the government program. Little wonder than the Lewin group estimates that some 114 million people would shift from private to government coverage if the public option were implemented.
The broader problem with these measures is that they fail to address the high costs that plague the current health care system. Indeed, none of the administration’s reforms addresses the real reason that American health care is so expensive: a tax code that distorts the price of health care. Thanks to a tax break for employer-provided health care, Americans are far removed from the actual costs of health care, paying only 13 cents to the dollar. As Nelson Sabatini, Maryland’s former secretary of Health and Mental Hygiene, puts it: “Using health care is like shopping with someone else’s credit card.”
There are better solutions. Gratzer calls for a national insurance market that would allow consumers to purchase insurance across state lines and drive down costs through competition. He also wants health plans to promote healthier choices. As an example, he cites the grocery chain Safeway, which created a so-called “healthy measures” program that offers workers cash incentives for improving their health, whether by not smoking, reducing their salt intake, exercising more and eating better. Thanks to the pilot program, Safeway has seen no rise in net health insurance costs even as other companies have seen costs soar by as much as 40 percent.
Some of Gratzer’s proposals are bound to be controversial. Even many Republicans are likely to balk at his call to privatize Medicare. But given the unsustainable costs of the program – Medicare has some $89 trillion in future liabilities – its indisputable that eventually something will have to be done.
For now, though, there is the Democrats’ plan to contend with. Gratzer’s final verdict on their efforts is that they have “tried to do too much, too quickly and with too much government.” The good news is that Americans by and large agree. Nearly half of the American public now opposes the Democrats’ reforms, with many believing that the quality of care will deteriorate under the “reformed” system.
The bad news is that Democrats and the Obama administration still seem determined to pass their legislation within the next few months. Gratzer’s pamphlet serves as a bracing reminder of just what that could mean for the country.