Ten Taboo Topics in Healthcare Finance

(Some Inconvenient Truths to Consider Before Socializing American Medicine)

Edward Elmer, M.D.

1. Market Freedom. Uninsured (UI) and high-deductible insured (HDI) patients, such as those with Health Savings Accounts, constitute the last vestige of the free market in American medicine. UI/HDI patients and their doctors are relatively free of insurance company or government meddling in their health care. President Obama has proclaimed fervently that monopolistic, single-payer, government-run health care is his goal. If his dream comes to fruition, every last American will become an involuntary client of a welfare-state medical monopoly. A choice of free-market alternatives may still exist in every other American market, at least at first, but medicine will fall under the government-monopoly bus.

2. Market Pricing. UI/HDI patients are more cost-conscious than any government payer, because such patients still make their own decisions about the necessity and cost of medical treatment.  I have never yet treated a UI/HDI patient who didn’t ask two questions, namely, (1) is it really necessary, and (2) what will it cost? In my practice, I can usually offer UI/HDI patients the same quality of care for lower rates than all other patients, whether privately or publicly insured, since I do not have to deal with the immense burden of billing, documentation, “compliance,” etc., imposed by private or governmental third parties. UI/HDI patients naturally apply the rational, efficient principle of pricing, a principle which is distorted or eliminated in the rest of the healthcare market.

3. Rationing. Under a monopoly government system, both medical and non-medical decisions will ultimately be subject to the cost-cutting whim of some bureaucrat. Depending on bureaucratic caprice, some patients will win and some will lose. Every medical decision has the potential to become a political football. Americans will discover they have to wait months rather than hours for an MRI, and years rather than days for elective surgery, but it will be too late to undo the legislative damage by then. Young, healthy, and influential patients, such as celebrities and politicians, may live and thrive, at least for a while. Patients requiring expensive care, such as the elderly and disabled, will be encouraged to die, for the good of the collective. Expect Death Panels and perhaps even a Death Czar. The keen insight in Adam Smith’s Wealth of Nations remains unequalled:

“It is the highest impertinence and presumption, therefore, in kings and ministers to pretend to watch over the economy of private people, and to restrain their expense… They are themselves always, and without any exception, the greatest spendthrifts in the society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of the subject never will.”

4. Coercion. Government exists to compel and to exert forces beyond the power of individual citizens. George Washington’s warning about government is timeless: “Government is not reason. It is not eloquence. Government is force; like fire it is a dangerous servant -- and a fearful master.” Do Americans really want government monopoly healthcare, which is motivated neither by voluntary exchange or charity, but rather by compulsion?

5. Quality. The efficiency and quality control problems of government “services” are legendary. When the service is a relatively minor one, such as mail delivery or issuance of driver’s licenses, the corresponding irritation and risk to the consumer is merely fodder for quips about postal inefficiency and aphorisms such as “good enough for government work.” However, monopoly government health care raises the stakes immeasurably; the inevitably shoddy, sluggish service will kill some customers and enrage many more.

6. Ruinous Expenditure. This is an unavoidable consequence of universal government coverage. Zero- or low-deductible insurance for common events, such as routine health care, leads to overuse, undersupply and skyrocketing premiums, regardless of whether the insurer is a private or governmental entity. Once the American health care sector is nationalized, the Federal government will incur liability for billions of formerly private transactions between providers and consumers of health care. Expenses in the trillions will be required to satisfy the public clamor for first-dollar-care expectations of 300 million Americans. Huge new taxes are inevitable, as in all other countries with socialized medicine.

7. Established History of Government Failure and Crisis. The two largest Federal health programs, Medicare and Medicaid, have distorted markets and bred failure for more than forty years. Taxpayer costs continue to escalate, despite cuts in provider reimbursements to below-market rates. Providers are either forced to drop out of the Federal programs or shift costs to non-Federal payers. Patients in the Federal programs are alarmed by an apparent scarcity of providers; patients with private insurance are alarmed by cost increases; more and more patients opt for no insurance at all, thereby intensifying the perceived crisis for all patients.

8. Compounding Failure. Federal legislation is incapable of solving the current crisis in healthcare finance; the current crisis was caused by decades of misguided federal legislation, which has burdened what remains of private medicine to the breaking point.

9. Tyranny. The actual goal of the so-called Washington reformers, as usual, is never the stated goal. In the current health care example, the goal is not universal coverage, but rather universal control. Grandiose legislative proposals for health care “reform” are nothing more than bureaucrat porn, a high for the power-hungry, and steroids for the Washington beltway crowd. With monopoly Federal control over health comes immense power, and thence the inevitable corruption which concentrated power breeds. Gibbon’s description of the Roman Emperor is instructive:

”[T]he empire of the Romans filled the world, and when the empire fell into the hands of a single person, the world became a safe and dreary prison for his enemies. The slave of Imperial despotism, whether he was condemned to drag his gilded chain in Rome and the senate, or to while out a life of exile on the barren rock of Seriphus, or the frozen bank of the Danube, expected his fate in silent despair. To resist was fatal, and it was impossible to fly. On every side he was encompassed with a vast extent of sea and land, which he could never hope to traverse without being discovered, seized, and restored to his irritated master. Beyond the frontiers, his anxious view could discover nothing, except the ocean, inhospitable deserts, hostile tribes of barbarians, of fierce manners and unknown language, or dependent kings, who would gladly purchase the emperor's protection by the sacrifice of an obnoxious fugitive.”

As if Internal Revenue Service tyranny weren’t enough, imagine the added opportunities for tyrannical abuse when a President and his minions can access the most intimate health data of every American citizen.

10. The Painful Cure. The solution to the current health care finance “crisis” is simple, though considerable political willpower is required, and the opposition may be insurmountable. All Federal interference in health care finance should be terminated as soon as possible. Deafening screams will issue from Washington, since the big-government politicians and bureaucrats who got America into this mess have everything to lose, but patients and doctors will benefit from restoration of personal liberty and sane medical economics.

Dear Congressman ______________:

I am writing to express my strong opposition to HR 3200 (“Obamacare”) or any similar government takeover of the U.S. healthcare system. This proposed legislation would force a nightmarish, socialist, un-American system upon all Americans and nationalize healthcare, which is one seventh of the American economy. More specifically, Obamacare would (1) withhold care from the disabled, (2) withhold care from the elderly, (3) promote euthanasia, (4) promote taxpayer funded abortion, (5) ration expensive procedures, such as joint replacements, (6) ration expensive diagnostic tests, such as MRIs, (7) ration expensive treatments, such as dialysis, (8) ration expensive medication, such as life-saving chemotherapy, (9) destroy the private health insurance industry, (10) force massive taxation on a struggling economy, (11) eliminate Americans’ freedom in healthcare choice, (12) wipe out future advances and research in medicine, (13) explosively increase the burden of government, and (14) discourage future training of doctors, nurses, and other healthcare providers. Congressman, if Obamacare is the wonderful system which the President and the Washington power elite claim it is, why do these elites refuse to be covered by Obamacare themselves? Will YOU accept Obamacare as your sole source of health coverage, Sir? Or will you join me and the vast majority of your constituents in rejecting a system which presumes to tell us whether we can live or die?       Sincerely,

July 30, 2009

Here’s a proposal for “healthcare reform” which would provide instant coverage for every uninsured person in America:

“It is hereby enacted that any bad medical debt, incurred in a given year and computed at the prevailing Medicaid fee schedule rate, shall be applicable as a dollar-for-dollar credit on the creditor’s Federal income tax return for that year.”

This single-sentence legislation offers the following impressive benefits:

1.   No additional, byzantine, costly Federal agencies or regulatory boards need be created.

2.    The current economic crisis demands a reduction in wasteful Federal spending. A tax cut of this sort is just what the doctor ordered, in contrast to the current madness of increased Federal “stimulus” spending and increased taxation.

3.    The toxic trend toward Federal interference between patient and doctor is halted.

4.    Current “healthcare reform” proposals would still leave millions uninsured. This new proposal would immediately cover every uninsured person who is incapable of paying a healthcare debt.

5.    The rate of medical debt bankruptcies would be drastically reduced or eliminated altogether.

6.    Private insurance would not be destroyed.

7.    The inevitable rationing, scarcity, fraud, abuse, abortion and euthanasia incentives in single-payer governmental health care would be avoided.

8.    A strong charitable incentive would be restored to American medicine, since this legislation basically offers a charitable deduction for charitable care.