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Know your health care reform propaganda

The attempted grab for control of our health care system has not been hindered by a lack of trash information. People are catching on to this and shooting holes through the case for social health care left and right. If we are to cut down social health care for good it is necessary to diffuse the propaganda that is being floated in the media.

This is a long article. That is to say, it takes more then 30 seconds to read. Spend the time to arm yourself with the truth.

The Plea For Action

The push for social health care started to gain serious momentum when Obama advised us that without action terrorists will kill us without action the economy will collapse without action, health costs will rise. Recent polls have been showing that people were happy with their health care so another justification for intrusion into the industry needed to be invented. To blow our health care challenges into a crisis, proponents of social health care started a round of demagoguery by shouting that there were 47 million uninsured Americans that we had to think about.

However, when former Congressional Budget Office Director June O'Neill parsed the numbers, she found that 43% of the 47 million could afford health care and 13% of the 47 million were illegal immigrants. It is also reported by many sources that somewhere between 10 and 14 million of the 47 million have access to Medicaid but have not signed up.*** The uninsured numbers that have been passed around as a justification for reform are grossly inflated.

To back up their loose argument for a total overhaul of the health care system, proponents of social health care offer the World Health Organization's ranking's of the world's health systems as a justification. The rankings put the U.S. at #37. However, there are major problems with these rankings.

The CATO brief "WHO’s Fooling Who?" does a good job in explaining how the subjectivity of these factors makes the World Health Organization rankings an inaccurate representation of the quality of health care systems:

Those who cite the WHO rankings typically present them as an objective measure of the relative performance of national health care systems. They are not. The WHO rankings depend crucially on a number of underlying assumptions — some of them logically incoherent, some characterized by substantial uncertainty, and some rooted in ideological beliefs and values that not everyone shares.

Continued about the specific factors:

Health Level. This factor can most justifiably be included because it is measured by a country’s disability-adjusted life expectancy (DALE). Of course, life expectancy can be affected by a wide variety of factors other than the health care system, such as poverty, geography, homicide rate, typical diet, tobacco use, and so on.

Financial Fairness. A health system’s financial fairness (FF) is measured by determining a household’s contribution to health expenditure as a percentage of household income (beyond subsistence), then looking at the dispersion of this percentage over all households...

...The FF factor is not an objective measure of health attainment, but rather reflects a value judgment that rich people should pay more for health care, even if they consume the same amount...

...More importantly, the FF factor, which accounts for one-fourth of each nation’s OA score, necessarily makes countries that rely on market incentives look inferior...

...To use the existing WHO rankings to justify more government involvement in health care—such as via a single-payer health care system—is therefore to engage in circular reasoning because the rankings are designed in a manner that favors greater government involvement.

Health Distribution and Responsiveness Distribution. Strictly speaking, neither of these factors measures health care performance, because inequality is distinct from quality of care. It is entirely possible to have a health care system characterized by both extensive inequality and good care for everyone.

The indexes of the World Health Organization's rankings are slanted to make countries with social health care plans look more favorably and countries with market based plans look less favorably. You cannot accurately represent the state of health care in the world by using subjective and ideological benchmarks that don't take practical issues into account.

There are valid reasons to improve our health care systems. There is no need for us to be creative with our facts.

The Free Market Isn't Causing This Problem

Feeling the case had been sufficiently made, one of our favorite talking heads, Paul Krugman, has taken up the lance to drive a social health care option and demonize free market alternatives. "Private markets for health insurance, left to their own devices, work very badly" claims Krugman. He closes stating "unregulated markets don't work for health care — never have, never will". As you would expect, Krugman tries to claim that free markets are responsible for our high health care costs.

He may have had an argument if it wasn't for his prior admission that "the government is already deeply involved, even in private insurance". How can you claim that the market is unregulated while admitting that "the government is already deeply involved"? George Orwell coined a term for this adoption of two mutually contradictory beliefs.

Reality check - the problems of high health care costs in the U.S. have nothing to do with free markets. Our medical industry suffers from mountains of terrible legislation that greatly impedes supply and inflates demand. Here are some examples:

  • Employer health care tax exemptions are imposed as an incentive for businesses to offer health care coverage. The incentives created from this tax policy have overwhelmingly caused people to migrate from direct payment for common health care needs to third party payment insurance plans through employers. Out of pocket health care payments have decreased from 47% in 1960 to 23% in 1980 to 13% in 2004.

    Health care recipients typically don't know - or don't care - what the actual cost of medical care is under third party payment plans. Because of this there are no incentives to restrain consumption and shop for cheaper providers. This market irregularity has caused consumption to increase therefore costs have increased. Employer tax exemptions for employee health care plans need to be removed so we can move back to a system where cost controls have an influence on the market.

  • State licensure laws are imposed as consumer protection against the "incompetence of the practitioners". However, these laws make entry into the health care market extremely prohibitive. The practical result of these laws is that they limit the supply of health care providers and restrict competition from non-physician practitioners which increasing prices. If the availability of medical coverage were increased through the elimination of licensure laws then health care costs would go down.
  • Health insurance mandates require insurance companies or other health plan providers to cover certain benefits. These mandates range from alcoholism to mastectomies and vary from state to state. Currently there are approximately 2,000 insurance mandates.

    These mandates cause the cost of insurance to increase dramatically. Institutions have cited that these mandates make health insurance from 20% to 50% more expensive. Eliminating insurance mandates would immediately reduce the cost of health insurance.

  • FDA drug efficacy regulations forbid new drugs from being sold unless they have passed FDA-approved safety tests. These regulations delay the arrival of superior drugs and increase the costs and uncertainties of bringing a new drug to market. Because of this market barrier many drugs that would have been developed are not.

    Organizations such as the Independent Institute have criticized the policy as the act requires efficacy certification for the drug's primary uses, but does not require certification for physicians to prescribe it for subsequent "off-label" uses. The act, in effect, induces major market barriers that inhibit the drug from reaching the majority of those in need. Yet, the "protections" of the act may be circumvented if your doctor sees an ulterior use for the drug. The benefit from this act is questionable at best.

    Eliminating drug efficacy regulations would allow drugs to reach the market more quickly and would decrease production cost.

  • The regulation of state health insurance is imposed as consumer protection against "volatile" or "abusive" markets. However, the practical reality is that regulation increases prices and eliminates competition.

    Many companies are chased out of business due to the added costs of compliance. In some cases companies are legally blocked from entering the market which prevents state to state competition. Removing state insurance regulations would drastically decrease costs by simply letting insurance companies compete across state lines.

You do have a point Mr. Krugman. Private markets for health insurance do work badly as insurance policies are not a good way to handle all of our health care costs. Why don't you admit that if the markets were really "left to their own devices" that people could afford to pay for most health care costs out of pocket and insurance would be used for what it was intended for; risk aversion against more serious health conditions.

Our health care industry is not even close to the semblance of a free market. The regulations we have been given for our "protection" are the very things that are causing us pain. You would think an individual with a nobel prize in economics would concede that point if he were really interested in the greater good of society. Maybe details are easy to admit when they support your agenda. No person with good intentions could ignore the truth as you do, Mr Krugman. It is almost as if you are a vampire looking to suck the life out of the very system we count on to maintain life. In his defense, what can we expect from the economist that pushed for a housing bubble?

Government Doesn't Compete, It Destroys

With two tons of demagoguery sitting on the free market, it has been argued that a public health care option needs to be implemented to compete with private institutions, as Senator Jay Rockefeller, D-W.Va, said in support of the plan.

"I am all for letting insurance companies compete. But I want them to compete in a system that offers real health-care insurance. I call it a public plan," Rockefeller said.

Earlier this month, Rockefeller introduced the Consumers Health Care Act that would give all consumers the option to participate in a government-run plan competing with private plans.

When someone mentions a government competing in a market I am not sure if the correct response is to laugh hysterically or vomit. By nature the government public plan will have tremendous competitive advantages over private plans.

Where private business depends on funding to finance operations, government has a never ending pool of tax dollars to work with. This means that a government plan will never have to cede market share nor will it have an incentive to work efficiently due to cost limitations. When funding runs out political expedience will justify any action, up to and including price fixing, rationing and increasing taxes.

Taxes, or should I say a lack of taxes, is another benefit the public plan will have over private plans. Taxes on private plans will make them less competitive to consumers. This will allow the government to grab as much of the market as they would like simply by taxation. A public plan would force unattainable sub-market prices on companies until they were insolvent.

There is a strong precedent for this argument. Lew Rockwell recently gave an example of how government has never been a force of competition:

The Post Office has been on the loser list for many decades. Most recently, it has been included on the GAO's high-risk list, increasing its debt to $10.2 billion and incurring a cash shortfall of $1 billion.

Note that the post office is not being shut down for this mess. On the contrary, it is being subsidized not only with tax dollars but, most importantly, with laws. Title 18 (I.83.1696) says that "Whoever establishes any private express for the conveyance of letters or packets" can be fined and jailed. Moreover, the law (39.I.6.606) says that any letter delivered by unlawful means can be seized and stolen by the government. It is immune from antitrust action and criminal liability. You can read the whole Post Office Gosplan here.

If the Post Office were really a market institution, it would go belly-up in about half an hour. So, no, there is no competition here.

There is nothing "market-oriented" about a public plan that does not induce market pressures and there is no competition where the terms of doing business are uneven. A regulator cannot be a competitor. These economic realities will drive private insurers out of business. Americans need to recognize this so that they are not deceived about arguments favoring "government/market competition". By not acknowledging these details, supporters of the public health option hide the fact that it will bully private insurance out of the market. But that is the point, isn't it?

Mr. Limbaugh, Mr. Drudge - look over here! You can argue against social health care without having to twist words or evoke Nazism. You should try that in the future to avoid making the few honest advocates of the free market look like partisan demagogues. If we can show how free markets are the best way to allocate the resources of society rather then fear mongering we may be able to persuade the open-minded from the left and center to join our cause. If you can't maintain that level of integrity then maybe you should try a job within your intellectual capacity.

The Public Plan Will Eliminate Choice

With a public plan in place, most people will be forced into a government program. However, the scarcity of supply we currently suffer from and the inundation of increased demand we would see under social health care would mean that not everyone's needs could be fulfilled. Social health care will necessitate rationing and proponents are admitting it.

Dr. Ezekiel Emanuel, brother to White House Chief of Staff Rahm Emanuel and White House Health Care policy adviser has been one of the proponents of social health care who has talked openly about rationing. He talks about a "just allocation of health care resources" in this Hastings Center report:

This civic republican or deliberative democratic conception of the good provides both procedural and substantive insights for developing a just allocation of health care resources. Procedurally, it suggests the need for public forums to deliberate about which health services should be considered basic and should be socially guaranteed. Substantively, it suggests services that promote the continuation of the polity-those that ensure healthy future generations, ensure development of practical reasoning skills, and ensure full and active participation by citizens in public deliberations-are to be socially guaranteed as basic. Conversely, services provided to individuals who are irreversibly prevented from being or becoming participating citizens are not basic and should not be guaranteed. An obvious example is not guaranteeing health services to patients with dementia. A less obvious example is guaranteeing neuropsychological services to ensure children with learning disabilities can read and learn to reason.

Here he writes about "promoting and rewarding social usefulness" via social distribution in the Lancet journal "Principles for allocation of scarce medical interventions":

Unlike the previous values, social value cannot direct allocation on its own. Rather, social value allocation prioritises specific individuals to enable them to promote other important values, or rewards them for having promoted these values.

Another quote asserting that collective health must be considered over individual treatment from the Journal of the American Medical Association:

The thought is that the more thorough the evaluation, the more intelligent the student or house officer. Trainees who ignore the improbable “zebra” diagnoses are not deemed insightful. In medical training, meticulousness, not effectiveness, is rewarded.

This mentality carries over into practice. Peer recognition goes to the most thorough and aggressive physicians. The prudent physician is not deemed particularly competent, but rather inadequate. This culture is further reinforced by a unique understanding of professional obligations, specifically, the Hippocratic Oath’s admonition to “use my power to help the sick to the best of my ability and judgment” as an imperative to do everything for the patient regardless of cost or effect on others.

This is where most articles would start firing off comments about euthanizing your grandparents as if they were cannon balls. Certainly Emanuel's comments about "just allocation", allocations that reward the promotion of certain values and comments about imposing social justice on the doctor-patient relationship are extremely troubling. It is also important to note the frankness with which Emanuel - a person who has the president's ear on health care reform - talks about central planning. However, if we get stuck on talking about communism and euthanasia the only result we will see is a polarized opposition. If we talk about why central planning doesn't work (i.e. the truth behind the anger) then we very well may persuade open minds.

The reality of our health care challenges is that there is no health care model, private or public, that can offer unlimited medical services while containing costs. Ultimately, such a model will have to either limit access in some way, or face uncontrollable cost increases. The idea of central planning concedes that the demands of consumers will not be met and opts for the former path, rationing. We are currently subject to the latter path, high costs. However, there is an alternative; we can let market forces work by knocking down these bad regulations and supply will more effectively meet demand.

Market forces will provide competition on the supply side by allowing easy market entry for doctors and new medications, allowing competition between insurance companies and allowing insurance companies to create competitive packages. Market forces will induce cost controls on the demand side via incentives to restrain consumption and shop for cheaper providers. Free markets do work - provided they are actually free markets. There is no need to accept defeat and start rationing care.

There Is An Alternative

The final piece of information the government has to push for the public to swallow this fear based grab for power is that there is no alternative. To accomplish this they are using the scientifically proven method of blatantly lying. Here is an example.

WALLACE: Congressman Rangel, I want to pick up on one point that Senator DeMint made, and I want to play for you Congressman Barney Frank, one of the top Democratic leaders in the House of Representatives — what he had to say this week about the public option. Here it is.


REP. BARNEY FRANK, D-MASS.: I think if we get a good public option, it could lead to single payer, and that's the best way to reach single payer. The best way we're going to get single payer — the only way is to have a public option and demonstrate its strength and its power.


WALLACE: Congressman Rangel, here's a top House Democrat saying the Republicans are right, that the public option is a stalking horse for a single-payer government takeover like we see in Britain or Canada.

RANGEL: Well, we've got 435 members of Congress, and I'm — I'm very pleased that Jim DeMint says that he's willing to work with me and other people to get national health insurance.

I don't know what he's got to work with. There is no Republican plan. All they have done is to be critical.

Paul Ryan filed a plan for health care reform over a month ago. While I'm not sure that I agree with the plan totally (or Paul Ryan totally), it does much more to address the actual problems with health care costs. However, the real point is that there are other options besides social health care. We don't need to run around in a frenzy and pass the first measure democrats offer us.

Unfortunately this argument is getting traction despite its lack of reality. I spent some time with friends over the past weekend and the topic of health care reform came up. They were open to my arguments against socialized health care and central planning. However, they criticized public option opponents for not offering an alternative.

Propagation of bad information is a systemic part of the human condition. We are not tuned to fact-check every bit of data that crosses our plate. Supporters of social health care are dropping lies to get good-hearted people behind the public option. It is important to let people know there are other options out there that actually address the real problem.

We Don't Need To Lie To Improve Health Care

We have been able to prevent social health care from being rammed through the legislature. If we act now we can stick a knife in it during this August congressional recess. We must make people aware that forcing change for the sake of change is not a good thing and show them what the "fatal conceit" has done in the past. Above all, we must make make our congressional representatives aware that we prefer reform which keeps choice in our hands and also make them aware that we do not agree with any reform which takes it away.

However, this is not to say that health care can't - or shouldn't - be reformed for the better. To give credit to the advocates of "change" I admit that the study I have done to write this piece has made me realize how much the health care industry can be improved for the good of everyone. We can make health care more available to both the insured and the uninsured.

It seems to me that the "central planning crowd" views the "free market crowd" as ideological cowboys that want to annex the world as Ayn Rand's playhouse. Certainly, there are some examples of this. George Bush seemed to think that being a proponent of the free markets was a principle and not always the best answer. This is the equivalent of believing you should always say "excuse me" to get a person's attention - except when you need to stab them to get it.

However, this just isn't the truth about the free market crowd. Proponents of the free market realize that the best way to serve the common good is to let market forces apply to the scarce resources of society. I hope that proponents of the social plan look at this argument with an open mind. At one point in my life I did just that and it exposed me to the realities of economics that history has opened to us.

I sincerely hope that in the end we come out of this debate with a system that works better for everyone. Until then, I say we take this gentleman's advice for my state.

Now, go call your senators and representatives and tell them you don't support any reform that includes social health care.

*** - I can't find the source of the uninsured candidates who have access to Medicaid figure so be skeptical of this figure. If you find this source please contact me.


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