Common Sense & An Open Mind

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    "You must lay aside all prejudice on both sides, and neither believe nor reject anything, because any other persons, or description of persons, have rejected or believed it. Your own reason is the only oracle given you by heaven, and you are answerable, not for the rightness, but uprightness of the decision." T. Jefferson

Archive for August, 2009

Hard questions about health care

Posted by Free to Think on August 13, 2009

President Obama says that overhauling the health care system is “essential to the country’s economic well-being.”

The course this country takes regarding this issue could profoundly affect every American as well as the financial stability of our nation.

Some proponents of Universal Heath Care would have us believe that if you are opposed to a government program, it is implicit that you don’t care about the uninsured. That you don’t care about affordable health care. I believe you’d be hard-pressed to find people who don’t care. How to achieve affordable health care is what’s creating the contention.

If we want to think logically about making these vital decisions, we should ask concrete questions, expect very specific, documented answers from our government, and be willing to consider every side of the argument.

Obama is pressing for final action before the end of 2009. This series of articles will pose some vital questions worthy of thought.

Question 1: If one is a supporter of Obama or of Universal Health Care, does it mean that one should blindly accept the current bill as is?

Question 2: With this much controversy, should it be imperative that all possible repercussions of these measures be investigated with great care?

No matter what your political viewpoint, I’d be surprised if you answers were anything other than 1) no and 2) yes. So…

Question 3: Do we completely understand all the implications of the proposed health care bill?

The problems of our existing health care system have taken many years to develop. No one disagrees that changes need to be made. But what kinds of changes?  Once public policy is established and bills are put into law, they are virtually impossible to revoke. The Obama administration is proposing a bill that runs over 1,000 pages.

According to Obama’s Organizing for America website, Republicans are making false claims that the healthcare bill will explode the deficit and take away people’s right to choose.  Let’s examine the first claim:

Question 4: How will we pay for it? Will there be rationing?

Obama asserts that “Health reform will be deficit neutral over ten years.” We currently face an enormous deficit, a crushing debt, bailout costs, and other increases in spending this administration has initiated. We cannot afford this to be untrue.

Exactly how can we achieve a new government program of this size and scope that is ‘deficit neutral’?

President Obama maintains that with Universal Health Insurance, Americans will take better care of themselves, we will treat less sick people, and the cost of healthcare will drop. That sounds wonderful, and does seem to make sense. But unfortunately there are rules of economics and inherent human behavior that he is disregarding. “Free” healthcare will cost more than if people are in charge of their own healthcare costs.

When something is perceived as ‘free’, the demand goes up. Without a care for the cost, people will line up to get more tests, more procedures, and demand more services. Instead of individuals deciding what’s worth paying for, people will attempt to qualify for everything that they can get. A dermatologist to remove that unsightly mole, a psychiatrist to help with the stress from work. It’s only human nature. Why shouldn’t they? Hey, I pay my taxes, and I know that my pregnant cousin posted 3 separate ultrasounds of her baby on Facebook, so I want that too! By definition, if we aren’t self-regulating, someone out there will be forced to draw the line. We won’t be able to pay for everything everyone wants, always. In other words, instead of common sense dictating people’s decisions, it will have to be some bureaucratic policy that will decide whether you need that preemptive hysterectomy, whether it pays for your grandfather to get heart surgery, a knee-replacement or whatever. This is already a big problem with today’s private insurance.

And who will pay? People in the lowest economic brackets will not be contributing. Under the current proposal, union workers would be exempt from the taxes that would pay for Universal Health Care because, “The reality is, unions are in the position where they are going to get hit the hardest on that tax, and they just can’t change it on a dime like everyone else.”

With cost estimates already as high as $1.6 trillion (and we all know those estimates never measure up to the final costs), that leaves the rest of the taxpayers to ‘change on a dime’ and foot the bill.

Question 5: Have other government-run models achieved this successfully?

People often look to France as an excellent model of government-sponsored healthcare:

France is at the top of the World Health Organization’s ranking for health care, and their statistics in nearly every category are impressive. However, the French themselves admit that their system is slowly bankrupting the country.

Why would the results be any different here than in France, without first trying to determine some of the most significant reasons for runaway costs, both here and abroad?

More questions to consider: If this multi-trillion dollar program will not affect the deficit, how much would taxes have to increase for the average middle class worker to support this program? Will the increase in taxes amount to a lot more than what most people already pay in health care costs, while we still get the coverage we’re used to with private insurance?

That question and more to be explored in the next segment.

Posted in Health care, Politics | 1 Comment »

Why Doesn’t the System Work?

Posted by Free to Think on August 12, 2009

Don’t we need government to control this broken health care system? Hasn’t the free market failed us?

The cost of medical treatment today has risen exponentially, as has the cost of health insurance. How are people supposed to take care of their families?

How did this happen?

Three major factors have contributed to the wild climb of health care costs: the proliferation of malpractice suits, the lack of competitive pricing for medical procedures, and the deficiency in health insurance options. Have solutions to these problems been adequately addressed by our government? Will these issues still exist with Universal Health Care?

1) Malpractice suits

Dr. Stuart Weinstein, with the American Academy of Orthopedic Surgeons, points out that the President has ignored a vital part of the wild acceleration of health care costs: the high price tag of medical malpractice insurance due to out-of-control lawsuits

Besides the exorbitant cost of malpractice insurance, doctors also pass on to the consumer the cost of defending malpractice cases, paying compensation, and covering additional administrative costs. Insurance companies are compelled to waste money on excessive tests that nervous doctors order to absolve themselves from possible suits. When the state of Texas enacted caps on lawsuit awards against health care providers, medical malpractice claims dropped substantially. Costs declined without compromising patient care. Many believe that without torte reform, healthcare reform will be a wasted effort.

2) Lack of competition

Another reason that health care costs have escalated is that, when there is no competition, there is no incentive to lower prices. According to Nobel prize-winning economist Milton Friedman, “The high cost and inequitable character of our medical care system are the direct result of our steady movement toward reliance on third-party payment. A cure requires reversing course, re-privatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes.”

In other words, a major problem with insurance today, be it private or government sponsored, is that you walk into a doctor’s office and order an exam or tests, with no shopping around, no care as to how much anything costs compared with the next medical office down the street. Often the doctor himself has no idea what things costs. Insurance used to be for catastrophic illnesses, but general health care was kept low enough that people like my dad, a housepainter, could afford to pay for his family’s basic doctors visits out of pocket. He knew exactly what it cost, and what his buddy down the street paid his doctor.

3) Few insurance options

Don’t we have a free-market health care system now? Not exactly. A complex tax code subsidizes employer-provided health care, making it impossible for individuals to find comparable insurance on their own. They are barred from shopping across state lines and are then taxed for purchasing their own health insurance.

The average annual increase in inflation has been 2.5 percent while health insurance premiums for small firms have escalated an average of 12 percent annually

As stated by People Over Profits, a grassroots action center, “For more than 6 decades, the insurance industry has operated beyond the reach of federal antitrust laws. The McCarran-Ferguson Act, exempts the business of insurance from the federal antitrust laws. Consumers benefit through lower prices, more choices, and better services.  Why should the insurance industry be treated any differently [than any other trade]?”

Mergers and acquisitions have been extremely prevalent in the insurance industry in the past few decades. As a result, the large insurance companies are getting larger and smaller agencies are being forced to band together in “clusters.”

What are the best alternatives to make healthcare more affordable for everyone?

So, how to resolve these problems? Trust that government control of the industry will create affordable healthcare? But aren’t government-run businesses known for their waste, red tape, $500 nuts and bolts? History shows, both in the U.S. and throughout the world, that free markets are much more effective at lowering costs than are government price controls.  How could this government program possibly be the one exception?

Doctors who are paid by their patients rather than insurance companies, are forced to keep their prices competitive. The statistics prove it: the cost of elective surgeries, paid out of pocket, haven’t risen nearly as much as other surgeries. In a 20/20 segment, Jon Stossel advocates insurance with high deductibles, encouraging people to shop around for the best deals in basic care, but with coverage for serious, expensive illnesses.

Whole Foods Corporation found that by using this type of insurance, their employees continued to take care of themselves, but were smarter with their health care dollars and usually had money left over that they could keep. Insurance plans that work this way cost less. But if we’re tied to the insurance company at work, or a one-size-fits-all national plan, we don’t get that choice.

Positive steps have already been taken. In April, bill H.R. 1583, the Insurance Industry Competition Act of 2009 was introduced by Rep. Peter DeFazio (D- OR), which amends the McCarran-Ferguson Act to make the Federal Trade Commission antitrust enforcement policies applicable to the business of insurance. (

What if Doe’s Discount Insurance had the ability to compete with the big guns, offering competitive prices for the little guy? What if insurance companies charged Joe Blow the same amount for health insurance as they charged Blow Enterprises, Inc. for each of their employees? What if Joe’s employer gave him the option of taking the company insurance, or taking the equivalent cash and finding his own insurance that best suits the needs of his family?

Can the health and insurance industry be reformed to enforce competition instead of putting our government in the health care business? We already have laws and policies that foster fair business practices. Can we employ them the way they’re supposed to be utilized to help bring this system under control?

Will this be enough to help the millions of Americans without health care?

More on that in the next segment.

Posted in Health care, Politics | 1 Comment »