Return of 'Hillarycare' wrong prescription

Return of 'Hillarycare' wrong prescription

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This seems like an odd time for politicians to tout government-controlled health care. Less than a decade ago, the Clinton administration was shaken by the negative reaction to its "Hillarycare" proposal for a government medical monopoly. Just weeks ago, Oregon voters overwhelmingly rejected such a scheme at the state level. Advocacy of an idea that has repeatedly earned thumbs-down from Americans looks like an exercise in futility.

But health care costs are growing across the country, as are the ranks of the uninsured, eliciting screams from patients, doctors and employers who foot the bill for much medical coverage. That brings loud calls for a some sort of fix.

So people with a taste for government-monopoly medicine still see an opportunity to advance their cause. Now a state board in Maine is considering a tax-funded health system; the head of California Blue Shield has called for state-provided care; and Rhode Island legislators are studying similar ideas. But government-dominated medicine doesn't just have low popularity ratings with the American public — it has a bad track record in terms of performance, too.

In August 2002, the Fraser Institute, a research organization based in Vancouver, British Columbia, released a devastating comparison of the country's state health care system to plans in several, primarily European, countries. The Fraser researchers found poor availability of doctors and modern technology, long waits, unnecessary deaths and high costs.

The report concluded, "The models that produce superior results and cost less than Canada's monopoly-insurer, monopoly-provider system have: user fees; alternative, comprehensive, private insurance; and private hospitals that compete for patient demand."

In January 2002, the British Medical Journal published a comparison of Britain's National Health Service and California's private Kaiser Permanente HMO which found, "Our overall conclusion is that health care costs per capita in Kaiser and the NHS are similar to within 10 percent and that Kaiser's performance is considerably better in certain respects…"

Tennessee's unfortunate experience with government medicine confirms the findings in other countries. Once touted as a bold experiment in universal coverage, TennCare has foundered ever since. The program ran up high costs, fueling calls for a state income tax — which sparked a grassroots tax revolt.

Tennessee was forced to tighten eligibility requirements and slash coverage.

But the fact that government-dominated medicine suffers from inefficiency and mismanagement doesn't minimize the problems with health care in the U.S. at a time when roughly 40 million Americans are uninsured.

However, while many Americans do go without health insurance, that's not necessarily because it's unaffordable. While the common perception is that individual coverage is expensive, eHealthInsurance, which offers online insurance price quotes, reported in 2001 that the average individual policy costs between $100 and $125 per month — a tab well within the means of many Americans.

Stuart M. Butler of the Heritage Foundation proposes individual tax credits to further improve the affordability of health care coverage to low-income people.

Medical Savings Accounts (MSAs) already let some people put money aside money for health costs the way they do for retirement, with the funds shielded from taxes. Such funds are especially helpful for workers who lose their jobs. Tom Miller, a researcher with the Cato Institute, recommends that Congress expand the pilot MSA program so that it's available to all Americans.

Neither MSAs nor tax credits would address the issue of people who choose to do without coverage, but they would make it increasingly clear that for some people, lack of coverage really is a choice.

But that doesn't solve the problem of high costs. Health care insurance premiums are expected to rise by 15 percent to 20 percent in 2003 — well above the rate of inflation.

Some costs — in particular, those of developing new medicines and medical devices — are partially attributable to regulations and bureaucratic delays that can and should be eliminated.

Then there's America's favorite pastime: litigation. Outrageous jury awards are reflected in high malpractice insurance premiums which have spurred orthopedic surgeons to walk off the job in Nevada, and limit the availability of care elsewhere.

Litigation has hidden costs, too. A Harris Interactive poll recently found that a whopping 79 percent of surveyed physicians order unnecessary tests, while 41 percent prescribe unnecessary antibiotics, in an effort to discourage lawsuits.

Tort reform, such as California's award caps, short windows for lawsuits and inducements for quick settlement, could reduce financial pressure on doctors and patients.

People seeking radical reform might look to the SimpleCare system promoted by the non-profit American Association of Patients and Providers. Under SimpleCare, doctors lower their administration, billing and paperwork costs by dropping all insurance plans. Instead, they bill their patients in full at the time of care, at a reduced rate that reflects their lower overhead.

To be honest, no matter what is done to improve the affordability of American health, some people will fall through the cracks. That's inevitable whether in a market system or under a scheme of tax-supported medicine.

But at their worst, private health care providers must compete for the loyalty of doctors and patients. A government monopoly can force people to pay taxes to support the system — whether they like it or not.

J.D. Tuccille is a Sedona-based Senior Editor of The Henry Hazlitt Foundation's Free-Market.Net (

— Arizona Daily Sun


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