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We Can Have Affordable Health Care
by Jarret B. Wollstein
Affordable medical care is now a major concern for most Americans.
Nearly 80% agree that our "health care system is headed toward a crisis because of rising costs."
In the last five years, the cost of health insurance has increased
over 2½ times faster than inflation. But if you don't have health insurance, you risk bankruptcy
if someone in your family has a serious illness or accident.
Consequently, many of us face agonizing choices: How can I pay for
medical care and still provide for the other needs of my family? Can I accept a new job if it means
losing coverage for a pre-existing condition?
As a solution, Bill and Hillary Clinton have proposed government
health alliances and health care taxes – in effect, nationalized medical care. And many states
are also considering their own form of government medical care, particularly a "single-payer" system,
like Canada's.
But how well would government-run medicine really work? We can learn
from the experience of Canada, England, and other countries that have had national health insurance
for decades.
The Worldwide Failure Of National Health Insurance
According to Michael Walker of Canada's prestigious Fraser Institute,
the claimed administrative cost-savings in Canada are an illusion: "The Canadian system controls costs
not through efficiency, but by rationing health-care delivery."
Long waiting lists and chronic shortages of equipment and services
have resulted in waits of up to 4 years for elective surgery. The delay for coronary bypass surgery is
now nearly 6 months. Overall, there are now 250,000 Canadians on waiting lists for government-approved
operations – and 45% say they are in pain.
Britain's National Health Service also "controls" costs by rationing
care. According to the National Center for Policy Analysis, over 1 million Britons are now on waiting
lists for operations. For those over 65, nearly half of government hospitals refuse to provide kidney
dialysis. Over 9,000 elderly people a year die because they're denied dialysis.
In every country with government-run medicine, the elderly and
severely ill are treated like a drain on society and given the minimum possible care. In Sweden, "the
delay for coronary bypass operations is more than a year, during which time 30% of the patients will
die." [Private Practice, April 1989] In Italy many people now die because of a shortage of
beds in government hospitals. [Washington Post, 4/4/94] In Germany, "free" government medicine
is used only as a "last resort."
A government takeover of medicine has made conditions worse in every
country in which it's been imposed. But how else can we control costs?
Four Reasons Why Medical Care
Costs Too Much in America
- Few of us pay our own medical bills, so we have little
incentive to economize or comparison shop. Ironically, a key reason why Americans spend too much on
medical care is that for individual consumers, medical care costs too little.
Eighty-seven percent of our medical bills are paid by insurance companies.
That means there's little incentive for patients or doctors to restrain their consumption of medical
resources. As patients, we seldom ask how much a medical procedure costs, or turn down suggested tests
for treatments.
Over 50% of us also receive government medical care "entitlements" –
such as Medicare and Medicaid. Again, someone else pays, so we don't care how much it costs!
- Federal regulations and state mandates. According to the Pharmaceutical Manufacturers'
Association, it now costs $359 million and takes 12 years to get a single new drug approved
by the FDA. The introduction of some life-saving drugs – which have long been used safely in
Europe – have been delayed for years or decades. FDA delays on just one drug – Propranolol,
used to treat angina and hypertension – resulted in at least 30,000 avoidable deaths.
Insurance companies are also forced to comply with over 800 state medical mandates. These include forcing health insurers to cover toupees, psychiatric services, and teeth-whitening. Although these mandates provide additional income for toupee
manufacturers, psychiatrists, and dentists, they increase the cost of health insurance
enormously for everyone. The Heartland Institute estimates that eliminating state mandates would cut
medical insurance costs at least 30%, making medical insurance affordable to tens of millions of
uninsured Americans.
- Medical Licensing. US doctors are among the most regulated in the world. The declared
purpose of medical licensure is to assure quality medical care. But the actual effect has been to
drastically limit the number of doctors and greatly increase the cost of medical care.
- Our Litigious Society. Unfortunately, present laws and the attitude of judges and juries
make it easy to sue honest doctors. Our law books are full of cases in which patients have been awarded
hundreds of thousands – even millions of dollars – simply because a doctor was unable to
cure them.
So the cost of liability insurance has sky-rocketed. Many doctors now
pay premiums of $70,000, $150,000, even $250,000 a year. These costs are necessarily passed along
directly to you. In some medical specialties – like obstetrics – the high cost of liability
insurance has created a national shortage of qualified physicians. And most doctors are now forced to
run you through batteries of costly tests, just to make sure they're not sued.
How We Can Have Affordable Medical Care
Fortunately, we can reduce your medical costs up to 75% without a
government takeover. The solution is to empower you - not the government or insurance companies.
Here are five ways:
- Restore Tax Equity. Unfair tax laws are a major reason why few of us can afford to buy
medical insurance outside of our jobs. Your employer pays for health insurance with pre-tax dollars.
But you have to pay with what's left of your paycheck after taxes have been deducted. It can cost you
twice as much to buy medical insurance as it does your employer.
The solution: Change the tax laws so health insurance is 100% tax-deductible
for you. You also should be able to form insurance-purchasing pools with others, further cutting your
costs. These changes will also make your medical insurance completely transportable between jobs.
- Individual Medical Savings Accounts. If someone suggested that we should triple the cost
of your auto insurance so it would cover oil changes and tune-ups as well as major repairs, you'd
probably tell them they were crazy. But that's exactly what we've done with medical insurance.
It now costs $50 for an insurance company to process a claim for a
routine $50 visit to a doctor's office, doubling the cost. You are unaware of this cost because it's
hidden in your medical premiums.
The solution is to create 100% tax-deductible, interest-bearing
individual Medical Savings Accounts. You or your employer would put $1,000-$2,000 into a Medisave
Account each year for routine medical expenses. That's your money, to spend as you choose on basic
medical expenses.
Because it's your money, you'd have an incentive to comparison shop and
economize in selecting a doctor, deciding on tests and treatments. In Indiana, the Golden Rule
Insurance Company has reduced their medical costs by 64% since setting up Medical Savings Accounts for
their employees a few years ago – and their employees love them for it.
- Replace the FDA with private certification. There is no excuse for the Food and Drug
Administration forcing manufacturers to spend hundreds of millions of dollars to prove the safety and
efficacy of drugs used for decades in Europe. There is no excuse for allowing the FDA to ban high-potency
vitamins (as it's trying to do) or to mount armed raids on alternative medical practitioners (over
200 such raids were staged in 1993). Private companies can certify the safety of drugs at a fraction
of the cost of the FDA. Then it should be your decision (in consultation with your doctor) – not
the government's – to decide what drugs to use.
- Privatize Medicare and Medicaid. Charitable aid for the poor is certainly desirable,
but as 80% of doctors agree, Medicare and Medicaid is intrusive and often harms patients' health.
Paperwork requirements alone are causing many doctors to quit medicine.
Medicare is too expensive, too bureaucratic, and is impoverishing young
workers. It's also on the verge of bankruptcy.
What's the alternative? For the poor, provide voluntary charitable aid
so they can purchase private medical insurance – saving us all Medicare's enormous
bureaucratic cost and the horrendous book-keeping requirements (and legal threats) imposed upon
doctors and insurers.
- Curtail Damage Awards. Outrageous malpractice awards are a major cause of escalating
medical premiums. Our laws, judges, and juries must distinguish between true negligence, which should
be legally actionable, and "acts of God" and human imperfection, which are unavoidable.
Medical Freedom Or Slavery?
If you want to know how government medicine would work in America, we
have lots of examples.
For over 60 years, the Veterans Administration has handled the medical
needs of millions of former servicemen. Investigations of the VA have found abominable conditions
bordering on cruelty: long delays for surgery, filthy hospitals, severe shortages of staff and medicines,
and hostile and indifferent staff.
In January 1992, CBS News reported that Walter Reed Army/Navy Medical
Hospital was refusing to provide amputees returning from the Gulf War with modern, artificial limbs.
Walter Reed even refused to accept donations of modern limbs.
When reporters demanded to know why soldiers were treated so callously,
a Medical Services colonel replied: "I am not going to spend the taxpayers' money if you will just be
sitting at home . . . we are the primary health-care providers. And the patients belong to us."
That's the medical future for all of us, if government takes over
medical care. The last thing we need is a government-run medical system with the "compassion of the
IRS, the efficiency of the Post Office, at Pentagon pricing." [Quote from HHS official]
We can have affordable medical care. But the solution is to get
government out of medicine and to give you complete medical freedom of choice.
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Jarret B. Wollstein is a member of ISIL's Board of Directors and a founder of the
original Society for Individual Liberty.
This pamphlet was originally published in 1993.
It is part of ISIL's educational pamphlet series. Click here for the full index of pamphlets online.
All ISIL educational pamphlets are available in hard copy for 5¢ each. Click here for the ISIL Store.
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