Wanted: Honesty on Health Care

The president's health care lies might be injurious to your health

Shikha Dalmia | July 7, 2009

(Page 2 of 2)

Obama has repeatedly claimed that forcing private plans to compete with a public plan will simply "keep them honest" and give patients more options—not lead to a full-blown, Canadian-style, single-payer monopoly. As I argued in my previous column, this is wishful thinking given that government programs such as Medicare have a history of controlling costs by underpaying providers, who make up the losses by charging private plans more. Any public plan modeled after Medicare will greatly increase this forced subsidy, eventually driving private plans out of business, even if that weren't Obama's intention.

But, as it turns out, it very much is his intention. Before he decided to run for office—and even during the initial days of his campaign—Obama repeatedly said that he was in favor of a single-payer system. What's more, University of California, Berkeley Professor Jacob Hacker, who is a key influence on the Obama administration, is on tape explicitly boasting that a public plan is a means for creating a single-payer system. "It's not a Trojan horse," he quips, "it's just right there."

But even if Obama wanted to, it is simply impossible to design a public plan that could compete with private insurers on a level playing field and without "feeding off the public trough" as Obama claims.

At the very least, such a plan would always carry an implicit government guarantee that, should it go bust, no one in the plan would lose coverage. This guarantee would artificially lower the plan's capital reserve requirements, giving it an unfair edge over private plans. What's more, it is simply not plausible to expect that the plan wouldn't receive any start-up subsidies or use the government's muscle to negotiate lower rates with providers. If it eschewed all these things, there would be no reason for it to exist—because it would be just like any other private plan.

Lie Five: Patients don't have to fear rationing.

Obama has been insisting, including during his recent ABC Town Hall event, that the rationing patients would face under a government-run system wouldn't be any more draconian than what they currently confront under private plans. This is complete nonsense.

The left has been trying to address fears of rationing by trotting out an old and tired trope, namely, that rationing is an inescapable fact of life because every system rations whether by price or fiat. But there is a big difference between the two. If I can't afford caviar and champagne every night, any rationing involved is metaphoric, not real. Genuine rationing occurs when someone else controls access—how much of a particular good I can consume.

By that token, Obama's stimulus bill has set in motion rationing on a scale unimaginable in the land of the free. Indeed, the bill commits over $1 billion to conduct comparative effectiveness research that will evaluate the relative merits of various treatments. That in itself wouldn't be so objectionable—if it weren't for the fact that a board will then "direct financing" toward approved, standardized treatments. In short, doctors will find it much harder to prescribe newer or non-standard treatments not yet deemed effective by health care bureaucrats. This is exactly along the lines of the British system, where breast cancer patients were denied Herceptin, a new miracle drug, until enraged women fought back. Even the much-vilified managed care plans would appear to be a paragon of generosity in comparison with this.

Obama has repeatedly asked for honesty in the health care debate. It is high time he started showing some.

Shikha Dalmia is a senior analyst at Reason Foundation and writes a biweekly column for Forbes, where this column originally appeared.

Comments

johnny john john|7.7.09 @ 7:58AM|#

Why is a website called "Reason" so fond of using propagandist statements sprinkled throughout their articles?

ed|7.7.09 @ 8:10AM|#

Disney World has revealed their newest Hall of Presidents animatronic puppet.
Democrat visitors swear they can't tell the real Obama from the fake one.

Xeones|7.7.09 @ 8:12AM|#

Cripes, johnny john john, it's too early to drink yet.

Art-P.O.G.|7.7.09 @ 8:17AM|#

Xeones,

Sometimes I think these people know the drinking rules and transgress deliberately.

|7.7.09 @ 8:23AM|#

April Fulton had a marvy little piece on Morning Edition this morning, where she made the debate over a public plan into a cute little airlines metaphor.

Flights to Healthville on a crowded 737 for cheaps vs. comfy seats with meals and drinks on a private airliner that (sob) not everyone can afford...

It was the stupidest fucking thing I've heard in a long time. Here, go listen so I don't have to suffer alone.

Is anybody good at firing off letters? This deserves a good verbal spanking.

Rich|7.7.09 @ 8:26AM|#

"uttering not transcendental truths, but bald-faced lies"

How about "transcendental lies"?

Xeones|7.7.09 @ 8:29AM|#

It does happen with suspicious regularity, Art. Mainly i'm pissed because i left my flask at home -- trying NOT to get fired this week.

Rich|7.7.09 @ 8:30AM|#

@ Bronwyn. "Government Air", indeed. BYO airsickness bag!

Rich|7.7.09 @ 8:32AM|#

> Why is a website called "Reason" so fond of using propagandist statements sprinkled throughout their articles?

Mostly, just being professional about quoting the fodder.

|7.7.09 @ 8:53AM|#

Yeah, BYO airsickness bag, and BYO pillow, but that'll be a $200 extra charge. And since you've shown yourself to be so wealthy as to be able to afford your own airsick bag and pillow fee, we're kicking you off the plane.

The metaphor failed the instant she said, "destination, Healthyville."

Spoonman|7.7.09 @ 9:02AM|#

But right now the airlines are required to give everybody rides to Healthyville, then bill them.

|7.7.09 @ 9:06AM|#

Sometimes I think these people know the drinking rules and transgress deliberately.


It's a great excuse for an eye opener.

Fascitis Necrotizante|7.7.09 @ 9:07AM|#

To keep ticket prices down, we'll be paying your pilot $.60 on the dollar for his time. And who really needs a copilot? Enjoy your flight!

Xeones|7.7.09 @ 9:10AM|#

The metaphor failed the instant she said, "destination, Healthyville."

Right -- i mean, c'mon, everybody knows Healthyville doesn't even have an airport. You have to fly into Cleveland and then it's like an hour on the bus.

|7.7.09 @ 9:18AM|#

It was the stupidest fucking thing I've heard in a long time.

I heard that, too. I shouted some very uncomplimentary words at the radio.

Stupid like that is the reason I don't keep any of my guns loaded. I'd've shot all my radios long ago. :)

Xeones | July 7, 2009, 9:10am - Good one.

Lisa Simpson|7.7.09 @ 9:27AM|#

Ew! Oprah and Obama's tongue doing any dipping is the last image I want in my mind. She's like his Barbra Streisand or something. Too bad she's barking up the wrong tree, though.

|7.7.09 @ 9:46AM|#

The CATO Institute ran an ad recently with the headline "With All Due Respect, Mr. President, That Simply Is Not True." I guess being classy doesn't have the same sensationalist bang that "bald-faced lies" has.

|7.7.09 @ 10:00AM|#

People are so worried about losing their job, coverage, denial of treatment, which seems to increase bank deposit latetly. That means stimulus funding mainly goes toward bank deposit for a rainy day increasing jobless rate. It proves again that a healthy society yields better productivity, prosperity.
It is time to 'Change' the notion of the public health as a fundamental human right and install 'a safety system for all' like all of the other industrialized nations, I think.

Warty|7.7.09 @ 10:12AM|#

Xeones, are you saying that Cedar Point is Healthyville?

|7.7.09 @ 10:24AM|#

Even if a government option was so affordable that employers rushed to drop private plans to line up for it, and even if the government plan would not cover some treatments, "rationing" would not necessarily increased, nor would private plans suddenly disappear. Does anyone imagine that supplemental plans would not flourish for those with the ability to pay?

Private insurance plans ration care all the time. As insurance costs have rocketed upward in recent years and we have struggled to maintain a plan we could afford, the list of exclusions has grown longer and longer. When I retire, how will I ever afford insurance that will cover pre-existing conditions?

The opportunity to choose a public option IS freedom. Rationing is denying me that opportunity.

|7.7.09 @ 10:47AM|#

The opportunity to choose a public option IS freedom. Rationing is denying me that opportunity.

I see George Orwell has joined the Reason blog.

War is Peace. Slavery is Freedom. We were always at war with Ociana.

Good Lord, how words can decieve!

|7.7.09 @ 10:48AM|#

Rm, with the spending Obama wants the chances of any of us being able to retire is almost nil.

|7.7.09 @ 11:09AM|#

Lamar: It may not be "classy" to call a spade a spade, but when others keep insisting it's a hoe, one is sometimes compelled to correct them.

It's not Reason's fault that Obama is a damn liar.

|7.7.09 @ 11:31AM|#

"Lamar: It may not be 'classy' to call a spade a spade, but when others keep insisting it's a hoe, one is sometimes compelled to correct them."

Couldn't they correct them in a way that doesn't evoke the book Lies (And the Lying Liars Who Tell Them)? Sorry, calling the President a liar sounds like Code Pink or Al Franken, not dignified journalism.

If you have a strong case (and the case against CommieCare is strong), you don't have to call people a liar, liar pants on fire.

|7.7.09 @ 11:37AM|#

I wish Reason and the Republicans and everyone else who opposes Obama's healthcare "solution" would get beyond the sniping (as well-deserved as it is) and start pushing some specific free-market reforms. Rather than just playing defense, get people talking about tort reform, HSAs, the FDA, etc. etc.

|7.7.09 @ 11:42AM|#

Xeones:

Shouldn't you be saying, "Yo, fuck Barack Obama"?

|7.7.09 @ 11:54AM|#

Articles such as this would be more convincing if we didn't have the rest of the civilized world to compare our healthcare system to. Somehow, only in America does a public option become an oppressive totalitarian nightmare when compared to the fabulous success of the private system we have.

|7.7.09 @ 12:16PM|#

Tony, first of all, we don't really have a "private system." Medicine here is highly regulated/subsidized/partially socialized. And have you noticed how often people around the world come here for medical care?

|7.7.09 @ 12:28PM|#

"And have you noticed how often people around the world come here for medical care?"

This is why socialized medicine isn't enough. We need a worldwide system of health care. We could pay for it by stripping the drug companies of their patents. We would require young doctors to spend a year or two in impoverished lands in order to earn their licenses. Best of all, health care wouldn't be rationed because there would be no profit motive or corporate greed. Think of it as a combination of Cuba, Canada and Sweden, all wrapped into one sustainable package without any real cost. Do it. I said do it now.

|7.7.09 @ 12:48PM|#

Sorry, calling the President a liar sounds like Code Pink or Al Franken, not dignified journalism.

They didn't call him a liar, they called what he says lies. Big difference.

And seeing as how this is America, remember that the President deserves no more respect by virtue of his job than the fry cook at your local McDonald's does. He works for us, not the other way around.

Sean W. Malone|7.7.09 @ 12:49PM|#

Death is a genius! No cost at all... Only freedom, and who really cares about that?

Just remember everybody, the eviiiiiiiilllll insurance company wants you to pay for it... Government will make it FREE!

|7.7.09 @ 12:54PM|#

Sorry, calling the President a liar sounds like Code Pink or Al Franken, not dignified journalism.

Yeah, and look how that worked for Franken. Totally destroyed him as a political player.

|7.7.09 @ 1:00PM|#

The troll rode in on a pale horse, and his name is Death.

Sean W. Malone|7.7.09 @ 1:02PM|#

Psh... Death is just good satire.

|7.7.09 @ 1:03PM|#

"Yeah, and look how that worked for Franken. Totally destroyed him as a political player."

I hold journalists to a different standard than political players. We weren't supposed to take Franken seriously, but we are supposed to take Dalmia seriously, despite the similarity in childhood taunts.

LarryA|7.7.09 @ 1:33PM|#

And seeing as how this is America, remember that the President deserves no more respect by virtue of his job than the fry cook at your local McDonald's does.

Hey! The cook at McDonalds gives me what I pay for. On time and with a smile. What do you have against him?

guy|7.7.09 @ 3:10PM|#

We need a new Bill of Rights! Everyone has a natural and unalienable right to health care, affordable housing, and a good education! The current PROFIT-driven health care system makes money by DENYING health care! How could you support such an evil system?

|7.7.09 @ 3:17PM|#

@ Isaac

Yeah, I was hurling obscenities at my radio, too. I almost bapped the Power button to shut her up, but restrained myself.

I withhold my Power button bapping for current and former Presidents and Presidential candidates.

(Please note, that was 'bapping', not 'fapping'. I don't think a girl can fab, anyway...)

|7.7.09 @ 3:23PM|#

I have long advocating that the best euphemism for female masturbation is making soup.

|7.7.09 @ 3:29PM|#

ACCORDING TO THE FEDERAL GOVERNMENT TOO MUCH OF AMERICA'S GDP IS SPENT ON HEALTH CARE.

BUT THE FEDERAL GOVERNMENT CREATED THE PROBLEM:

Decades ago the government passed 'pay or play' tax incentives that encouraged employers to provide employees with health insurance.

And America was hooked on health care the way junkies get hooked on smack. The dealer gave free samples until the client was hooked.

When I was young America was the world's wealthiest nation. And employer provided health insurance paid 100% of medical costs. Because it was free it was abused. Mom took children to the emergency room for a rash and to the doctor for a small cut. Demand was artificially high.

Cost shifting provided for the uninsured. Patients with good insurance policies and wealthy patients with no insurance policies received inflated invoices to cover the costs of those who could not pay. Health care providers and hospitals robbed from the rich to provide health care for the poor.

It is instructive that during the time when America enjoyed great wealth the Federal Government expressed no concern for the plight of the uninsured!

But over time manufacturing jobs moved overseas and were replaced with lower paying service economy jobs. Consequently, employers offered health insurance with less coverage and higher deductibles and co-pays.

Were factory jobs lost because America could not compete with manufacturers in countries where government paid for health care? Regardless, American leaders would not raise tariffs to level the playing field and signed GATT and NAFTA into law!

And America's leaders permitted millions of 'illegal' aliens to cross the border to do work American's would not do. Our schools educated their children, our State governments gave them drivers licenses, our banks granted them mortgages and our hospitals provided them health care.

BOGUS SOLUTION

Now that America is the worlds biggest debtor nation the Federal Government has decided the plight of the uninsured is unconscionable and universal coverage is a moral imperative.

But this is not about the 46 million uninsured. It is about assuring health insurance companies' market share and health care professionals expected incomes and lifestyles.

The health system in America has been based on a larger and more affluent generation of young policy holders offsetting the health cost of middle aged and seniors. This formula is being upset by the WWII baby boomers generation approaching retirement and the global recession.

President Obama wants every American citizen to be required to buy a health insurance policy. He compares it to the requirement that motorists purchase auto insurance. But while driving is a privilege, life and the pursuit of happiness is a right!

Where in the Constitution or Bill of Rights is the Federal Governments authority to require the purchase of a health insurance policy as a condition of having been born?
Where is freedom when government has the power to tell you how to spend after tax dollars? What distinguishes disposable income from taxes?

As for the proposal that the IRS be charged with fining citizens who do not purchase a health insurance policy, since the federal government just prints more paper money to pay debt why is taxation or the IRS even necessary. Just shutdown the IRS and transfer its budget to indigent care!

FREE MARKET IS THE SOLUTION

Is providing health care an enumerated power or responsibility of the Federal Government?

The Federal Government lacks any authority to preach fiscal responsibility. It has exhibited none in my lifetime and has reduced the wealthiest nation on the planet to world's biggest debtor nation.

But Ma and Pa citizen have had to balance a checkbook their entire lives. The solution is to return control of health care spending to them.

Pass a law making it illegal for an employer to offer health insurance as an employee benefit. End wage stagnation and give employees raises instead.

Doing away with group health insurance and forcing insurance providers to compete for individual business will permit cost conscious Ma and Pa to shop for the best deal, like they do auto insurance. Then the free market will bring costs under control!

|7.7.09 @ 3:48PM|#

Just baffling. I am just stunned how such an intelligent man (Obama is pretty intelligent, dumb as he is, he is intelligent) could do and say such things. What makes my brain short-circuit even more is that the average American isn't hugely pissed off. Most Americans do not want this kind of system. The liberals do not think, "oh, the public doesn't want this, we should rework the plan to please them." They think, "oh, the average American is a dumbass who doesn't know what is best for himself, we better shove this down his throat because we do know what is best for every man, women, and child."

Colonel_Angus|7.7.09 @ 4:43PM|#

"Pass a law making it illegal for an employer to offer health insurance as an employee benefit."

How is this a free market solution? In a free market, it would be completely optional for employers to offer health insurance. Instead, remove the tax subsidies and coverage mandates and other regulations from the situation, because they skew the market to insurance companies' favor.

Regulation and subsidies are the opposite of free market.

|7.7.09 @ 4:49PM|#

HeadTater: There's also the cynical explanation, which is that the plan is a gift to unions, and a means of getting all Americans on the government teat, so that Democrats can be in control forever. Once the government pays for all health care, the "solution" to every waiting list, every unneeded death, every instance of rationing will be higher taxes and more powerful bureaucracies. Once grandma is dying on the waiting list for government health care, all proponents of smaller government and less spending will be accused of heartless cruelty (even more than they are now).

Patients\' Choice Act|7.7.09 @ 5:52PM|#

Why hasn't anyone mentioned me yet?

|7.7.09 @ 11:00PM|#

hey Guy:

"The current PROFIT-driven health care system makes money by DENYING health care! How could you support such an evil system?"

What the hell do you think happens in a gov't system??? How do you think they lower costs??? THEY DENY SERVICE, you moron. But don't worry about it--it's only OLD people, so just stay young bro, and you'll be coooool.

|7.7.09 @ 11:35PM|#

Shikha Dalmia...

Bigmanrestless...

"In fact all of you who don't pucker up to me The Chosen One"

912DC.org|7.8.09 @ 10:44AM|#

Could you all please shut up? I can't hear Obama. I came in six months ago to get this lump looked at and I'm still waiting for my number to be called...Any week now!