Obamacare’s Costly Flaw
The administration has blamed rising costs on things that make U.S. health care different from other countries', but the data suggests otherwise.


Today, President Obama will meet with congressional leaders for a summit to discuss reforming American health care. The White House is expected to tout aggressive measures to reign in spending, and then contrast the president’s ideas with the smaller and — in the administration’s view — less substantive Republican proposals. And while the White House may or may not be successful in persuading Americans during the televised event, data from around the world suggests that White House proposals are unlikely to do much to “bend the curve” of health costs, to use the president’s favorite expression.

On this, we can all agree: American health care is feverishly expensive, swallowing up 17 percent of GDP. Since 2000, health-insurance premiums have more than doubled, affecting the bottom lines of businesses and hitting Middle America in the pocketbook.

It’s not surprising, then, that since inauguration the administration has made the reduction of “long-term growth of health-care costs for businesses and government” its highest priority for health reform. “If we do nothing, then health-care inflation is going to keep on going up at 8 percent, 9 percent, 10 percent a year,” the president said last July, urging immediate action.

Over this past year, the administration has blamed rising costs on things that make U.S. health care different. American private insurers are too greedy. American doctors prescribe wastefully. American doctors are paid inefficiently.

The White House has pushed sweeping measures: a Medicare-style plan to compete with private insurance; new bureaucratic committees to define and oversee private coverage; expansions of public programs; and a government body tasked with bettering health care by guiding the decisions of doctors. White House budget director Peter Orszag crowed that the latest Obamacare bill “contains more cost containment and delivery-system reforms . . . than any bill that has ever been considered on the Senate floor, period.”

Of course, the very same “cost containment” systems exist in countries with socialized health care. And if the White House has confidence in a government-based solution to this problem, here’s the irony: Health-care inflation rates in the United States have been similar to those in government-managed systems that often employ the sort of regulatory policies championed by the White House.


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