Ever since the Clinton administration’s proposal to direct America’s health-care system from Washington, D.C., went down in ignominious defeat a decade ago, its chief architect, Hillary Rodham Clinton, has shied away from “comprehensive health care reform.” That is, until now.
Breaking what must have been a difficult ten-year silence, Sen. Clinton (D., N.Y.) recently asked on the cover of The New York Times Magazine, “Now Can We Talk About Health Care?” Without waiting for an answer, she called for “a new social contract for a new century premised on joint responsibility to prevent disease and provide those who need care access to it.” Unfortunately, the new social contract looks a lot like the old social contract she offered last century.
Except for a few 21st-century garnishes, Clinton’s article relies on decade-old misconceptions and contradictions. She argues the U.S. ranks 42nd among nations in infant mortality, even though many nations underreport infant deaths and when measured by birth weight, infants do better in the U.S. than in nations with supposedly lower mortality rates. She claims there are 43 million uninsured Americans despite authoritative scholarship showing the number is closer to half that figure. At the same time she decries the lack of treatments for rare diseases, she praises the same Food and Drug Administration that makes such treatments unprofitable. “Individuals should understand that they put their lives at risk with unhealthy behavior,” she says, but risk-based insurance pricing is cruel. Emergency-room overcrowding is not a consequence of socialization, but evidence of the need for greater socialization.
Clinton’s prescription remains “universal coverage,” despite evidence that what such health systems provide is neither universal nor coverage. In addition to the perverse incentives this would introduce, she hints at rules that would substitute the government’s judgment about what treatments are appropriate for the judgment of the physician on the spot, plus similar rules governing health benefits, insurance pricing, medical records, municipalities, hospitals, household cleaners, gym class, diet, urban sprawl, you name it. It’s déjà vu, all over again.
The reason behind Clinton’s shift in strategy is hidden to all but the most ardent supporters and opponents of socialized medicine.
The recently enacted Medicare prescription-drug law contains a deceptively small provision allowing personal, tax-free health-savings accounts. Health-savings accounts mark a fundamental shift in federal health-care policy. Health-savings accounts treat an individual’s medical expenditures and savings on a par with tax-free employer expenditures. As a result, they empower individuals to become stewards of their own health-care dollars rather than force people to depend on their employer to spend those dollars wisely.
The consequences of this little-remarked change will be profound. Health-savings accounts will lead patients to curb rising health-care costs, demand greater value, and eliminate waste because it’s their money at stake.
However, the consequences that frighten the Left are political. The Left cannot impose a government-run health-care system without a widespread sense of entitlement and openness to dependence, both of which are manifest in America’s health-care sector. Yet health-savings accounts breed the opposite values of personal responsibility and self-reliance. Just as IRAs and 401(k)s made the political landscape more hospitable to Social Security reform by turning millions of Americans into investors, health-savings accounts will generate the political will to enact consumer-based Medicare reforms by turning millions of Americans into sovereign health-care consumers.
Former Sen. Phil Gramm quips that the Left reacts to health-savings accounts like a vampire reacts to a cross, because the Left knows that once patients get a taste of freedom, all hope of achieving a government-run health-care system will vanish.
Clinton inadvertently acknowledges this reason for her change in strategy by veering off-message for several column-inches to denounce health-savings accounts and argue that consumers aren’t sophisticated enough to demand value from doctors and will harm themselves by forgoing needed care to save a few bucks. Like all opponents of consumerism, the real object of her disapproval is the public’s intelligence.
To the most ardent supporters and opponents of health-care consumerism, Clinton’s desire to accelerate socialization makes perfect sense. Considering how health-savings accounts will transform America’s health-care sector, it’s imperative.
For the first time, advocates of socialized medicine are on the run. This ought to be good.
–Michael F. Cannon is director of health-policy studies for the Cato Institute.