Politics & Policy

Health-Care Radical

Obama's ambitiously statist health-care agenda.

But what’s brought us all together today is a recognition that we can’t continue down the same dangerous road we’ve been traveling for so many years, that costs are out of control, and that reform is not a luxury that can be postponed, but a necessity that cannot wait,” Pres. Barack Obama said Monday, standing aside representatives of various health-care groups. President Obama announced that these groups had “voluntarily” agreed to trim the growth rate of health spending by 1.5 percent.

Practically, the event was irrelevant — the groups are not bound by their agreement, and many of the statements they signed on to were of the motherhood-and-apple-pie variety. (They professed a belief in “wellness,” for example.) Politically, the event was perfect. There Obama stood, touting the virtues of health reform, flanked by an old ally of that cause (the Service Employees International Union) and many old adversaries (the Pharmaceutical Research and Manufacturers of America [PhRMA], doctors, the insurance lobby). They were united in agreement that overall costs should be reduced. The New York Times described it as “a political coup.”

It is the type of event that President Obama excels at. His speech was magnanimous, even, and dull. The message is clear: He cares about health care, but he isn’t radical. Goodness, even the lobbyists from K Street seem to agree. The irony is that Monday’s event serves as window dressing for the most ambitiously statist national-health-care agenda in a decade and a half. Should the White House succeed, Washington will insure tens of millions more, dictate the types of procedures we get, and pay for the lion’s share of it all.

#ad#Start with the commitment to “comparative-effectiveness research.” From a distance, the idea of researching which health-care practices work and which don’t seems worthwhile enough. No one can doubt that money is wasted in American medicine. As budget chief Peter Orszag suggests, good research should encourage patients to spend more “if the treatment has been shown to be effective and a little less if not.” It’s not surprising that the stimulus package commits more than a billion dollars for this cause.

The problem is the belief that Washington can measure health-care value, determining for the nation’s doctors what are good treatments and what aren’t. The inspiration is the British National Institute for Health and Clinical Excellence (NICE). Under NICE, the government takes months, sometimes years, to determine if drugs are worth the cost.

Often NICE refuses to fund new cancer drugs. Writes Karol Sikora, a former head of cancer control at the World Health Organization: “As a practicing oncologist, I am forced to give patients older, cheaper medicines. The real cost of this penny-pinching is premature death for thousands of patients — and higher overall health costs than if they had been treated properly: Sick people are expensive.” Sikora speculates that NICE is one of the reasons that Britain so badly trails the United States in cancer outcomes. Here’s the irony: At a time when Washington fawns over the sophistication of NICE, Whitehall is reviewing this very government body with an eye on overhauling it.

The Obama administration’s ambition doesn’t stop there. The centerpiece of the Obama health-reform agenda is the creation of a new, voluntary health-insurance exchange, open to the self-employed and employers. Enrolled workers would select among several insurance options, including a government-run plan modeled after Medicare.

The problem is that Medicare isn’t like private insurance; the program employs price controls, reimbursing doctors at below-market rates. Practically, this lower reimbursement means the following: A family doctor gets paid much less to see a Medicare patient than to see the patient’s privately covered younger brother.

Such a setup would have a big impact on a voluntary health-insurance exchange — indeed, on all health insurance. By paying providers less, a public option would have an advantage over its private rivals: It could charge artificially lower premiums. In April, the Lewin Group released an analysis of the effects of a public plan. The report speculates that more than 100 million Americans would leave the private insurance market. Lewin’s John Sheils doesn’t mince words: “The private industry might just fizzle out altogether.” Alas, it’s HillaryCare, on the installment plan, with the government crowding out private insurance. Looking to the future, ObamaCare would see many Americans, perhaps most Americans, covered by the federal government. The problems of government-managed health care — the rationing, the waiting lists, the cruelty — would not be far behind.

In the coming weeks, those of us who oppose government-dominated health care need to speak up. There is an alternative to the White House proposals: reforming health care along the lines of individual choice and competition. President Obama was right to warn Americans about traveling down “the same dangerous road,” but that doesn’t mean his favored alternative path is the correct one.

– David Gratzer, a physician, is a senior fellow at the Manhattan Institute.

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