Critical Condition

Jesse Jackson on Health Reform!

For those who have been straddling the fence, weighing the arguments for and against the president’s health-care agenda: You can put your minds to rest. The noted health economist, Jesse Jackson, has declared that the “reform” will be unequivocally beneficial.

According to Mr. Jackson, Medicare, the U.S. government’s single-payer system for seniors is the most popular health plan in the U.S. Well, if I was able to get taxpayers to pay 53% of my medical claims, I suppose I’d be satisfied too. Even so, 90% of Medicare beneficiaries have some other coverage as well: Either they are on Medicare Advantage (which the president wants to cut back), have supplemental insurance from their current or former employers, or buy Medigap policies, or are “dual-eligible” for Medicare and Medicaid. Despite all this, Medicare has a (conservatively estimated) unfunded liability of $37 trillion over the next 75 years. Oh, the joys of government accounting!

Mr. Jackson also extolls the VA, about which he invites us to ask any veteran, whom he presumes will cheer the Veterans Health Administration. Well, many will concur that the VA has improved since the bad old days of the Vietnam War, or even the 1990s. Nevertheless, it was just as government-run then as it is today. The difference appears to be idiosyncratically charismatic and effective leadership in the person of Dr. Ken Kizer, who took over in 1994.

But Dr. Kizer failed to win re-nomination in 1999, and is now a health-care entrepreneur in the private sector. Today, with two wars going on, the cracks in the VA are showing.

But the biggest howler in Mr. Jackson’s op-ed is his argument favoring the U.S. government deciding how much your prescription drugs are worth. Get a load of this: “So America — which invents most of the new drugs in the world, largely with public research and development funds, pays the highest prices for drugs of any country in the world.”

The bit in the middle is not true: Private pharmaceutical R&D spending has outpaced government spending for over 20 years, according to the CBO (p. 28). Furthermore, international price differences are largely driven by macroeconomic factors, not “greed.” But the bit about American inventing most of the new drugs in the world is absolutely right, and would be fatally jeopardized by a federal take-over of access to medical services.

Well, I suppose you can’t make an omelette without breaking a few eggs.

— John R. Graham is director of Health Care Studies at the Pacific Research Institute.