HillaryCare Blooms

HillaryCare Blooms
All the Democratic health plans spurn market-based reforms.

Saturday, June 2, 2007 12:01 a.m. EDT

The HillaryCare experiment ended badly in 1994, but Democrats are back
in the universal health-care laboratory. All the party's major
Presidential candidates have or will introduce plans, and last week
Hillary Clinton presented the first part of hers. The former First
Lady joked that she's "tangled with this issue before" and has "the
scars to show for it." But the lesson she seems to have learned is
political, not substantive--that is, make any plans for government
control gauzy and incremental, not grandiose.

Mrs. Clinton will unroll her universal plan later this year; last
week's speech focused on lowering health-care costs, which stand at
$1.9 trillion for 2005. She says she can trim that by "at least" $120
billion. A big lump of that figure comes from digitizing and
integrating medical records. Not a bad idea, probably: A 2005 RAND
study suggests it could produce $77 billion in net savings a year with
90% adoption. Computerized record-keeping is so unobjectionable that
it's also a pet issue of Newt Gingrich, among other Republicans.

Mrs. Clinton also nodded at medical malpractice reform. She neglected,
however, to support the proposals that would actually reduce costs,
such as punitive damage caps and specialized medical courts. These,
not incidentally, are also the programs most vigorously opposed by the
tort bar.

Her main thrust addressed prevention to reduce the incidence of
diabetes, heart disease and other chronic conditions. Mrs. Clinton
would do so by mandating that insurers re-orient their policies to
cover prevention, at least when dealing with the federal government--
no doubt with other mandates to follow.

This was only the first of Mrs. Clinton's promises to crack down on
the "marketing and schemes" of the insurance industry. She decried
companies, for instance, that "discriminate" against those with pre-
existing conditions, and would require that "anyone" be allowed to
join a plan, whenever. This is called "guaranteed issue"; it allows
people to wait until they're sick before seeking insurance, making it
less affordable for everyone else.

Guaranteed issue is precisely one of the mandates that makes insurance
so expensive in states like Massachusetts, New York and New Jersey.
Policies might be more affordable if the insurance market were
deregulated; now, the market is balkanized by 50 separate sets of
state regulations, inhibiting innovation and economies of scale. But
for the Senator from New York, it's easier to blame nefarious
business.

Mrs. Clinton also took some predictable swipes against the
pharmaceutical companies for the cost of prescription drugs. She would
allow Medicare to negotiate lower prices and allow for reimportation
from foreign countries. These drugs, of course, are cheaper because
foreign governments impose price controls on pharmaceuticals that
mostly originated in the U.S.

The Senator also discussed at length her proposal to create a
regulatory pathway for the approval of generic copies of biotechnology
medicines. Not only is such a program shot through with serious
scientific and intellectual-property concerns, but the best research
indicates that the savings range for follow-on biologics falls between
5% and 13% over the original drugs. The U.S. spent $52.7 billion on
biologics in 2005, so the potential savings are small while what Mrs.
Clinton suggests could hamstring the most innovative medical sector.





Earlier this week, Senator Barack Obama offered his own full-dress
plan, which promises to "provide coverage for all." The Presidential
hopeful latched on to many of the same worn-out policy ideas as Mrs.
Clinton--guaranteed issue, drug reimportation and more severe
insurance regulation. As it turns out, though, Mr. Obama's program
isn't necessarily universal. He would retain the private insurance
system while creating a parallel public health plan based on the one
currently available for federal employees; a sliding subsidy would be
provided to those with lower incomes. The campaign says this will cost
the federal government between $50 billion and $65 billion per year,
and will be paid for by repealing the Bush tax cuts of 2001 and 2003.
The Obama plan has been roughed up on the left because it doesn't
mandate 100% coverage outright, aiming instead to cut down the number
of uninsured. The John Edwards camp calls the program "simply
inadequate." For his part, Mr. Edwards has offered a universal plan
that would require businesses to cover their employees or else pay
into a government fund to provide coverage; and he'd create a new,
expanded federal entitlement program modeled after Medicare. Mr.
Edwards estimates it will cost between $90 billion and $120 billion a
year--and some experts say the price will be higher than that--which
he proposes to fund by raising taxes. At least Mr. Edwards is somewhat
honest about cost, as opposed to the free-lunchism of Mrs. Clinton and
Mr. Obama. Put simply, a universal health-care system can't be
financed with savings from computerized medical records.

What's most striking is that all these Democratic proposals spurn
market reforms and the tax code, which is biased toward health
spending. Because third-party businesses--but not individuals--can
deduct health expenditures, the tax code insulates those with private
insurance from the real costs of their treatment decisions and then
prices uninsured Americans out of the market. Instead of aggrandizing
more power to the government, changing this arrangement would devolve
more control to patients and their doctors, and reduce overall
spending as part of the bargain.

In any event, it will be interesting to see in the coming months how
Mrs. Clinton negotiates what she calls "the moral imperative" to
extend universal coverage to all Americans. Given that most of her
proposals so far would raise, not lower, the cost of health care, she
might want to go back to the drawing board.

.

Relevant Pages

  • Re: The movie Sicko is a must-see
    ... They want it to be low-cost, on-demand, they want freedom to choose their providers, and they want high quality. ... Right now, we have the latter three, along with a coverage issue which is tied to the cost issue. ... Nobody will choose to forgo quality, so it's a choice between having your health care rationed, or having somebody else choose your doctor. ... We know how popular gatekeeper plans are -- we've spend two decades legislating them out using "Patient Bill of RIghts" bills. ...
    (soc.retirement)
  • Kerry "Paperwork Ad: Accurate
    ... Kerry "Paperwork" Ad: Accurate ... plan could save money. ... making a pitch for his health care plan, ... I have a healthcare plan that can reduce the cost of healthcare. ...
    (sci.med.diseases.lyme)
  • Re: Rudy Giulianis Health Plan: Take Care of Yourself
    ... offset the cost of the health insurance, and also to allow them the "choice" to put that money into a medical savings account, it seems to me... ... Giuliani offered the broad outline of his plan but his campaign did not ...
    (soc.retirement)
  • Re: Rudy Giulianis Health Plan: Take Care of Yourself
    ... It would have been a whole lot better to give people a tax credit, to offset the cost of the health insurance, and also to allow them the "choice" to put that money into a medical savings account, it seems to me... ... Giuliani offered the broad outline of his plan but his campaign did not ...
    (soc.retirement)
  • Re: Obama: I want a government single payer health plan -- to dismantle and replace private
    ... >>> Republicans have been saying for years that health ... >>> shouldn't be an employer responsibility, that the market ... >> Wow and Obama's plan will enable individual's to find the ... They are either Insurance company shills, ...
    (soc.retirement)
Loading