Monday, December 21, 2009

Government and Health Care Costs

The most common arguments for government control of health care is making it available to everyone and excluding no one. Studies indicate that US indigent care (those who cannot afford health care of their own) is better than health care for those who have socialized medicine in other countries. Meanwhile, the vast majority of Americans who have private coverage enjoy the best care in the world. One of the other popular arguments I hear most often is about the "cost containment" that can only "come from government."

This is a big part of President Obama's message. In a speech back in September on health care that he delivered to Congress he said "The plan I'm announcing tonight would... slow the growth of health care costs for our families." More than for the President's remarks, this speech is better known for a comment by Congressman Joe Wilson (R-SC) in which he yelled that the President was lying in his speech. The Congressman was referring to the fact that the President claimed his health care bill would not include illegal aliens, but the lack of truth in Obama's "advertising" does not end there.

John Stossel points out in a recent column at FoxBusiness.com that "health care costs have been rising just as fast in countries with government-run health care. Since 1990, per person spending on health care has risen 159% in the US. But in England, with its government-run system, costs went up 210% over the same time period. Spending was up 148% in France and 124% in Canada, according to OECD data." The OECD is the Organization for Economic Cooperation and Development. So we see that government control has not contained costs and the methods used to keep spending down is the use of rationing health care. According to Canada's own health care system, the average Canadian must wait 17 weeks from the time a general physician finds something wrong and a specialist finally sees him or her. In many cases, that is the time frame of an early detected cancer becoming inoperable.

Stossel goes on to note that "It's true that we have always spent more on health care than countries with government systems. But that's partly because we're wealthier, and partly because other countries don't respect our drug patents, free-riding on our medical innovation." That innovation will decline with the undermining of our for profit health care system. I go a step further to mention that doctors in socialized countries do not have the liability issues that American physicians have. Doctors in this country recommend very expensive tests -- even if it is highly unlikely that the patient might have the condition the exam seeks -- in order to protect themselves from being sued by patients later. In socialized systems, it is virtually impossible to sue government doctors.

Finally, Stossel points out something both obvious, but profound, "Someone will ration health care. In America, insurance companies usually do it. In most of the rest of the world, governments do. Costs skyrocket under both systems. Its time we tried the third option: let individuals use their own money to buy health care."

I have been advocating "consumer driven health" long before it became a popular phrase in the insurance industry. The development of such an approach, seen in things like high deductible insurance policies and health savings accounts, have significantly reduced cost increases for businesses and individuals who have pursued such plans. The reason for this is simple, it gives the consumer (or in this case, the patient) a financial interest in the choices that are made in his or her health care. Individual responsibility should be the center piece of the health care debate, rather than abdicating health care to the government.

Kevin Price is a syndicated columnist whose articles frequently appear at ChicagoSunTimes.com, Reuters.com, USAToday.com, and other national media. Kevin Price is Host of the Price of Business (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at PriceofBusiness.com. Visit the archive of past shows here.

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