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.

Lessons Wall Street Could Learn from Hillsdale College

Education should be an on going process. If a person becomes too old to learn, they are simply too old. Wall Street institutions that lined up for hand outs should have went back to college before they became wards of the federal government. They should have went to Hillsdale College.

Hillsdale College is a private institution in Michigan that is noted for its commitment to independent thinking, its love of country and for producing outstanding alumni. It also doesn't receive a single penny from either the federal or state governments. Not even financial aid from its students. It argues that this has been the secret of its independence.

In fact, the financial geniuses on Wall Street didn't even have to go back to school, they could have simply visited Hillsdale's website, which states that "In 1975, the federal government said that Hillsdale had to sign a form stating that we did not discriminate on the basis of sex. Hillsdale College had never discriminated on any basis, and had never accepted federal taxpayer subsidies of any sort, so the College felt no obligation to comply, fearing that doing so would open the door to additional federal mandates and control. Our trustees pledged two things: first, that the College would continue its long-standing policy of non-discrimination, and second, that it would not accept any encroachments on its independence. The case went to court, and Hillsdale College won a partial victory, but the Sixth Circuit Court of Appeals did rule that Hillsdale College was an “indirect recipient” of federal funding because of participation in federal grant and loan programs. In 1984, Grove City College in Pennsylvania fought and lost a similar legal battle. The case then went to the Supreme Court, and in Grove City v. Bell, it was determined that if even one student received a federal grant or loan, it made that institution a direct recipient of federal funds. To avoid the hassles of government control, Hillsdale College announced its decision to end participation in all federal financial aid programs in 1985. In 2007, Hillsdale announced that it would no longer accept State of Michigan taxpayer subsidies earmarked for student financial aid, thereby making the College completely independent of taxpayer support" (emphasis added).

Rarely in history has the government funded any business or institution without ultimately controlling it. It is naive to think that a government that exercises so much control over businesses in the form of taxation, regulations and licensure laws without funding them would not expect more -- much more -- from companies they actually financed. Now they have dined at the government's table, businesses will be looking at spending millions in legal costs to extract itself from the monster it has wed (if that is even possible). The first legal battle will come quickly, with the government retroactively taxing AIG for bonuses it paid its employees.

The admonishment to "do your homework" isn't limited to businesses. All of us need to take a much more careful approach in dealing with this government today.

Kevin Price is Host of the Price of Business, the longest running show on CNN 650 (M-F at 11 am). Eric Bolling of Fox News and Fox Business and says that Price’s Blog “is very influential and moves the blogosphere.” Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com.