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Snake-oil salesmen always lie

By Henry lamb
web posted August 24, 2009

It's true, there is no health plan; there is only a dream.  Obama and his socialist cronies dream about a 100% government-run health care system.  This is socialism in its purest form.  Once heath care is taken over by the government, other segments of the economy will fall more easily.

Obama is quick to say publicly that he doesn't want to take over health care; he wants to lower costs by increasing competition.  Obama said he didn't want to take over GM, but he did.  He said he didn't want to take over financial institutions, but he did.  Snake-oil salesmen always lie.  Obama is a master snake-oil salesman.

There is no health plan.  Congress is in the process of creating a health plan.  Obama wanted a health plan before the August recess, but it didn't happen.  The bills that are now floating around in Congress contain various proposals for elements to be included in the health plan. 

A year ago, while campaigning, Obama said, "If I were designing a system from scratch, I would probably go ahead with a single-payer system."  This is clearly his dream; this is the socialist system he wants to achieve.

Rather than try to design his own system, Obama described his dream, and left the actual construction up to his Congress-cronies.  The collapse of the Clinton health care plan is still too vivid a memory for most of the congressional socialists.  What emerged from Congress is something called a "public option."

 A public option is a government-run insurance program said to keep private insurance firms honest by creating effective competition.  A government-run public option:

  • Gets its start-up capital from tax revenue;
  • Needs not comply with state or local regulations;
  • Pays no state or local taxes;
  • Is priced specifically to sell for less than private competition; not to cover costs and make a profit for shareholders;
  • Can subsidize losses by simply taking more taxes.

As Barney Frank says, this public option is "the best way to reach single payer."  Employers who now provide some form of health insurance for their employees would be foolish to continue to do so.  By cancelling existing coverage, employers would become eligible to sign up in the tax-subsidized government-run public option. 

No private industry can compete with a government that can coerce revenue in the form of taxes.

This is precisely the argument of the socialists:  eliminate the profit.  Let government provide the service without a profit, and costs will be reduced for everyone. 

It sounds like a reasonable argument.  But it fails to recognize history and it completely ignores the benefits of competition in a free market. 

Perhaps it is instructive here to review the objective of the nation's health care system.  In a free market system the objective is to provide the best health care possible to the greatest number of people.  In a socialist single-payer, or public-option system, the objective is to provide some service to all the people, at whatever cost it takes.

In order to achieve its objective, the government system selects its brightest bureaucrats to decide what services the doctors may provide, how much the doctors will be paid for their service, and the location where the patient will receive the service.  This system thrives on what is called "comparative effectiveness analysis."  This analysis looks at similar health problems and chooses the most cost-effective method of treatment for the doctor to apply.  The doctor and patient are merely bystanders in this critical decision process.

This system completely removes the incentive to find a new treatment or new procedure because the government bureaucrat will not find it on his list of approved procedures.  It completely removes the incentive to find a less expensive way to deliver a service, since the government will decide what it will pay for every service delivered.

The free market system, on the other hand, has a built-in mechanism called price to constantly force prices to be as low as possible to cover costs, and return a profit for investors.  There is constant incentive for cost reductions at every point in the service delivery process. 

The problems in the current system begin at the point of government involvement.  Medicare and Medicaid costs have skyrocketed because of the waste, fraud and abuse.  Obama himself says that two-thirds of the cost of the proposed socialist system will be paid for by eliminating the waste, fraud, and abuse in the current system.

The question is, if Obama's analysis is accurate why not eliminate the waste, fraud, and abuse to reduce the cost of Medicare and Medicaid?  Why should the nation have to endure the socialization of medicine to realize this savings?

Of course, this is just more snake-oil from the master snake-oil salesman.

If the goal is to provide the best possible service to the greatest number of people, the first step Congress should take is to put a leash on the ambulance-chasing attorneys, by enacting meaningful tort reform.  Another step could be to remove the state market restrictions and let all insurance companies compete in all states.

Better health care for more people is a worthy goal.  Unfortunately, this is not the goal of the socialists in Washington.   Their goal is control. ESR

Henry Lamb is the author of "The Rise of Global Governance,"  Chairman of Sovereignty International , and founder of the Environmental Conservation Organization (ECO) and Freedom21, Inc.


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