Welcome to the American Revolution II

Welcome to the American Revolution II
But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.
"We face a hostile ideology global in scope, atheistic in character, ruthless in purpose and insidious in method..." and warned about what he saw as unjustified government spending proposals and continued with a warning that "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex... The potential for the disastrous rise of misplaced power exists and will persist... Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."Dwight D. Eisenhower

Sunday, August 9, 2009

Obamacare’s ills

Simple alternative plan can cure Obamacare’s ills

By CHARLES KRAUTHAMMER

"Why nationalize industry when you can nationalize the people?"
-Adolf Hitler
http://michellemalkin.cachefly.net/michellemalkin.com/wp/wp-content/uploads/2009/06/ocareless.jpg

In 1986, Ronald Reagan and Bill Bradley created a legislative miracle. They fashioned a tax reform that stripped loopholes, political favors, payoffs, patronage and other corruptions out of the tax system. With the resulting savings, they lowered tax rates across the board. Those reductions, combined with the elimination of the enormous inefficiencies and perverse incentives that go into tax sheltering, helped propel a 20-year economic boom.

In overhauling any segment of our economy, the 1986 tax reform should be the model. Yet today's ruling Democrats propose to fix our extremely high quality (but inefficient and therefore expensive) health care system with 1,000 pages of additional complexity — employer mandates, individual mandates, insurance company mandates, allocation formulas, political payoffs and myriad other conjured regulations and interventions — with the promise that this massive concoction will lower costs.

This creates a Rube Goldberg system that simply multiplies the current inefficiencies and arbitrariness, thus producing staggering deficits with less choice and lower-quality care. That's why the administration can't sell Obamacare.

Let me offer a simple alternative: radical tort reform and radically severing the link between health insurance and employment.

(1) Tort reform: As I wrote recently, our crazy system of casino malpractice suits results in massive and random settlements that raise everyone's insurance premiums and creates an epidemic of defensive medicine that does no medical good, yet costs a fortune.

An authoritative Massachusetts Medical Society study found that five out of six doctors admitted they order tests, procedures and referrals — amounting to about 25 percent of the total — solely as protection from lawsuits. Defensive medicine, estimates the libertarian/conservative Pacific Research Institute, wastes more than $200 billion a year. Just half that sum could provide a $5,000 health insurance grant — $20,000 for a family of four — to the uninsured poor (U.S. citizens ineligible for other government health assistance).

What to do? Abolish the entire medical-malpractice system. Create a new social pool from which people injured in medical errors or accidents can draw. The adjudication would be done by medical experts, not lay juries giving away lottery prizes at the behest of the liquid-tongued John Edwardses who pocket a third of the proceeds.

The pool would be funded by a relatively small tax on all health-insurance premiums. Socialize the risk; cut out the trial lawyers. Would that immunize doctors from carelessness or negligence? No. The penalty would be losing your medical license. There is no more serious deterrent than forfeiting a decade of intensive medical training and the livelihood that comes with it.

(2) Real health-insurance reform: Tax employer-provided health benefits and return the money to the employee with a government check to buy his own medical insurance, just as he buys his own car or home insurance.

There is no logical reason to get health insurance through your employer. This entire system is an accident of World War II wage and price controls. It makes people stay in jobs they hate, decreasing labor mobility and therefore overall productivity. And it needlessly increases the anxiety of losing your job by raising the additional specter of going bankrupt through illness.

The health care benefit exemption is the largest tax break in the entire U.S. budget, costing the government a quarter-trillion dollars annually. It hinders health-insurance security and portability as well as personal independence. If we additionally eliminated the prohibition on buying personal health insurance across state lines, that would inject new and powerful competition that would lower costs for everyone.

Repealing the exemption has one fatal flaw, however. It was advocated by candidate John McCain. Obama so demagogued it last year that he cannot bring it up now without being accused of the most extreme hypocrisy and without being mercilessly attacked with his own 2008 ads.

But that's a political problem of Obama's own making. As is the Democratic Party's indebtedness to the trial lawyers, which has taken malpractice reform totally off the table. But that doesn't change the logic of my proposal. Go the Reagan-Bradley route. Offer sensible, simple, yet radical reform that strips away inefficiencies from the existing system before adding Obamacare's new ones — arbitrary, politically driven, structural inventions whose consequence is certain financial ruin.

No comments:

Post a Comment