How cap­i­tal­ism could help health care

The Washington Times Weekly - - Commentary - David Lim­baugh

Amer­ica has the great­est health care in the his­tory of the uni­verse, but the sys­tem is fraught with prob­lems that are get­ting worse ev­ery day. It has be­come so com­plex that prospects for sig­nif­i­cant re­form seem bleak. But putting aside po­lit­i­cal con­sid­er­a­tions, the so­lu­tions might be sim­pler than we as­sume.

The main prob­lem is that we have crowded out mar­ket forces and re­duced con­sumer choice. What the sys­tem needs is a ro­bust dose of cap­i­tal­ism.

No one has done a bet­ter job of mak­ing that case than Dr. David Gratzer in his book, “The Cure: How Cap­i­tal­ism Can Save Amer­i­can Health Care.” The late Mil­ton Fried­man en­dorsed Dr. Gratzer’s rec­om­men­da­tions in his fore­word to the book.

Mr. Fried­man ex­plained that be­fore World War II, med­i­cal care, like other con­sumer goods and ser­vices, was dis­pensed through a mostly free mar­ket. Pa­tients could choose their own doc­tors and were re­spon­si­ble for pay­ing the fees. Health care in­sur­ance gen­er­ally didn’t cover rou­tine treat­ment, only cat­a­strophic events.

But when wartime wage and price con­trols led to a short­age of work­ers, em­ploy­ers of­fered ben­e­fits, in­clud­ing health care, to make jobs more en­tic­ing. Even­tu­ally, the gov­ern­ment re­in­forced the prac­tice by ex­empt­ing this ben­e­fit from tax­a­tion. In time, our mar­ket-driven sys­tem be­came a “top-down” bu­reau­cracy, with “ex­plod­ing costs” and “wide­spread dis­sat­is­fac­tion” of pa­tients and providers.

Dr. Gratzer rec­om­mends a three-pronged so­lu­tion cen­tered on un­leash­ing mar­ket forces. He would make health in­sur­ance por­ta­ble, pri­mar­ily by elim­i­nat­ing the em­ployer-paid health in­sur­ance de­duc­tion. He would shore up Medi­care, par­tially by set­ting aside part of the pay­roll tax into reg­is­tered health ac­counts, to be in­vested in the mar­ket. Fi­nally, he would at­tempt to “cre­ate a mar­ket that will cat­alyze in­no­va­tion in drugs and med­i­cal ser­vices.”

Dr. Gratzer says that by rein­tro­duc­ing mar­ket forces, “Amer­i­can health care will be­come cheaper, bet­ter, and more ac­ces­si­ble for ev­ery­one. Cap­i­tal­ism is not the cause of Amer­ica’s health-care prob­lem. It is the cure.”

How true. But sadly, the mar­ket approach is pre­cisely the op­po­site of what Democrats — and some Repub­li­cans — fa­vor.

Lib­er­als have this re­gret­table habit of in­creas­ing gov­ern­ment con­trol over in­sti­tu­tions and sec­tors of the econ­omy, then deny­ing re­spon­si­bil­ity when their sup­pos­edly good in­ten­tions just ex­ac­er­bate the prob­lems.

We’ve seen this from the war on poverty and wel­fare, to ed­u­ca­tion. But with blind faith in their failed pre­scrip­tions, they al­ways de­mand heav­ier doses of the same poi­sons: gov­ern­ment money and con­trol.

One would hope there would be such an ad­verse re­ac­tion to full­blown so­cial­is­tic poli­cies that sup­port­ing them would be po­lit­i­cal sui­cide. In­deed, many con­ser­va­tives be­lieve that uni­ver­sal health care is still so un­pop­u­lar that Hil­lary Clin­ton’s spon­sor­ship of it in the 1990’s could sabotage her pres­i­den­tial am­bi­tions to­day.

But I fear Amer­i­cans’ con­cern over health care has grown enor­mously since Hil­laryCare im­ploded. There is so much anx­i­ety about ris­ing costs that it is con­ceiv­able — per­ish the thought — that a politi­cian’s en­dorse­ment of so­cial­ized medicine could ac­tu­ally ben­e­fit him po­lit­i­cally.

In fact, just two weeks ago, a news story re­ported, “As Democrats pre­pare to take con­trol of the 110th Congress a new approach to health­care re­form is ex­pected — uni­ver­sal cov­er­age.”

Imag­ine that. The elec­torate sent Repub­li­cans pack­ing in Novem­ber, due, in part, to their un­bri­dled spend­ing pro­cliv­i­ties, and now Democrats be­lieve they have a man­date to spend reck­lessly greater amounts. (We tried to warn you about the dan­gers in “throw­ing the bums out,” just to re­place them with big­ger bums.)

But there is a method to the Democrats’ mad­ness. The same news story re­veals — dis­turbingly — that “a ma­jor­ity of Amer­i­cans would fa­vor gov­ern­ment in­ter­ven­tion.” The good news is that the ma­jor­ity is not yet be­hind whole­sale “gov­ern­ment-run health care.”

Then again, Democrats have not yet revved up their pro­pa­ganda en­gines. If you think they shame­lessly dem­a­gogued Pres­i­dent Bush’s noble ef­forts to re­form So­cial Se­cu­rity, just wait ‘til they get the chance to de­mo­nize any­one coura­geous enough to pro­pose rea­son­able, mar­ket re­forms to health care.

John Ed­wards will prob­a­bly res­ur­rect his “two Amer­i­cas” stump speech. John Kerry will tell us that if it hadn’t been for Mr. Bush’s war for oil ev­ery­one would be cov­ered. Al Gore will say that Mr. Bush’s re­fusal to sur­ren­der Amer­ica’s car keys to Ky­oto has in­ten­si­fied global warm­ing, which has made us all sick and health care costs sky­rocket.

Bill Clin­ton will say, “I did not have sex with that wo­man, Ms. Lewin­sky.” Hil­lary will say, “Yes, you did. But if in­stead you had put more en­ergy into my health care re­form plan, I could have run (and won) in 2000 in­stead of that id­iot Al Gore.”

Let’s not un­der­es­ti­mate the grav­ity of the prob­lems with our health-care sys­tem, nor the stakes in­volved in choos­ing the right cure.

David Lim­baugh, the brother of talk ra­dio host Rush Lim­baugh, is na­tion­ally syn­di­cated.

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