Bradley Hankins

For those of you who have been keeping up with the latest happening in Washington, you probably know that C-SPAN has decided they want to cash in on a promise made by President Obama. What was the promise?

“I’m going to have all the negotiations around a big table. We’ll have doctors and nurses and hospital administrators. Insurance companies, drug companies — they’ll get a seat at the table, they just won’t be able to buy every chair. But what we will do is, we’ll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies. And so, that approach, I think is what is going to allow people to stay involved in this process.”

Not only did he promise such things once, but eight times! How can one person fail to complete such an easy promise? All you have to do is set up a couple of cameras and microphones and you can have it on air so the country can see what is really going on.

With this failed promise, one could come to the conclusion that maybe President Obama and the Democrats in Congress are hiding something. What would they be hiding that the American people shouldn’t hear? Let me just say, if you are in Congress, and you need to hide something because you are afraid of what the American people will think, maybe you shouldn’t be doing what you are doing.

Not only is it Fox News, conservative radio, and conservative bloggers who are pouncing on the President with this, but even C-SPAN’s president is asking what happened. Even CBS News and CNN have talked about the failed promise to televise the debates.

America has seen Healthcare reform backfire against those who wish to pass it before. Will Healthcare reform be what brings down the Democratic Congress and the “President of Change” Barack Obama? The 2010 mid-term elections will be the election that tells us so.

From the Mises institute. Drastic changes? Sure, but it all makes sense, and would work to make the health-care system better in America.

It’s true that the US health-care system is a mess, but this demonstrates not market but government failure. To cure the problem requires not different or more government regulations and bureaucracies, as self-serving politicians want us to believe, but the elimination of all existing government controls.

It’s time to get serious about health-care reform. Tax credits, vouchers, and privatization will go a long way toward decentralizing the system and removing unnecessary burdens from business. But four additional steps must also be taken:

1. Eliminate all licensing requirements for medical schools, hospitals, pharmacies, and medical doctors and other health-care personnel. Their supply would almost instantly increase, prices would fall, and a greater variety of health-care services would appear on the market.

   Competing voluntary accreditation agencies would take the place of compulsory government licensing — if health-care providers believe that such accreditation would enhance their own reputation, and that their consumers care about reputation, and are willing to pay for it.

   Because consumers would no longer be duped into believing that there is such a thing as a “national standard” of health care, they would increase their search costs and make more discriminating health-care choices.

2. Eliminate all government restrictions on the production and sale of pharmaceutical products and medical devices. This means no more Food and Drug Administration, which presently hinders innovation and increases costs.

   Costs and prices would fall, and a wider variety of better products would reach the market sooner. The market would force consumers to act in accordance with their own — rather than the government’s — risk assessment. And competing drug and device manufacturers and sellers, to safeguard against product liability suits as much as to attract customers, would provide increasingly better product descriptions and guarantees.

3. Deregulate the health-insurance industry. Private enterprise can offer insurance against events over whose outcome the insured possesses no control. One cannot insure oneself against suicide or bankruptcy, for example, because it is in one’s own hands to bring these events about.

   Because a person’s health, or lack of it, lies increasingly within his own control, many, if not most health risks, are actually uninsurable. “Insurance” against risks whose likelihood an individual can systematically influence falls within that person’s own responsibility.

   All insurance, moreover, involves the pooling of individual risks. It implies that insurers pay more to some and less to others. But no one knows in advance, and with certainty, who the “winners” and “losers” will be. “Winners” and “losers” are distributed randomly, and the resulting income redistribution is unsystematic. If “winners” or “losers” could be systematically predicted, “losers” would not want to pool their risk with “winners,” but with other “losers,” because this would lower their insurance costs. I would not want to pool my personal accident risks with those of professional football players, for instance, but exclusively with those of people in circumstances similar to my own, at lower costs.

   Because of legal restrictions on the health insurers’ right of refusal — to exclude any individual risk as uninsurable — the present health-insurance system is only partly concerned with insurance. The industry cannot discriminate freely among different groups’ risks.

   As a result, health insurers cover a multitude of uninsurable risks, alongside, and pooled with, genuine insurance risks. They do not discriminate among various groups of people which pose significantly different insurance risks. The industry thus runs a system of income redistribution — benefiting irresponsible actors and high-risk groups at the expense of responsible individuals and low-risk groups. Accordingly, the industry’s prices are high and ballooning.

   To deregulate the industry means to restore it to unrestricted freedom of contract: to allow a health insurer to offer any contract whatsoever, to include or exclude any risk, and to discriminate among any groups of individuals. Uninsurable risks would lose coverage, the variety of insurance policies for the remaining coverage would increase, and price differentials would reflect genuine insurance risks. On average, prices would drastically fall. And the reform would restore individual responsibility in health care.

4. Eliminate all subsidies to the sick or unhealthy. Subsidies create more of whatever is being subsidized. Subsidies for the ill and diseased promote carelessness, indigence, and dependency. If we eliminate such subsidies, we would strengthen the will to live healthy lives and to work for a living. In the first instance, that means abolishing Medicare and Medicaid.

Only these four steps, although drastic, will restore a fully free market in medical provision. Until they are adopted, the industry will have serious problems, and so will we, its consumers.

http://mises.org/story/3643