Hellish Health Reform

By Ronald E. Bachman

The loudest voices clamoring for health “reform” in Washington are seldom considering health or health care first. The furor is about power: Controlling $2.5 trillion gives politicians control over election results.  

Legislation stumbling through Congress is loaded with new controlling councils, agencies, boards, departments and other entities, all with the power to spread tax dollars around to cronies through “planning and establishment” grants. The word “grant” shows up 421 times in one piece of legislation.  

This nation already has the largest government run health care system in the world. The government controls 50 cents of every health care dollar spent in the United States. Federal programs of Medicare, Medicaid, S-CHIP, VA health, and Tri-Care are responsible for half of the health care in the country. Yet these government-controlled programs exemplify out-of-control spending, waste, fraud, abuse and the lack of modern technology that President Obama so confidently states will be changed once all health care is under control of the federal bureaucracy.  

The reason the president’s health reform makes little sense to much of the public is that most Americans inherently know that the federal government cannot solve the problems that are created by current federal government ineptitude. Many are confused by the proposals because they believe that the political class is trying to improve health and health care for all. It is not.  

If improving health and controlling health care costs was the goal, then the president and Congress would not ignore the economic facts of what they are trying to do – but they do exactly that.  The non-partisan study by the American Academy of Actuaries, identified a proven solution where “total savings generated could be as much as 12 percent to 20 percent” and future “trend rates (are) lower than traditional plans by approximately 3 percent to 5 percent.” Importantly, the Academy report also concludes that in these plans “recommended care for chronic conditions (are) at the same or higher level than traditional plan participants” and the “studies reported a higher incidence of physicians following evidence-based care protocols.” 

The basis for these remarkable results is the use of consumer-directed health plans. Health care consumerism has been developing in the employer and personal insurance market for nearly a decade. The Academy report is unbiased evidence of amazing results. New-generation plans being developed and implemented by employers and purchased by individuals show even higher levels of savings. Health care consumerism encourages personal responsibility with rewards and incentives for healthy choices and adherence to physician treatment plans. They are good for both the healthy and those suffering from chronic conditions.  

But consumerism is rejected by the president, even though he speaks many of the words and uses the language of consumerism. The Senate bill would make it illegal to reward and incentivize those who take the initiative to control their blood pressure, lower cholesterol, stop smoking or meet other health-related standards, yet these are exactly the kind of things that would most improve health and lower costs.  

Changing federal and state laws to support the growth of health care consumerism by promoting personal responsibility can reduce the numbers of the uninsured by 15 million – and that’s without any government expenditures.  

If President Obama and Congress have ideas proven to control costs and improve the quality of care, they need to start by “reforming” the 50 percent of health care already under government control. They must show the country, employers and voters how to successfully implement health reform before the 180 million people with private health insurance – many of them voluntarily moving towards health-care consumerism – are forced to suffer the consequences of political maneuvering.

Ronald E. Bachman FSA, MAAA is a Senior Fellow at the Georgia Public Policy Foundation, an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. He is also a Senior Fellow at the Center for Health Transformation, an organization founded by former U.S. House Speaker Newt Gingrich. Mr. Bachman worked as an outside expert with members of Congress and the Clinton administration during the 1993-94 health reform. Nothing written here is to be construed as necessarily reflecting the views of the Foundation or the Center for Health Transformation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (August 14, 2009). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.