Populism, that ugly beast of base emotion and lowest common denominator “logic”, is on the resurgence again. One such issue, where the masses are beginning to swoon over the prospect of big government action, is that of health care. Front and center in this debate is the shiny-haired demagogue himself, John Edwards.
The ambulance-chasing trial lawyer begins with grim prognostications on the state of our health care system. The current system is “dysfunctional,” he declares, justifying his calls for a “dramatic transformation”. And I believe he is right in finding that need, it’s what he wants to transform us into that is of concern. Thus he doesn’t often bother to say what criteria he uses to determine the system is dysfunctional. And for good reason. If he were to point to rising health care costs as a specific problem, for instance, we could turn around and point at him as a specific cause. Rising premiums in the face of so many frivolous lawsuits by trial lawyers just like John Edwards has done a lot to drive out small practices and force others to raise prices. Though a problem that should be addressed, it should be noted this doesn’t quite reach the level of primary cause.
“The problem is the HMO’s”, he might exclaim, no doubt to vociferous applause. But then we could just point our fingers at Ted Kennedy and his big govenment peers, who forced managed care onto an unsuspecting populace with passage of the HMO Act of 1973. But the true problems with health care go back further than that. To understand the cause we need simply to look at the two other big government inventions, medicare and medicaid:
. . .The proliferation of managed-care organizations (MCOs) in general, and HMOs in particular, resulted from the 1965 enactment of Medicare for the elderly and Medicaid for the poor. Literally overnight, on July 1, 1966, millions of Americans lost all financial responsibility for their health-care decisions.
Offering “free care” led to predictable results. Because Congress placed no restrictions on benefits and removed all sense of cost-consciousness, health-care use and medical costs skyrocketed. Congressional testimony reveals that between 1965 and 1971, physician fees increased 7 percent and hospital charges jumped 13 percent, while the Consumer Price Index rose only 5.3 percent. The nation’s health-care bill, which was only $39 billion in 1965, increased to $75 billion in 1971. Patients had found the fount of unlimited care, and doctors and hospitals had discovered a pot of gold.
It was this Congress created issue of rising cost, in fact, that gave big government power-grabbers an excuse to stake out even more control over health care.
. . .This stampede to the doctor’s office, through the U.S. Treasury, sent Congress into a panic. It had unlocked the health-care appetite of millions, and the results were disastrous. While fiscal prudence demanded a hasty retreat, Congress opted instead for deception.
. . . Advocates of universal coverage saw this financial crisis as an opportunity to advance national health care through the fledgling HMO. Legislation encouraging members of the public to enter HMOs, where individual control over health-care decisions was weakened, would likely make the transition to a national health-care system, where control is centralized at the federal level, less noticeable and less traumatic. By 1971, the administration had authorized $8.4 million for policy studies to examine alternative health insurance plans for designing a “national health insurance plan.”
Senator Edward M. Kennedy, a longtime advocate of national health care, proceeded to hold three months of extensive hearings in 1971 on what was termed the “Health Care Crisis in America.” Following those hearings, he held a series of hearings “on the whole question of HMO’s.”
Introducing the HMO hearings, Kennedy said,”We need legislation which reorganizes the system to guarantee a sufficient volume of high quality medical care, distributed equitably across the country and available at reasonable cost to every American. It is going to take a drastic overhaul of our entire way of doing business in the health-care field in order to solve the financing and organizational aspects of our health crisis. One aspect of that solution is the creation of comprehensive systems of health-care delivery.”
This seperation of consumer from payer has had a predictable market effect on health care. When cost is not an issue to the individual deciding which service to use, there is no force keeping costs down. And the inevitable conflict between payer and consumer that results from contrasting interests, quality care versus cost, only serves to frustrate individuals. The proliferation of third party payers is what makes our system dysfunctional. The litany of big government solutions currently being offered are only going to make this problem worse, resulting in a health care system offering even less quality for more cost. A true solution would involve empowering the consumer, not granting ever more control to big government.
Ted Kennedy failed. He did not deliver anything even remotely resembling a “system to guarantee a sufficient volume of high quality medical care, distributed equitably across the country and available at reasonable cost to every American.” John Edwards is a snake oil salesman offering the same failed concoction previously peddled by the likes of Ted Kennedy and later by Hillary Clinton. We learned our lesson in the 90’s, let’s not now forget it only a decade later.
I serve as Vice President of the Center for Freedom and Prosperity, a non-profit think tank dedicated to preserving tax competition and free markets. This site features my personal views, which are not reflective of CF&P.