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Government is What’s Ailing American Health Care

Brett Davis

Posted on April 21, 2019 02:55

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Overregulation is the disease, not the cure.

ObamaCare has not solved America’s crisis in health care, hence the current push by Democrats for Medicare for all. This is a fundamental mistake in that it is government interference distorting the health care market, resulting in the current dysfunctional system characterized by an overreliance on third-party payers, a lack of price transparency and, most distressingly, exorbitant costs for consumers.

Nearly every federal health program has seen costs explode – almost always “unexpectedly” – after being enacted. Medicare, to cite but one of the nation’s so-called entitlement programs, costs nearly 10 times as much as projected in its first 25 years. Even cost estimates for something as recent as ObamaCare have turned out to be off the mark, with per-enrollee costs nearly 49 percent higher than expected.

Why would anyone think the results will be any different with more government entanglement in the industry? The last half century or so would seem to be a cautionary tale about government involvement in health care. In 1960, less than 5 percent of health care spending in the U.S. came from government, but after decades of Medicare and Medicaid, combined with an aging population, that share has increased to more than 50 percent of all such spending. As in the case with college tuition and housing, so also in medical care: When government foots more and more of the bill, the bill grows more and more, and disproportionately so, relative to other prices.



America’s decades-long attempt to tax, regulate, mandate and subsidize its way to solvency and prosperity in health care is a bust. Why not focus on lowering health care costs through competition, consumer choice and price transparency, not to mention restoring the concept of insurance to health insurance? (And let’s not kid ourselves: With the federal government the dominant force in American health care for decades, America does not have a competitive market in health care, so claiming the nation’s current health care woes prove a more free market system doesn’t work is nonsensical.)

Getting government out of the way in the form of deregulation would seem to be the way to go. After all, deregulation has worked to lower costs and improve service in the airline, trucking and telecommunications industries.

Even including an element of competition in government programs can save money, as evidenced by the design of Medicaid Part D. In 2005, prior to full implementation of the law in 2006, the Congressional Budget Office estimated that spending on the drug benefit in 2012 would be $126.8 billion. Actual spending on the program was $55 billion, 57 percent below the CBO’s 2005 estimate.

Yet in spite of all the evidence against further government intrusion into health care and all of the evidence in favor of deregulating health care, many on the left inexplicably believe that injecting more government into health care will work this time. So much for “First, do no harm.”

Brett Davis

Posted on April 21, 2019 02:55

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