Sunday, March 14, 2010

A health-care reform honeymoon won't last long

Published in The Tennessean, March 14, 2010

A health-care reform honeymoon won't last long

by Richard J. Grant

We're about to get a health-care wedgie. But at least we see the perpetrators coming; and most Americans don't like what they see.

As Democrats stalk us with the thin end of another wedge to drive more government interference into our health-care system, a majority of Americans remain firmly opposed. They know that wedges always get wider at the other end.

All government programs have a tendency to expand. Governments already control more than half the dollars spent on US medical care. Government regulations already restrict most of what doctors, hospitals, and insurance companies can do.

Apparently this is not working out well. But instead of reducing the dose, Democrats want to increase the level of government control and interference. Those with socialist eyes cannot see. Those with socialist hearts do not care.

Whether or not it is recognized, the biggest single reason for complaints about our current medical care system is the effects of government interference. When regulations cause problems, the first resort is too often to add more regulations. They put Band-Aids on Band-Aids until the political bands are too thick to dissolve.

It is well-known that the president's ultimate goal is a universal, single-payer health care system. Yet we are told that there will be no "public option" or government takeover. We are even told that the president's proposal, which is very similar to the Senate’s bill, will be self-funding. But this is nonsense, as pointed out by Rep. Paul Ryan of Wisconsin, the ranking Republican on the House Budget Committee, at the president's recent "summit on health care."

When the double counting is corrected, and the hidden "doc fix" expenditures are put back into the total, Rep. Ryan has found that "the full 10-year cost of the bill has a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit." He described the bill as being "full of gimmicks and smoke-and-mirrors." Rep. Ryan is a polite man.

Government interventionists almost always underestimate, or understate, the full cost of their proposals. And their programs, once implemented, tend to grow. Each succeeding political generation seems to need to up the ante to impress its supporters.

Tommy Douglas, who is considered to be the father of Canadian socialized medicine (and really was the grandfather of Kiefer Sutherland), was not so extreme as to believe that such a system could be 100 percent funded by taxes. He believed that a system of co-pay was necessary in order to maintain a link to personal responsibility, and to help prevent the costs from getting out of control. But within 20 years the federal government had created a single-payer system.

What happened in Canada, due to the mixture of "progressive" ideas and perennial political incentives, is now unfolding in the United States. In Canada, there was a honeymoon period lasting some three decades during which the relatively free Canadian economy subsidized the medical sector and consumed much of its previous medical capital. As problems became more visible, and people better understood the causes, political resistance began to grow.

The United States might also have a brief honeymoon, but it won't last long. We know what happened in Canada and elsewhere. Also, Canadians who need urgent care unavailable in Canada have the US as a nearby failsafe destination.

But as Obamacare unfolds, Americans will have no such convenient destination (and neither will Canadians). Other, more distant, countries will increasingly take on that role.

What the president and his congressional allies are attempting to force upon us will be restrictive and expensive. Sweet promises will quickly turn sour as incentives are distorted, innovation is misdirected, and personal responsibility is disconnected.

As free individuals, and as patients, we could deal directly with our doctors and get along just fine. But when a politician tries to put on the rubber glove, we know that what's coming cannot be good.

Richard J. Grant is a professor of finance and economics at Lipscomb University and a scholar at the Tennessee Center for Policy Research. His column appears on Sundays. E-mail:

Copyright © Richard J Grant 2010