Understanding Health Care – Part I


Do you understand health care? Most Americans list health care as one of their leading concerns but many do not really understand the issue, including many physicians and nurses.

Most Americans would agree that providing good healthcare for everyone should be a priority. That’s why most support the idea of universal healthcare coverage. But the issue is far more complex than simply giving everyone a health insurance card to put in their wallet. After all, what good is that card if you can’t get the healthcare that you need?

A recent article written by healthcare economist, John C. Goodman, illustrates the point. Goodman is a well-known and highly respected expert who freely criticizes both Republicans and Democrats when their rhetoric doesn’t make sense. Goodman cites anecdotal evidence of failures in providing good healthcare from National Nurses United, the country’s largest nurses’ union. To prevent such failures in the future, the union favors a universal, government-run health care system. A leading editorial in the New York Times endorsed their way of thinking.

Goodman correctly points out that such failures occur every day – in every country in the world. And more than 90 percent of the time, the insurer is the government. He reports that one out of every six British cancer patients is denied access to the latest cancer drugs because the British National Health Service has decided that the drugs are too costly relative to the gain. In other words, believing that eliminating private health insurance will solve these problems is naive in the extreme!

Medicare for All, single-payer healthcare, and socialized medicine are just euphemisms for government control of all healthcare. It means the elimination of private health insurance – which means the elimination of all competition in healthcare. If you believe the current system fails to deliver the quality of care you deserve, just imagine what it will be like when there is no alternative. This is the situation now in the Veteran’s Administration and we all know the scandal just a few years ago when veterans were dying while waiting to see a doctor. That’s what you can expect from government-controlled healthcare.

Goodman lists five fundamental truths we need to understand about healthcare:

  • In a Public System, Patient Needs Compete Against Taxpayer Needs
  • Personal is Better than Bureaucratic
  • Competition is Better Than Monopoly
  • Profit is Just Another Cost
  • Markets Work


In a Public System, Patient Needs Compete Against Taxpayer Needs

Goodman tries to help us understand healthcare economics. A dollar is a dollar. It doesn’t matter whether it is spent on healthcare or something else. When it is spent for one thing, it isn’t available to spend on something else. That means healthcare spending is a matter of priorities. Just as a family must prioritize spending within a budget, government must do the same. The real issue is how should decisions on health care spending be made?

In a government-controlled healthcare system, spending on healthcare must compete with spending on other taxpayer needs, like defense, education, and welfare. Goodman says on the same day as the Timeseditorial about private healthcare failures, the Dallas Morning News reported a horrible incident in the Texas Medicaid program. A severely disabled child who was not given proper care is now in a “vegetated state.” This is only one of hundreds of examples of patient abuse the newspaper discovered in a year-long investigation of the state’s Medicaid program. In other words, government-run programs can have disastrous outcomes at least as bad or worse than private healthcare.

Personal Is Better than Bureaucratic

Every time we go to the drug store and purchase over-the-counter drugs we are making a choice. We are choosing lower prices and convenience over going to see the doctor where we pay higher prices and suffer inconvenience. We are opting for self-medication over seeking professional advice. Most of the time this works well for us but sometimes it does not. Sometimes that cough that won’t go away is pneumonia instead of the common cold.

Goodman is the “father of Health Savings Accounts”, an idea he pioneered in 2003 to give consumers a larger role in making their own healthcare decisions. By empowering consumers with HSAs, he gave patients more control over their healthcare spending. This is good for controlling the rising costs of healthcare and for making the system more efficient. But this kind of empowerment would be eliminated by a government-run system. When bureaucrats are in charge, there is only one way to do everything.


(For more on Understanding Health Care, see Part II next week.)


Medicare for All Dead Already


Medicare for All has come and gone already. That’s the opinion of insurance analyst, Robert Laszewski. He knows what he’s talking about.

The proof is in the response by Democrats to Senator Elizabeth Warren’s rollout of her Medicare for All plan. Until she laid out the details of her plan she had the greatest momentum of any presidential candidate. But since the rollout her numbers are dropping fast and Mayor Pete Butigieg is the latest darling of the left. It seems that even Democrats can’t stomach Medicare for All.

According to the Real Clear Politics average of national Democratic primary polls, Warren has dropped from a high of 27% in October’s average to 16% at the end of November. In New Hampshire alone, her support fell by half, while she lost five points in Iowa during the same period.

The reason for this plummet in the polls is obvious – voters don’t believe her claims that Medicare for All will lower healthcare costs and not require huge tax increases on the middle class. Avik Roy, healthcare economist, states, “Elizabeth Warren’s health care plan could increase the deficit by more than $15 Trillion over decade. The Warren plan is overly optimistic in its effectiveness at raising tax revenue without harming economic growth. In addition, the plan will incentivize soaring demand for health care services, increasing health care spending.”

Laszewski says Warren is already backtracking from her Medicare for All plan by advocating the Public Option for ObamaCare. She now says she would first enact a voluntary public option, toward an eventual move to Medicare for All, over a period of three years, as she built public support for a single-payer system.

This is precisely the Biden plan, and the Obama plan, and the Pelosi plan, and the Harry Reid plan – exactly what they all stated before the passage of ObamaCare. They all want to get to a single-payer plan eventually – just as soon as they can convince enough voters to go along with them!

I wrote an earlier post called Democratic Healthcare Choices in which I described three different Democratic healthcare plans of presidential candidates that all arrive eventually at the same destination – single-payer healthcare. There was the immediate approach of Bernie Sanders and Elizabeth Warren, called Medicare for All, which promised single-payer within 4 years. Then there was the middle of the road approach of Kamala Harris that promised single-payer in 10 years. Last, but not least, there was the Biden plan of single-payer healthcare sooner or later. Different roads to the same destination.

Now that it is clear, (just as in 2010) that the timing isn’t quite right, yet, for immediate elimination of all private health insurance – as Medicare for All demands – Warren will wait a little longer like Biden to eliminate your private health insurance when it is forced out by the Public Option. (To understand why that is inevitable, read my post Pubic Option Kills Private Insurance.)

That leaves only Sanders still advocating for immediate Medicare for All, but that’s not surprising since it was his idea in the first place. But don’t think for a minute any of the other candidates will spare your private health insurance. It’s only a matter of time until every Democratic presidential candidate will put us all on government-controlled healthcare.


Medicare for All Still Unpopular


Medicare for All has been unpopular for the last 40 years – and it’s still just as unpopular. That’s the message from healthcare industry analyst Robert Laszewski.

Laszewski, in his Healthcare Marketplace and Policy Review, reminds us that President Jimmy Carter ran on a Medicare for All platform in 1976. But despite having Democratic majorities in the House and Senate, a filibuster-proof 61 seats in the Senate and an overwhelming 292 seats in the House, Carter was unable to convince his own party to approve Medicare for All.

The same thing happened in 1993 during the Clinton presidency. The Democrats then controlled majorities in both houses of Congress, 57 seats in the Senate and 258 in the House, but only about half of these were in favor of a single-payer healthcare system.

Fast forward to 2009 during the Obama administration. Though President Obama, House Speaker Nancy Pelosi, and Senate Majority leader Harry Reid all favored single-payer healthcare, they couldn’t convince a majority of their own party to proceed forward with a complete government takeover of healthcare. Instead, they pushed through the Affordable Care Act (ObamaCare), without a single Republican vote, as a compromise to their own party.

Laszewski says not much has changed today. As of September, 2019, only about half of the Democratic caucus (118) supports Medicare for All. The other half supports strengthening ObamaCare. The Democratic presidential candidates all seemed to favor Medicare for All in the early campaign debates but some are modifying their position lately to favor stronger support of ObamaCare.

However, new front-runner Elizabeth Warren still strongly supports Medicare for All as does its founder, Bernie Sanders. Only Joe Biden favors strengthening ObamaCare among the leading candidates.

Laszewski explains, “Maybe most telling, Democratic House Speaker Nancy Pelosi recently said, “God bless the 2020 Democratic presidential candidates putting forth Medicare for all proposals, but know what that entails. I believe the path to ‘health care for all’ is a path following the lead of the Affordable Care Act. Let’s use our energy to have health care for all Americans — and that involves over 150 million families that have it through the private sector.”

Pelosi is savvy enough to understand that eliminating private employer-provided healthcare for over 150 million Americans is a losing proposition.

Moreover, that proposal flies in the face of a major Democratic constituency – labor unions. It is a major function of labor unions to negotiate healthcare insurance benefits for employees with their major corporate employers. Eliminating private health insurance will eliminate a major reason for the existence of labor unions. If there is one thing that labor unions care more about than anything it is their continued existence.

Lastly, even The Washington Post, a major supporter of liberal and Democratic causes, believes Medicare for All is a big mistake. Here is an excerpt from a recent editorial:

On the wildly unrealistic side is Mr. Sanders’s plan, which Sen. Elizabeth Warren (Mass.) also supports. Mr. Sanders would eliminate private insurance and enroll everyone in a government-run plan that is, in fact, far more generous than Medicare. Even if Americans wanted to give up their private insurance, Mr. Sanders’s plan to eliminate premiums, co-payments and other cost-sharing, while offering Americans a massive suite of free benefits, would either be unimaginably expensive or force unsustainably huge cuts in payments to doctors and hospitals. Mr. Sanders points to other countries with “single-payer” systems to prove that building one in the United States is possible. In fact, other nations are far less generous than what Mr. Sanders proposes.

With Joe Biden dropping rapidly in the polls and others like Elizabeth Warren and Bernie Sanders rising, Democrats should be nervous about a presidential campaign platform that includes Medicare for All.