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THE CONSERVATIVE REVIEW - December 1, 2009
Kill the Bills. Do Health Reform Right
by Charles Krauthammer
WASHINGTON - The United States has the best health care in
the world -- but because of its inefficiencies, also the
most expensive. The fundamental problem with the 2,074-page
Senate health-care bill (as with its 2,014-page House
counterpart) is that it wildly compounds the complexity by
adding hundreds of new provisions, regulations, mandates,
committees and other arbitrary bureaucratic inventions.
Worse, they are packed into a monstrous package without any
regard to each other. The only thing linking these changes
-- such as the 118 new boards, commissions and programs --
is political expediency. Each must be able to garner just
enough votes to pass. There is not even a pretense of a
unifying vision or conceptual harmony.
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The result is an overregulated, overbureaucratized system
of surpassing arbitrariness and inefficiency. Throw a dart
at the Senate tome:
-- You'll find mandates with financial penalties -- the
amounts picked out of a hat.
-- You'll find insurance companies (who live and die by
their actuarial skills) told exactly what weight to give
risk factors, such as age. Currently insurance premiums
for 20-somethings are about one-sixth the premiums for
60-somethings. The House bill dictates the young shall
now pay at minimum one-half; the Senate bill, one-third
-- numbers picked out of a hat.
-- You'll find sliding scales for health-insurance
subsidies -- percentages picked out of a hat -- that will
radically raise marginal income tax rates for middle-
class recipients, among other crazy unintended consequences.
The bill is irredeemable. It should not only be defeated.
It should be immolated, its ashes scattered over the
Senate swimming pool.
Then do health care the right way -- one reform at a time,
each simple and simplifying, aimed at reducing complexity,
arbitrariness and inefficiency.
First, tort reform. This is money -- the low-end estimate
is about half a trillion per decade -- wasted in two ways.
Part is simply hemorrhaged into the legal system to benefit
a few jackpot lawsuit winners and an army of extravagantly
rich malpractice lawyers such as John Edwards.
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The rest is wasted within the medical system in the
millions of unnecessary tests, procedures and referrals
undertaken solely to fend off lawsuits -- resources
wasted on patients who don't need them and which could be
redirected to the uninsured who really do.
In the 4,000-plus pages of the two bills, there is no
tort reform. Indeed, the House bill actually penalizes
states that dare "limit attorneys' fees or impose caps
on damages." Why? Because, as Howard Dean has openly
admitted, Democrats don't want "to take on the trial
lawyers." What he didn't say -- he didn't need to -- is
that they give millions to the Democrats for precisely
this kind of protection.
Second, even more simple and simplifying, abolish the
prohibition against buying health insurance across state
lines.
Some states have very few health insurers. Rates are high.
So why not allow interstate competition? After all, you
can buy oranges across state lines. If you couldn't,
oranges would be extremely expensive in Wisconsin,
especially in winter.
And the answer to the resulting high Wisconsin orange
prices wouldn't be the establishment of a public option
-- a federally run orange-growing company in Wisconsin
-- to introduce "competition." It would be to allow
Wisconsin residents to buy Florida oranges.
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But neither bill lifts the prohibition on interstate
competition for health insurance. Because this would
obviate the need -- the excuse -- for the public option,
which the left wing of the Democratic Party sees
(correctly) as the royal road to fully socialized
medicine.
Third, tax employer-provided health insurance. This is an
accrued inefficiency of 65 years, an accident of World War
II wage controls. It creates a $250 billion annual loss of
federal revenues -- the largest tax break for individuals
in the entire federal budget.
This reform is the most difficult to enact, for two
reasons. The unions oppose it. And the Obama campaign
savaged the idea when John McCain proposed it during
last year's election.
Insuring the uninsured is a moral imperative. The problem
is that the Democrats have chosen the worst possible
method -- a $1 trillion new entitlement of stupefying
arbitrariness and inefficiency.
The better choice is targeted measures that attack the
inefficiencies of the current system one by one -- tort
reform, interstate purchasing and taxing employee benefits.
It would take 20 pages to write such a bill, not 2,000 --
and provide the funds to cover the uninsured without wreck-
ing both U.S. health care and the U.S. Treasury.
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