- The Washington Times - Tuesday, April 7, 2009

COMMENTARY:

Of all President Obama's transformative domestic policy proposals, none is more far-reaching and less transparent than health care. What most Washington policy people mean when they talk about the president's health care proposal was described in the lead paragraph of Robert Pear's meticulous article in the New York Times on Wednesday.

“Efforts to overhaul the health care system have moved ahead rapidly, with the insurance industry making several major concessions and the chairmen of five congressional committees reaching a consensus on the main ingredients of legislation. The chairmen, all Democrats, agree that everyone must carry insurance and that employers should be required to help pay for it. They also agree that the government should offer a public health insurance plan as an alternative to private insurance.”

Also, Mr. Obama wants to digitalize and collect all patient health care data - initially because such data could assist in assessing best practices.

This is, for certain, a controversial and vastly expensive universal coverage proposal: It will cost about $1.5 trillion to $2 trillion over 10 years. But the full scope of Mr. Obama's health care policy ambitions cannot be understood without accounting for his claim that he needs to do health care this year as part of his long-term plans to reduce the deficit.

While some emergency-room and related cost savings will be realized if everyone has health insurance, no one seriously suggests that such savings would even put a dent in the trillions of dollars this proposal will cost in tax increases or debt issuance in the first 10 years.

Mr. Obama's claim only make sense if this huge proposal is merely the first step in a series of timed policy changes on a path toward near comprehensive federal government regulation and management of health care.

What follows is my surmise of what the administration hopes the path to America's future health care system will look like. Currently, a little less than one-fifth of the American economy is devoted to health care. Of that, about 68 percent of it is in the private sector, with 32 percent run by the government (Medicare, Medicaid, Veterans Affairs, Defense Department health services, etc.)

This year, the Democrats hope to pass the above described universal coverage law, which would include creating a public insurance option - that is, the federal government would offer health insurance plans to compete with the private-sector health insurance that most of us purchase through our employers. In the face of government cost-undercutting of private-sector health insurance, more and more Americans would choose to come under the federal health system.

At some point, the age eligibility for Medicare may be lowered, (perhaps to 50 or 55) and the income ceiling for Medicaid may be raised, thus further increasing the percentage of the public covered by government rather than private-sector health insurance.

According to Tom Daschle (Mr. Obama's first choice to design and implement his health care policy), in order to manage federal costs by prescribing permissible treatment procedures and medical technological use (and proscribing diagnostic and treatment methods deemed not cost-effective) a regulatory board to establish standards for public health care delivery in the United States would be modeled on how the Federal Reserve Board and Securities and Exchange Commission oversee banks and corporations.

Technically, the board would oversee only the public health systems. However, Mr. Daschle suggested in his book last year on how to redesign health care: “Congress could opt to go further with the board's recommendations. It could, for example, link the tax exclusion for health insurance to insurance that complies with the board's recommendation.”

After first squeezing the private insurance policies by undercutting their offerings with subsidized federal health insurance, the government could then further undercut private insurance by denying the insurers tax deductibility unless they complied with federal health service regulations. As only the wealthiest could afford to buy private health insurance if the cost was not deductible, private health insurance companies would be compelled to follow federal benefits and cost regulations.

At that point, almost all Americans would get their health care pursuant to federally regulated systems. Then the president would be able to begin to deliver on his twin pledges to reduce the cost of entitlements and make health care overall contribute to lower deficits.

The federal regulators could merely do what the British regulators do:

• Constantly reduce the compensation of doctors and all other skilled health care providers. (As domestically trained American doctors would become scarcer, more not-as-well-trained foreign doctors would be needed).

• Limit the availability of medical technology. (in Canada, patients have to wait months for MRIs, so those who can do so come to America for immediate diagnostic services.)

• Ration available treatment to fit the federal budget requirements. The universal digitalized health data could be used to justify non-treatment on a cost-benefit basis. For example, hip replacement for older people could be denied because they would be unlikely to live long enough to justify the expense.

At that point, Americans will, too late, more fully understand what happens when health care is a “right” rather than a service purchased by a sturdy, free people in an unfettered free market.

Tony Blankley is the author of “American Grit: What It Will Take to Survive and Win in the 21st Century” and vice president of the Edelman public-relations firm in Washington.