MEANS: The Obamacare omen

The fallacy of socialized medicine stands as a warning to posterity

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Presidents with no experience in the private sector, and virtually none in domestic or foreign policy, will always be trapped by the law of unintended consequences. They just don’t understand how things work, or don’t work. While ignorance might allow them to speak with astounding confidence, they are often shocked by the results of their policies. This particularly inexperienced president will go down, politely, as “historically surprised.”

The central point made by conservative Republicans, or Democrats who appreciate the free market, is that the private sector, properly directed, is the most effective way to create economic growth and solve complex problems such as heath care cost control, quality and availability. Republican leadership has been entirely inarticulate on this point, though, or has gotten lost in internecine weeds and warfare, and has not convinced the public of this fundamental difference between the Republican and Democratic approaches to governance.

Now President Obama has taken care of that with a gift that will reset the course for American political debate for decades. Obamacare, in particular, and the Obama administration in general, have provided the crystal-clear conclusion that government should not be put in charge of creating huge, new organizations for managing massive programs of economic change, because government is, fundamentally, not as good as the private sector at designing and managing these types of institutions.

In that context, if anyone ever needed a laboratory test or case study on why America should never entertain the concept of a “single-payer,” government-run health system, Obamacare has provided that. Even at this early stage, it is obvious to nearly everyone that costs are skyrocketing, that there is a sinister wealth transfer from the young to the old and illegal immigrants, that doctors and health insurers are fleeing, that availability and quality of care will decline, that the government is incompetent to run this complex program, and that lies and political deception have been used to cover all this up. It is unlikely that any sane politician would ever again entertain the concept of “single-payer” socialized medicine.

Now some will argue that Medicare and Medicaid have been successfully run by the government for years. Really? A careful look at the numbers confirms that the government has been a complete failure at controlling the costs of these programs, that they have driven up everyone else’s health care costs, that ham-fisted approaches to squeezing doctors have replaced competitive market mechanisms that might have reduced costs and improved quality, that benefits and access to care have been subtly reduced, that fraud may be as high as 30 percent of the program costs, and that Medicare is on the brink of bankruptcy. Private-sector businesses, bred in a tough, competitive market, could do a massively better job than that.

Of course, the real problem with this administration is far more fundamental than Obamacare. The president has never built or managed a business of any sort. He has never stayed awake at night worrying about meeting a payroll, getting a loan for his business, creating a budget, controlling his costs, holding employees accountable, paying his business taxes — ever. It is no wonder that he appears to have no idea how to launch a program to restructure nearly one-fifth of the U.S. economy. He and his senior team are, simply, incompetent (stating it in the most polite way possible). He doesn’t have any idea how to design a health care program, how to create management processes, how to run it, how to build information-technology systems, how to pick people who do, how to price it, or how to hold anyone accountable for anything. He really had virtually nothing to do with designing the Obamacare legislation, so he probably didn’t know that a government-run system like this wouldn’t work.

If he had ever participated in the real U.S. economy, even a little bit, he would have had a lot more respect for those who are competent to build and run successful economic enterprises. Companies that compete and succeed really are magical geese that lay golden eggs, and the United States, properly led by those who understand that, has been amazingly successful at breeding those magic geese, which feed us all.

If the president knew anything about the U.S. economy, he would have understood that you do not starve your geese with massive new taxes, you do not throw away all the golden eggs on worthless government programs, and you do not behave like a king when you are expected to be an accountable CEO.

The good news in this really sad situation is that the American people may be waking up to the credibility and competence issues of this administration.

Obamacare will fail. Medicare will go bankrupt.

At the same time, however, arguments and plans for a truly competitive, market-based, solution to health care will finally be heard. With that, the quality and availability of health care can increase. Those without proper access to health care can get it. If the political process properly frames the issue and allows the market to work, it will happen. That is what America does. The president should learn it, appreciate it, support it and not get in the way. He should lead from behind and salvage the rest of this administration.

Grady Means served as assistant to Vice President Nelson Rockefeller in the White House and oversaw the Rand Corp.’s National Health Insurance Experiment, which tested the concept of single-payer health care for America in the 1970s.

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