THE TOP TEN MYTHS OF AMERICAN HEALTH CARE: A CITIZEN’S GUIDE
By Sally C. Pipes
Pacific Research Institute, $24.95
REVIEWED BY DOUG BANDOW
Health care “reform” is in the air, but to its leading advocates, that means a government takeover of the medical system.
American health care is an inefficient hybrid of public and private, costing more than it should for the care provided. The problem is too much, not too little, government intervention.
The political bias toward socialized medicine reflects a mixture of ideology and misinformation. Sally Pipes, head of the Pacific Research Institute and a Canadian immigrant to the United States, ably dissects the case for increased public control in “The Top Ten Myths of American Health Care.”
For instance, government health care programs are supposed to be more efficient than private medicine. Yet, Ms. Pipes notes, “tens of thousands of foreigners come to the United States every year for medical treatment. They’re usually seeking advanced and sophisticated procedures that are simply unavailable — or rationed — in their home countries.”
It is still widely argued that government administration is more efficient than private insurance, yet Ms. Pipes details how “government itself is the middleman,” with extensive state and federal regulation and expensive cost-shifting by Medicare and Medicaid. She observes: “Studies show that Medicare officials waste as much as $1 out of every $3 the program spends. That’s hardly a system worth expanding.”
The second myth is that Americans spend too much on health care. There is no intrinsic reason why it would be better to spend an additional dollar on beer than on medicine. As Ms. Pipes points out, it makes no sense to mention costs without considering benefits. She writes: “When we talk about re-tooling our health care, we should be careful to also recognize what is good about the current system. Most everyone has a friend or relative who is alive today because of an advance — probably a very expensive advance — in medical technology or drugs.”
Thankfully, we are wealthy enough to afford such advances.
Ms. Pipes next rebuts the claim that 46 million people lack health care. She ably deconstructs this oft-cited number: Lack of health insurance does not mean lack of health care, and the vast majority of the uninsured are either middle- to high-income people who choose not to buy insurance, noncitizens or people eligible for other government medical programs. This does not mean there are no hardship cases, as Ms. Pipes acknowledges, but the number of chronically uninsured who most need assistance is about 8 million, a much more manageable number.
Myth four is that high drug prices push up health care expenditures. In fact, the increase in pharmaceutical expenses lags behind that for medical treatment generally. Moreover, medicines often substitute for more costly alternative treatments such as hospitalization and surgery. “In reality, prescription drugs reduce medical spending.”
Related is myth five, that importing drugs would reduce medical costs. Importing pharmaceuticals from government-run systems really is importing drug price controls rather than drugs. Anyway, Ms. Pipes notes, when people claim medicines are cheaper overseas, “they’re referring to a very narrow category — brand-name drugs that have been approved and price-controlled by foreign governments.” Even in the best case, the practice isn’t going to save much money.
Myth six is that forcing people to purchase insurance is the answer. Ms. Pipes reviews the dismal experience of states that have proceeded down this road, urging advocates at least to “be honest about the sacrifices required: Higher taxes, forced premium payments, one-size-fits-all policies, long waiting lists, rationed care, and limited access to cutting-edge medicine.” This is no health care answer for America.
Ms. Pipes punctures another common fallacy, that prevention programs save money. Yet government increasingly seeks to regulate personal behavior in the name of reducing medical expenses. She warns: “Today’s soft-serve despots are yesterday’s prohibitionists.”
Yet another myth is that new government initiatives are necessary to cover the poor. In fact, genuinely poor Americans are covered by existing programs, though design flaws — such as low reimbursement rates — discourage doctors from accepting Medicaid patients. Given the outcome of poorer care mixed with excessive costs, Ms. Pipes notes acerbically: “The last thing these people need is more and larger government health care programs — which after four decades of trying, have proven to be incapable of providing a level of care that’s comparable to what’s available through the private sector.”
That information technology can dramatically reduce health care expenses is myth nine. Writes Ms. Pipes: “There are currently at least 12 different federal agencies with overlapping oversight when it comes to health care technology. This dirty dozen already produces mountains of red tape and conflicting rules.”
Last but not least is myth 10, that foreign government-run systems are better than America’s system. Her short critique is devastating: Nationalized systems deliver waiting lists rather than treatments; outcomes are not better overseas; care is rationed; and access to advanced procedures and pharmaceuticals is limited; people suffer and die from bureaucratic and budgetary imperatives.
While rebutting the case for politicized care, Ms. Pipes does not gloss over the problems of the existing system or the need for reform. However, she advocates the right kind of reform, starting with changing the tax code to eliminate the incentive for employer-provided health insurance, which has encouraged cost-plus medicine, limited individual choice and tied health insurance to employment. True reform, she concludes, “requires less government interference — not more. Only with a freer market can we lower costs and achieve quality universal health care.”
That, of course, is what we should all desire. Americans can only hope that in a bipartisan moment, President Obama picks up a copy of this excellent work.
• Doug Bandow is a senior fellow at the Cato Institute. A former special assistant to President Reagan, he is the author of “Leviathan Unchained: Washington’s Bipartisan Big Government Consensus” (forthcoming, Xulon Press).