Tuesday, June 16, 2009

Boos and awkward silences marked President Obama’s speech at Monday’s American Medical Association meeting in Chicago, and for good reason.

Not only did he refuse to support caps for malpractice suits, but he said his administration would undercut how much doctors make. In Monday’s AMA address and another speech on Saturday, the president reiterated his promise to save “$313 billion in Medicare and Medicaid spending.” His line was greeted by stony silence from the AMA. Mr. Obama understood why and even admitted, “Today’s Medicare rates will be applied broadly in a way that means our cost savings are coming off your backs.”

The government is good at “saving” money by simply reimbursing Medicare and Medicaid providers for less than their cost. It is essentially a tax that the government imposes - a tax that doctors and hospitals pay for staying in business. But this tax raises doctors’ and hospitals’ costs, forcing them to charge private patients more to compensate for the lost Medicare and Medicaid revenue.

In the short run, these higher costs will force more people out of private insurance and into Mr. Obama’s proposed government-provided insurance. In the longer run, as fewer people carry private insurance, it disappears and there is no one to pay this tax. With the profit motive removed, there will be fewer hospitals and fewer doctors practicing medicine. That means less health care to go around.

The future of this type of cost cutting can be seen by checking out the United Kingdom. Being a doctor in Britain is not as prestigious as it once was because it’s not as lucrative. Many of Britain’s doctors are foreigners who emigrated to practice medicine. Or take Canada. When the Canadian government took over the health insurance program there, many of their best doctors left Canada and came to practice in America where there was still good money to be made in the profession. The result in both Britain and Canada is less care and delays in receiving care.

“If you like your health care, the only thing reform will mean is your health care will cost less,” Mr. Obama consistently promises. “If anyone says otherwise, they are either trying to mislead you or don’t have their facts straight.” It’s Mr. Obama who is being misleading.

Mr. Obama keeps claiming critics who say government will ration care are just being dishonest. No one has to take our word for it. Just look at Mr. Obama’s own proposals to “save” money from Medicare and Medicaid.

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