Saturday, December 23, 2006

America has the greatest health care in the history of the universe, but the system is fraught with problems that are worsening every day. It has become so complex that prospects for significant reform seem bleak. But putting aside political considerations, the solutions might be simpler than we assume.

The main problem is that we have crowded out market forces and reduced consumer choice. What the system needs is a robust dose of capitalism.

No one has done a better job of making that case than Dr. David Gratzer in his book, “The Cure: How Capitalism Can Save American Health Care.” The late Milton Friedman endorsed Dr. Gratzer’s recommendations in his foreword to the book.

Friedman explained that before World War II, medical care, like other consumer goods and services, was dispensed through a mostly free market. Patients could choose their own doctors and were responsible for paying the fees. Health-care insurance generally didn’t cover routine treatment, only catastrophic events.

But when wartime wage and price controls led to a shortage of workers, employers offered benefits, including health care, to make jobs more enticing. Eventually, the government reinforced the practice by exempting this benefit from taxation. In time, our market-driven system became a “top-down” bureaucracy, with “exploding costs” and “widespread dissatisfaction” of patients and providers.

Dr. Gratzer recommends a three-pronged solution centered on market forces. He would make health insurance portable, primarily by eliminating the employer-paid health insurance deduction. He would shore up Medicare, partly by setting aside some of the payroll tax into registered health accounts, to be invested in the market. Finally, he would attempt to “create a market that will catalyze innovation in drugs and medical services.”

Dr. Gratzer says that by reintroducing market forces, “American health care will become cheaper, better, and more accessible for everyone. Capitalism is not the cause of America’s health-care problem. It is the cure.”

How true. But sadly, the market approach is precisely the opposite of what Democrats — and some Republicans — favor. Liberals have this regrettable habit of increasing government control over institutions and sectors of the economy, then denying responsibility when their supposedly good intentions only make the problems worse.

We’ve seen this from the war on poverty and welfare to education. But with blind faith in their failed prescriptions, they always demand heavier doses of the same poisons: government money and control.

One would hope there would be such an adverse reaction to full-blown socialistic policies that supporting them would be political suicide. Indeed, many conservatives believe universal health care is still so unpopular that Hillary Clinton’s sponsorship of it in the 1990s could sabotage her presidential ambitions today.

But I fear Americans’ concern over health care has grown enormously since HillaryCare imploded. There is so much anxiety about rising costs that it is conceivable — perish the thought — a politician’s endorsement of socialized medicine could benefit him politically.

In fact, just last week, a news story reported, “As Democrats prepare to take control of the 110th Congress a new approach to health-care reform is expected — universal coverage.”

Imagine that. The electorate sent Republicans packing in November, due, in part, to their unbridled spending proclivities, and now Democrats believe they have a mandate to spend recklessly greater amounts. (We tried to warn you about the dangers in “throwing the bums out” just to replace them with bigger bums.)

But there is a method to the Democrats’ madness. The same news story reveals — disturbingly — that “a majority of Americans would favor government intervention.” The good news is that the majority is not yet behind wholesale “government-run health care.”

Then again, Democrats have not yet revved up their propaganda engines. If you think they shamelessly demagogued President Bush’s noble efforts to reform Social Security, just wait until they get the chance to demonize anyone courageous enough to propose reasonable, market reforms to health care.

John Edwards will probably resurrect his “two Americas” stump speech. John Kerry will tell us if it hadn’t been for Mr. Bush’s war for oil everyone would be covered. Al Gore will say Mr. Bush’s refusal to surrender America’s car keys to Kyoto has intensified global warming, which has made us all sick and caused health-care costs to skyrocket.

Bill Clinton will say, “I did not have sex with that woman, Miss Lewinsky.” Hillary will say, “Yes, you did. But if instead you had put more energy into my health-care reform plan, I could have run [and won] in 2000 instead of that idiot Al Gore.”

Let’s not underestimate the gravity of the problems with our health-care system, nor the stakes involved in choosing the right cure.

David Limbaugh is a nationally syndicated columnist.

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