In the president’s SOTU last night, he said regarding health care:

But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.

Here is a simple approach that will work:


Part A. will:

  • because all workers will be required to pay for 100% of their insurance out of their own pocket, they will have shop and negotiate for the lowest insurance rates.
  • remove the disparity between what the self employed pay for insurance and what regular, previously employer-subsidized workers pay.
  • Just as self-employed workers presently do, to keep their insurance premiums low, all workers will negotiate larger deductibles, giving them a strong incentive to question and negotiate the charges of their healthcare providers…driving down costs.

Part B. will:

  • remove in-state and regional  monoplies of insurance companies … increasing competition and driving down rates.

Part C. will:

  • drive down the cost of insurance since legal fees that need to be paid by that insurance will be less.

Part D. will:

This 4 point approach will accomplish the goals the president outlined, but it requires real change, the kind of change that Mr. Obama’s special interest backers (like unions and banksters) will not support.  McCain had a proposal in his campaign to tax the employer paid part of health insurance, but the special interests and Mr. Obama shouted it down.  McCain ran a poor campaign and deserved to lose, but this proposal was on the right track.  Too bad,  Obama’s offer for real change is a farce

Dan McLaughlin at CBS News has an excellent opinion/analysis of the current health care “debate”.  Here’s a few pastes, but read the whole thing:

Let’s review the options. The Democrats’ main argument is that restructuring the entire health care sector will reduce the nation’s total (public and private) outlay for health care. When you boil it down, though, there are only three variables you can cut: reduce the amount of medical care provided; reduce what providers of medical care earn for their products and services; and reduce intermediary costs. All are problematic.

I. Less Medical Care

One argument advanced by proponents of the various plans is that costs would be reduced by providing more care, because preventative care would prevent more expensive care from being needed… .Back on Earth, a rigorous study in the journal Circulation found that for cardiovascular diseases and diabetes, “if all the recommended prevention activities were applied with 100 percent success,” the prevention would cost almost 10 times as much as the savings, increasing the country’s total medical bill by 162 percent. That’s because prevention applied to large populations is very expensive, as shown by another report Elmendorf cites, a definitive review in the New England Journal of Medicine of hundreds of studies that found that more than 80 percent of preventive measures added to medical costs.

II. Medical Care For Less Cost

The issue of shortages brings us to the problem with the second option: rather than reducing the amount of care provided, reduce the amount paid to the people who provide it: doctors, nurses, and pharmaceutical and medical device companies. Certainly on the Left there is a fair amount of sentiment for making it less profitable to provide care. But there is really no getting around the basics of supply and demand: if we make it less profitable to become a doctor, we will end up with fewer doctors.

III. Cutting Out The Middleman

The elephant in the waiting room is the other big cost driver of intermediaries besides the scope of coverage and the cost of having shareholders and executives: lawsuits. Precise figures are again a subject of intense dispute, but a goodly chunk of what drives the amount of `unnecessary’ care provided, the cost of providing services and the cost of intermediaries is the need to protect against and pay for the cost of medical malpractice and denial of coverage litigation. None of the Democratic proposals, however, seek to make any practical inroads against this source of costs. Replacing a private system with a public one could arguably do so if the trial bar is effectively precluded from bringing against the government many of the kinds of lawsuits now used against private insurers – but aren’t liberals in favor of keeping those kinds of suits viable? And how likely is it that in the long run they won’t provide other mechanisms to keep one of their vital constituencies in business?

There will be no cost savings. There’s no sense in pretending otherwise.

The whole purpose of health care reform is to increase government control of the majority by an elite few.  This elite few’s power and income will be vastly enriched by this health care coup d’e'tat – if the elite can pull it off.  But make no mistake – that is, stop pretending otherwise – it has nothing to do with improving the lives of the American people.  We do need to gear up for a large increase in demand for health care in America, because of the aging of America.  If a higher percentage of the population is old we should expect that a higher percentage of GDP will be spent on health care.  To accommodate this, we need to augment the total supply of health care.  Price always rations whatever available supply there is.  We don’t need government elites to ration it based on their political whim rather than through price. If an increased supply is encouraged by reducing lawsuits and building more hospitals and medical schools, we can expect lower prices (than otherwise) with the increased supply of practitioners…it’s really that simple.

Obama reportedly told all “his people” to read this New Yorker article.  Swamp Report agrees that this article should be read by everyone.  The basic assertion of the article is that high health care costs in America are driven by doctors’ (and to a lessor extent insurance companies’) greed, not law suits.  While the Mayo Clinic’s approach (see page 6) appears to be effective in reducing costs if the approach is universally applied through government control, it is clearly socialism:

The core tenet of the Mayo Clinic is “The needs of the patient come first”—not the convenience of the doctors, not their revenues. The doctors and nurses, and even the janitors, sat in meetings almost weekly, working on ideas to make the service and the care better, not to get more money out of patients. I asked Cortese how the Mayo Clinic made this possible.

“It’s not easy,” he said. But decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focussed first on what was best for patients, and then on how to make this financially possible.

However, without taking sides with the doctors or other analysts, Swamp Report would like to add to the mix:  More competition is at least part of the answer.  And… we mean private -not government subsidized- competition.  Clearly, restricting the number of (supply of) doctors raises doctors’ incomes and even encourages them to expect more each year.  A comparison of 2008 matriculation data (18036 matriculants) to 2003 (16538 matriculants) and an examiniation of applications, shows the intentional restrictions.  What would a doubling of the Med school matriculation rate for the next ten years in the US do to the availability of cost efficient health care here? And please don’t tell us there aren’t enough qualified applicants…   Restricting the supply of workers in ANY field (the purpose of unions) raises wages to the lucky few who are admitted to the club.

More competition by private insurers will also go a long way to reducing costs. But creating a subsidized government run organization to “compete” with private companies will only reduce the number of competing private firms…and thus drive up costs.   We need more not less.

Of course adding to the supply without giving the patient an incentive to shop around would be a mistake.  We also need the patient to bear a larger percentage of the cost – so they have a vested interest in keeping costs down by comparing costs.

The President of the United States of Goldman Sachs gave an interview with the New York Times:

“It’s a scary picture the president paints. He stated that “the chronically ill and those toward the end of their lives are accounting for potentially 80 percent of the total health care bill out here.” For them, he said, “I think that there is going to have to be a conversation that is guided by doctors, scientists, ethicists. And then there is going to have to be a very difficult democratic conversation that takes place. It is very difficult to imagine the country making those decisions just through the normal political channels.

Not to worry, normal political channels are obsolete now, Mr. Obama will appoint someone to decide who lives and dies and euthanasia, as an emergency economic policy, is on its way.