Home > Liberal Friend-I am impressed that you are willing to carry on a rational debate about health care in America.

Liberal Friend

I am impressed that you are willing to carry on a rational debate about health care in America. I find it difficult to find people on the Left who will have a rational, fact-based discussion. More and more, liberal arguments seem to be based on tenets of liberal, neo-religious orthodoxy and less and less on economic, historic, or scientific facts. But, since you are not of this mold, please read some of my thoughts below.

I want you to think about health care costs for a moment. Countries with single payer national systems use one main technique for driving down costs and that is limiting usage and limiting access. This takes the form of limiting procedures, limiting the use of certain drugs and limiting or putting price controls on health care providers' compensation (including doctors, drug companies, hospitals, etc). These actions limit the supply of health care providers and forces long lines for care. The further a patient moves from primary care from a general practitioner, the scarcer the supply of health care providers, drugs and technology, and thus the longer the waits. You only have to look at Canada, the UK or numerous other countries to observe these phenomena. What underlie these nationalized or socialized (choose your word) approaches is the notion that individuals simply cannot look after themselves, pay for health care themselves or make their own choices. The basic approach is that health care is a public good that must be bought in bulk by the government and rationed out to the people. In Canada it is actually illegal to pay for health care yourself or for a healthcare provider to accept such private payment. This of course is a tremendous limitation on individual freedom and the reason why so many Canadians, including liberal government leaders who profess to support the Canadian health care system, travel south of the border to the United States whenever they become really sick. (What do you think keeps the economy of Buffalo, New York alive?)

Single payer government rationing / cost management / national leverage -- whatever you want to call it -- can work to limit the financial cost of health care, but at tremendous human cost to individual self determination and freedom. (Unless a nation with private health care and open borders is your immediate neighbor.)

The only other approach to limiting cost is time tested and it works. This approach is simply to permit individuals to have the freedom and responsibility to make their own choices regarding the care they need and how to pay for it. In other words -- to allow free markets for health care to function.

If people can choose their own insurance and their own levels of coverage based on their own needs in a truly competitive national insurance market, then competition drives innovation and lowers prices for health insurance. (Some Republicans, but many more Democrats have opposed this sort of truly competitive national insurance market.) If individuals have some level of responsibility to pay for their own health care (whether the money comes 100% from their own earnings, or their own paid health insurance or some level of government subsidy that they turn around and spend themselves), then they care about prices and again competition will drive down health care costs and the prices people pay. (Note: one key reform we need that cannot be found in over 2,000 pages of the Obamacare law is a requirement that health care providers publicly post prices for all procedures, levels of care, and care options.) Today, American health care consumers have no idea what their health care costs and most do not care because a third party (the U.S. government or a private insurer paid for by their employer) pays the bills. When people have to pay themselves or pay some portion themselves, then they ask very different questions and make cost sensitive decisions. They also shop for the best deal. This is how free markets work. (Note: Far lower than predicted private health care costs during the recent recession driven by increasing numbers of people in private plans with co-pays proves this point. Read any health insurance company's 2010 annual report and you will see this phenomenon in the numbers.)

Despite the strong evidence that free markets can work in health care, the key reason why the cost of health care is so out of control in the U.S. is that we have been moving in another direction for fifty years. The fact is that we have been moving steadily towards more and more third party payers without government imposed rationing. Another way to put it is that the U.S. government through both regulations and social programs has been steadily and increasingly disabling free market pricing mechanisms for American health care and health care insurance, while trying to preserve access to any and all care with no constraints. And doing all of this without admitting to anyone what it was actually doing. (Of course this is understandable given the nature of our political system. What group of politicians don't want to "have their cake and eat it too" whenever they can?) Over 50% of U.S. health care costs today are paid by Medicare and Medicaid, but there are few limitations on procedures, or care. The only real rationing in the law before Obamacare is limits on doctor and health care provider reimbursements from the government, but Congress blinks and votes for exceptions to these tough constraints every year. Barack Obama, Nancy Pelosi and Harry Reid's "out of Obamacare" "blink" on this issue cost taxpayers $500 billion. Had they included the fact that the Democrat controlled Congress was not about to severely reduce Medicare and Medicaid reimbursements to doctors, then the CBO's estimate of the cost of Obamacare would have been hundreds of billions higher and the bill never would have passed into law. The Obama, Pelosi, Reid "dream team" got Obamacare passed by many less than truthful "slights of hand" like this. Yes, we can continue to pretend, go down the path of Obamacare, and put government more in control. And eventually (actually very soon) the government will be economically forced into real rationing, OR we can move in a new and better direction -- a direction more in line with our American entrepreneurial culture.

There is a way to provide "the most vulnerable" Americans (really the least capable -- due to extreme youth, advanced age or lack of skills) with government support while also enhancing free health care markets (for insurance and all forms of care) for the 80% of Americans who are (as individuals or members of families) capable of making their own free decisions and looking after themselves. Here are some ideas: 1) Take away any individual mandate to buy government approved health care insurance or plans. Let people make their own choices like free Americans should. 2) Blow away a good deal of state level regulation and allow people to make their own decisions to buy insurance in a free national market (like auto, home or life insurance) and buy health care from the doctors and at the hospitals they desire. 3) Require health care providers to post all prices publicly -- don't you love the internet! 4) Allow health care markets to become much more consumer centric by taking away the advantage corporations have over individuals since corporations can currently buy health care coverage with pre-tax dollars while individual consumers cannot. In other words, allow individuals to buy insurance with pre-tax dollars, or alternatively, reduce individual and corporate tax rates and then make everyone pay with after tax dollars. 5) Give Medicare and Medicaid recipients the option to either stay on the government system with increasing top down cost controls, or simply accept a subsidy to buy their own private insurance and private care. 6) Provide government run Medicaid complete with the kind of government cost controls that are embedded within Obamacare to any American citizen or legal visitor who cannot otherwise obtain their own coverage.

This free market approach would yield much fairer, more rational, higher quality and cost effective health care while enhancing freedom. Making us all dependent on government and taking away all of our freedom to choose (as encoded in the Obamacare law) will yield less access, less competition, poorer quality, higher cost health care while causing mass national anger and frustration.

You see, it is very simple. We are not Europeans. We are Americans and we want our freedom. And freedom and free markets work, while government control does not. You think I am wrong? Just remember -- our government and this administration could not even manage something really simple like "shovel ready." You think they can manage something complex like health care for 300 million people? Give me a break.

Thanks for reading.

Respectfully,

Glen Meakem

To get more information or to listen to "Glen Meakem on the Weekend,"

go to www.glenmeakem.com.

Glen Meakem is a successful technology entrepreneur, venture capitalist, and conservative talk radio show host, who offers information and insights on how individuals and our nation can be more successful. Glen's unique perspective has been shaped by his experiences as founder, chairman and CEO of the B2B internet success Freemarkets Inc - which he founded in 1995, took public in 1999, and sold to Ariba in 2004. In 2005, Glen co-founded Meakem Becker Venture Capital, a firm that invests in early stage start up companies. Concerned about the liberal political agenda that has gripped the United States and his home state of Pennsylvania, Glen launched "Glen Meakem on the Weekend" in 2008. Glen served as an officer in the United States Army Reserve and is a veteran of the First Gulf War. He also earned his undergraduate degree from Harvard and his MBA from Harvard Business School. For more information about Glen and his radio program, or to read his blog, please visit http://glenmeakem.com.