Another hope for change

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guest commentary by Dr. Todd Stewart, an independent Fort Smith physician, and author of "The Dilemma."

Obama’s press conference last week was a telling tale of his stance politically and his poor understanding of the true nature of the healthcare problem. To quote Obama, “Health care reform is both urgent and undeniable.”

I doubt anyone would disagree that we have serious problems with our healthcare system. But, HR 3200, the Health Care Reform Bill in the U.S. House of Representatives, represents a marked departure from most Americans’ opinions about how healthcare should be structured.

Our disagreement with Obama lies in how we approach solutions. Do we as Americans fundamentally believe that government, particularly the federal government, is best-suited to root out inefficiencies and waste in this sector of the economy. Has the government effectively managed the healthcare for which it’s already responsible? With Medicare $45 trillion underwater, the answer is clearly, “No.”

Is it true that we have significant inefficiencies and waste in our current system? Yes. Is it true that we have seemingly few options to patchwork insurance coverage that can leave an insured person bankrupt after major illness? Yes. Is it true that the total costs are spiraling out of control? Yes.

Some people believe that the free market in healthcare has failed, but in truth the free market has not been allowed to work. Excessive regulation and government-protected monopolies have led to shortages in the supply of doctors and hospitals. Also, consumers have been disconnected from prices when they make basic consumer decisions, which is the most basic feature of an effective market.

If health reform doesn’t include restoring free market forces, then we are doomed to the failure that awaits all socialist programs — financial collapse or severe rationing. It’s always true that there is no such thing as an infinite supply of any good or service. It’s also always true that when consumers are disconnected from paying for what they consume, then demand will be massively increased. Such a disconnect is what always dooms socialism to financial collapse.

HR 3200 will mandate a shared payment between employers and government. Whether employers are forced to fund healthcare or the government funds it, consumer demand is left unchecked which inevitably drives up total demand, and in turn, total system costs. HR 3200 will solidify the disconnect between consumers of healthcare and the prices of the goods and services that they consume with the power of federal law. It’s easy to predict what will happen to total system costs in such an arrangement. They will skyrocket, just like Medicare costs have done.

For the government to control the unending spiral of total system costs, only one option will exist — arbitrary rationing by committee. Such decisions will be made without regard to individual preference, but instead will be made relative to the ideal of what is good for the whole group. Or worse, these decisions will be made subject to personal bias or corruption. That is socialism.

The free market should be what we seek, not socialist answers or Soviet-style central planning. Socialism will end in decisions that rob the individual of their power of preference and individual liberty.

Reform should involve freeing up competition, not just in insurance, but in doctors, hospitals, drugs and suppliers of medical equipment. These suppliers have built limitations to their own supply to protect themselves. Doctors limit competition by restricting licensing at the state government level and at the national level by limiting new medical schools from opening. Hospitals likewise limit new hospitals from opening through state and federal licensing. Pharmaceutical companies have insulated themselves through 20-year patents.

Only by getting rid of arbitrary government regulation and restrictions to new market suppliers will we see an expansion of supply in such a way that competition will be restored. Such competition will increase service quality, service availability, and lower price.

Without lower prices that remain in line with costs of production, then total system costs cannot be sustainably lowered without arbitrary rationing by insurance executives and government bureaucrats.