Annapolis Institute Overview


Bigger doesn’t mean better for health plan

by Phil Burgess, Unabridged from the Rocky Mountain News, September 28, 1993

Last week’s news had a familiar ring. On Wednesday, President Clinton outlined his health-reform plan. The plan, straight from the playbook of Franklin D. Roosevelt, is Old Democrat to the core: more taxes, more spending, a new entitlement, a new bureaucracy to run “the system,” and new powers to the federal government to run our lives.

Clinton’s health-security plan, as proposed to Congress, is a government take-over of one of America’s largest industries — the $900 billion health-care industry, representing nearly 14% of the nation’s economy. “Virtual” take-over may be a better description — since a lot of new technology (e.g., “smart cards”) and new organizations (e.g., health “alliances”) give the appearance of something new and different.

But we should not kid ourselves. The proposed new taxes, regulations and price controls represent the largest government take-over of an industry in the history of the U.S. It has been a long time in coming — since the end of WW II–and has followed a familiar pattern.

The government stepped in after the war to “rationalize” the health-care industry — with lots of laws that regulated building hospitals and buying equipment. Result: America has too many hospital beds in the wrong places and much more high-tech equipment than the health-care market can support..

Then the government started providing health care for the poor and aged. Result: Spending for Medicaid and Medicare is racing out of control. So what’s the answer last week? More government for a system already fouled up by government. Does this sound familiar — maybe like the S&L bailout?

Polls show that people feel warm fuzzies about the proposed Health Security Card. I do too.

But there are also some cold pricklies. One is lost jobs. Another is the proposed National Health Board, a giant new bureaucracy with extraordinary regulatory authority.

The power of this new health politburo is awesome: It would establish health standards affecting every person, police compliance and control prices charged by health alliances, through which consumers will be forced to buy their health care coverage.

As a former Medicare administrator said last week, the National Health Board can turn the regional health alliances into “big government on a local scale.” The only thing missing is a motto for the proposed National Health Board. I have one: “Think globally. Control locally.”

The National Health Board is accountable only to the President. If you like Amtrak, the Post Office or the Resolution Trust Corporation (which is now the nation’s largest owner and manager of real estate), you will love the Clinton health-security program. While Americans lust to get their hands around the Health Security Card, they should consider what will happen when the government gets its hands around their necks through the National Health Board.

Health security is important. But so is having a government that we control, not the other way around. Here is the latest example of the breakneck expansion of government in the U.S. when the entire world, inspired by our example, is moving in the opposite direction.

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