Here's a different look at a Health Service. It's by someone who quotes libertarians so is probably a libertarian.
He doesn't mention the $400 million necessary to get a new drug approved by the FDA - something that stops small research firms from doing it themselves. They have to work trough one of the monsters.
Also, I'm sure he would support Patents and Copyrights - a major problem in the provision of cheap drugs. One notes that the Administration and the Congress (both parties) think in terms of paying the exorbitant drug prices by taxes to relieve patient costs. (That's guaranteed to raise prices.)
Incidentally, half of drug research is carried out by universities and small firms. This while the large drug companies spend more on their advertising than they do on research.
However, some interesting questions are raised by the article - including a criticism of Canadian services. Is it true? (No nationalism please!)
Harry
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Solutions: There are free market answers to America's health care crisis
by Jonathan Trager
America has a health care problem that has developed into a full-fledged epidemic.
Over 40 million Americans currently lack health insurance. Skyrocketing health care costs eat up about 15% of the nation's total productivity. Thousands of businesses have dropped their employee health care benefits.
How did the American health care system become so diseased?
Prior to the 1960s, America had a health care system that many considered the best in the world. Most Americans could afford to pay for health insurance; hospital procedures didn't cost a week's pay; charity hospitals were available for the poor and indigent; and doctors even made house calls.
Then the federal government stepped in with programs and regulations that would allegedly make health care more accessible. Since then, prices have gone up at a feverish pace, and increasing numbers of people are unable to afford coverage.
The ballooning cost of health care has been met by cries for even more government intervention. In the past year, politicians have proposed a Medicare prescription drug benefit, a "mental health parity" bill to force insurers to cover mental illnesses, and a "Patients' Bill of Rights" to give individuals more power to deal with health maintenance organizations (HMOs).
But further government intrusion into the health care market would be a cure worse than the disease. For a case in point, just look to America's northern neighbor.
Under Canada's "free" health care system, tax revenues fund all health care. There are no user fees. No insurance companies. No health care management organizations. At first blush, it sounds like the perfect patient paradise.
The reality is quite different. Canadian politicians may have been able to dispense with the for-profit system, but they have been unable to repeal the laws of supply and demand.
According to the Canadian Fraser Institute, hospital waiting times have increased a dramatic 51% since 1993, when the median wait for Canadian patients to receive treatment was already 9.3 weeks.
Why? Because with government paying health care bills, there is no reason for individuals to economize. As a result, every minor ache or pain is viewed as a legitimate reason for a medical visit. So Canadian physicians suffer from case overload, while Canadian patients wait. And wait. And wait.
As Guy King, former chief actuary for the Health Care Financing Administration, noted, "When people, either patients or doctors, are spending other people's money, they do not worry about the cost or number of services consumed."
That's the problem in a nutshell. Today, almost half of all American health care dollars are spent by governments -- not by private individuals or companies. In addition, reams of regulations further burden health care providers.
Rather than further enmeshing the government in medicine, we should dramatically reduce its role -- and, by doing so, make health care more affordable. To that end, politicians should:
* Replace the FDA. According to the Food and Drug Administration (FDA), getting a new drug approved costs a pharmaceutical company $300 million on average, and can take as long as 10 years.
This regulatory hoopla not only boosts the price of drugs, but it keeps potentially life-saving medicines off the market. As a result, patients suffer and die.
Take the case of Propanalol. In 1968, the FDA approved this drug, but, for almost a decade, refused to allow it to be used for angina or hypertension. A study by Arthur D. Little, Inc. estimated that roughly 10,000 Americans died for lack of the drug each year the FDA prevented doctors from prescribing it.
Not only does the FDA keep prices high and waiting periods long, but as Robert Goldberg of Brandeis University said, "The FDA has sat on or rejected drugs for depression, schizophrenia, kidney cancer, and epilepsy -- not because they were unsafe, but because in the final analysis the agency didn't think the drug was so important or effective."
If we disposed with the FDA, patients and their doctors would be able to decide whether a particular drug is "important or effective" -- not health care bureaucrats.
Moreover, private certification associations could fill that niche, similar to how Underwriters Laboratories (UL) currently certifies electrical appliances. UL is an independent, not-for-profit organization that develops standards and rates electrical products, giving them a non-governmental seal of approval if they are safe.
* End Medicare and Medicaid. Passed in 1965, Medicare is a compulsory medical welfare program for the elderly, while Medicaid is a medical welfare program for the poor.
According to former LP presidential candidate Harry Browne, the average senior citizen now pays more than twice as much from their own pocket for health care as they did before Medicare -- even after allowing for inflation. In addition, there are over 100,000 pages of Medicare regulations in the Federal Register.
Meanwhile, the payroll tax to fund the programs continues to rise. In 1965, the tax was just .9%, divided between employer and employee. Today the total tax is 2.9%, taking over $1,200 from the average worker's income.
According to Browne, "Because these programs impose so many requirements, the health-care system now has far more administrators per patient and far fewer doctors and nurses per patient. Those big medical bills aren't paying your doctor's country club dues -- they're financing a bigger and bigger health-care bureaucracy."
If the government ended these programs, the government-mandated administrative costs would disappear, and the price of care would drop dramatically.
* Institute a universal medical tax credit. About 90% of workers with health insurance are covered through their employers, who are permitted to write off health care coverage from their taxable business revenue. As a result of this tax code enticement, many American workers consider health insurance to be "free."
A medical tax credit would, by contrast, encourage consumers to pay closer attention to how their health care dollars are spent.
Under such a system, each taxpayer would personally pay for health insurance and medical costs -- and then deduct those payments, dollar for dollar, from his or her tax bill.
According to the actuarial firm Milliman USA and the Council for Affordable Health Insurance, an $800 per-person tax credit could cover 90% of a typical health insurance premium. As for the "universal" component, individual taxpayers could choose to write off an additional amount and donate it to hospitals or low-income individuals.
Merill E. Mathews, Jr., director of the Council of Affordable Health Insurance, said, "A tax credit would be the most efficient way to assist uninsured Americans who do not get health insurance through an employer."
* Deregulate insurance companies. Currently, the government forces insurance companies and HMOs to cover certain maladies and services -- regardless of whether you need them or not. One example is gynecological services, which must be offered even in a plan bought by a man.
Politicians also force insurance companies to cover pre-existing medical conditions -- such as glaucoma or cancer -- under their policies. A study by the American Society of Actuaries found that claim costs rise by an average of 38% wherever a guaranteed-issue rule is imposed.
Instead of further driving up costs, Congress should focus on deregulating the health care companies, and allow consumers to choose a less inclusive plan tailored to their individual needs.
Considering the current trend toward a nationalized health care program, the prognosis for the ailing American system looks bleak. However, the situation is still curable if we enact a healthy dose of free-market initiatives -- not additional centralized controls.
As the debate rages over how to fix America's health care system, many falsely claim the debate is about who should get more power: The government, or big health care companies.
But Michael Tanner of the Cato Institute said there's another way.
"It doesn't have to be more power to the government or more power to the HMOs," he said. "It could be power to the people."
He's right. Only by expanding consumer choice, freeing people to spend their own money, and unshackling the free market can America save its ailing health care system
**************************************************** Harry Pollard Henry George School of Social Science of Los Angeles Box 655 Tujunga CA 91042 Tel: (818) 352-4141 -- Fax: (818) 353-2242 http://home.attbi.com/~haledward ****************************************************
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