MINOT, NORTH DAKOTA — It is an amazing mindset that Americans
have adopted. Some argue that it comes from an enlightened outlook
on the world. Others, less blind, argue that the American mind is not
equipped to think logically and rationally — that it is capable only
of spouting clichés and regurgitating rhetoric gleaned from sitcoms
and talking heads.
A recent discussion I had illustrates this point. The well-educated individual
with whom I spoke insisted that to keep insurance premiums down, everyone must
be required to buy a medical policy. This is exactly what Congress and the Supreme
Court have imposed on every American through the Affordable Care Act (Obamacare).
Proponents assure us that this imposition is for our benefit and ensures that
everyone has insurance and will pay his or her fair share.
The obvious flaws in the health care debate are the assumptions that medical
costs need to be covered through insurance and that employers are in some manner
obligated to fund health care insurance. The Affordable Care Act assumes all
medical costs will be paid through insurance, with certain deductibles and/or
co-pays. No other insurance works this way. Auto insurance does not pay for gas,
oil, and tune-ups; it covers liability exposure and property damage. Home insurance
does not pay the costs of replacing appliances, re-painting, re-carpeting, or
maintaining lawns; nor does it cover utility costs.
||"Prior to the federal
government’s entrance into the medical insurance business with
Medicare in the early 1960s, there was no health care funding
Let’s take a step back and look at the broader picture. Prior
to the federal government’s entrance into the medical insurance
business with Medicare in the early 1960s, there was no health
care funding crisis. Medicare is the natural outgrowth of the
well-intended but ill-conceived Social Security program instituted
under FDR. That program eventually led people to believe that
Social Security would provide a living income when workers entered
retirement. Of course, it does not.
Lyndon Johnson’s Great Society realized that Social Security would not fund retirement
costs. This realization was exacerbated by Congress’s borrowing from the Social
Security trust fund. As more people retired, they realized that Social Security
did not provide sufficient income to pay for living costs and medical costs.
The result was Medicare. Again, while possibly well-intended, the program was
ill-conceived and poorly implemented.
Now we have two federally mandated programs that forcibly require every working
American to participate. These programs are managed by an unaccountable bureaucracy
and overseen by an even more unaccountable Congress. Both programs are failing,
and Congress has chosen to do nothing to fix either.
|Rather than looking to see why
medical costs are rising so rapidly, Congress has instituted a
third ill-conceived plan — the Affordable Care Act. It ignores
all fundamentals necessary to help any business to succeed. It
is a classic government mandate based on ignorance; arrogance;
and the refusal to recognize the basic laws of nature, human nature,
and finance. Like Social Security and Medicare, it will fail. Unfortunately,
since this program is designed to control 100 percent of medical
services, its failure will fall heavily on all Americans — except
those politicians who have exempted themselves.
"The Affordable Care Act
... ignores all fundamentals necessary to help any business to
succeed. It is a classic government mandate based on ignorance;
arrogance; and the refusal to recognize the basic laws of nature,
human nature, and finance."
Serious efforts to address the explosion in the cost of medical services must
focus on the real causes. The Affordable Care Act ignores possible solutions
and, in fact, focuses on reducing access to services and the quality of said
Prior to the Affordable Care Act, the federal government directly or indirectly
controlled approximately 60 percent of health care payments. Fewer than 10 percent
of all medical bills are reviewed and approved by the individuals receiving the
service. Third-party payers, who have no knowledge of what services were actually
requested or provided, pay more than 90 percent of all bills. Thus, there is
no effective control or oversight of medical services. The otherwise well-educated
person mentioned above defended the third-party payer system. Her reasoning:
“These billings are so complex, if I had to review them I wouldn’t have time
to work at a job.”
Medicare studies consistently show that up to 30 percent of all Medicare payments
are for services that either were not provided or that were unnecessary. Third-party
payers are simply unable to review medical service billings and thus send them
through the system to be paid. The consequence is inflated medical costs and
resulting premium increases. The Affordable Care Act fails to address this fundamental
Further, the Affordable Care Act ignores tort liability issues. Litigation
expenses and damage awards add 30 percent or more to the cost of medical
services — even more to the cost of pharmaceuticals.
The American Medical Association (AMA) has controlled entry into the medical
profession for more than 100 years. Like all unions, it has restricted entry
in an effort to raise the income of those entering the profession.
Until the American public demands that government and the AMA get out of the
way of health care reform, we had better prepare ourselves for some very bitter
A Voice from Fly-Over
A Voice from Fly-Over Country is copyright © 2011
by Robert L. Hale and the Fitzgerald
All rights reserved.
Robert L. Hale received his J.D. in law from Gonzaga University Law
School in Spokane, Washington. He is founder and director of a non-profit
public interest law firm. For more than three decades he has been involved
in drafting proposed laws and counseling elected officials in ways
to remove burdensome and unnecessary rules and regulations.
See a complete biographical sketch.
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