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16 June 2009



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Obama Offers AMA His Healthcare Reform Ideas

President Obama spoke to the American Medical Association yesterday to outline his healthcare reform ideas. He managed to annoy the free-marketeers whose ideology costs Americans dollars and lives, bothered the hard left that wants a government payer system, and unsettled doctors who believe that the Hypocratic Oath entitles them to four-car garages. In fact, he has a pragmatic approach that might just work, but it makes just about everyone unhappy.

Here's the ugly truth. The average American (and does anyone confess to being such?) has a shorter life expectancy (77 years versus 79) than a Costa Rican, a fine and noble people who had the wisdom to abolish their military some 60 years ago. The Costa Ricans spend less than one tenth per capita what the Americans pay in healthcare per year. Clearly, the citizens and residents of the United States aren't getting value for money. And that's the problem.

Ideally, the US would adopt a single-payer system like the UK has. One can hear the screams already from those who pretend to be familiar with the National Health Service. Rationing, long-lines, losing the family doctor and so on go the complaints. The fact is that the NHS is under-funded thanks to the Thatcher-Blair bean-counting approach to misruling Britain. A single-payer system works to the extend that it is funded. When it isn't, it falls apart. Moreover, the UK still has a private system that allows the wealthy, or those prepared to spend on health rather than cars or clothes, to skip lines, see doctor of their choice and otherwise ignore the NHS. Those interested should look up BUPA, a private insurer that has flourished despite the existence of the NHS.

What President Obama has offered looks more like the Dutch system. The Dutch require everyone to purchase health insurance from one of 14 or so companies. Failure to do so results in a fine equal to about 130% of the premium, and the premium for the average Dutchman is around 1,100 euro a year (US$1,500-ish). In the US, it is $3,400 plus employer contributions to total $12,680. Dutch insurers must accept any applicant regardless of pre-existing conditions, and the government makes sure that no one insurer winds up with too many hard cases. There is a subsidy from the state if that happens.

And here's another ugly truth about healthcare. It is a public good, not a private one. One can have a platinum policy that covers everything, but when one gets coughed on by a TB sufferer at an airport, stadium or cinema, illness will result. Everyone has an interest in everyone else being healthy. And therefore, it has to be funded.

The GOP and a few Democrats who know the cost of everything but the value of nothing complain that this will add $1 trillion to the national debt over the next decade. The economic ignorance of this attitude is boundless. Most people will go for the public option, a bare-bones policy that covers basic preventative medicine and catastrophic conditions. Employers will get off the hook for employees' benefits, and that will boost the economy, which improves government revenues without increasing tax rates.

Above all, though, is Mr. Obama's pragmatism. Yes, a single-payer system like they have in the UK,. Canada, Norway, France (rated the best in the world by the WHO) and elsewhere is ideal, too many political interests in the US prevent it. What the Americans are going to get is a reformation and not a revolution. Still, it beats being sick.

© Copyright 2009 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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