Dan

Calabrese

Read Dan's bio and previous columns here

March 30, 2009

Obama’s Health Care Spending: Anything But Cost Control

There is such a thing as investing money to ultimately save more money. But just because you throw money at something doesn’t mean it will have that effect, and the first round of President Obama’s 10-year, $634 billion health care agenda is an excellent example.

Health care was the president’s leading justification, during his prime-time press conference last week, for a spending explosion that will catapult the federal deficit to previously unexplored new altitudes. Without getting the cost of health care under control, Obama said, we can’t get federal spending under control.

The problem is that Obama’s health care spending agenda only perpetuates the system that has seen health costs explode so dramatically.

Obama’s first-year health care budget focuses primarily on two things – providing coverage for more people ($32 billion) and speeding the move to computerized health records ($19 billion). The latter is unnecessary and the former is more of how we got here in the first place.

Digitizing health records is well and good – and inevitable. As the technology becomes more plentiful, easier to use and cheaper to access, the few remaining holdouts who haven’t figured out how to make this transition soon will. And it’s not as if most health care providers are still relying primarily on paper charts. Digitized health records have advanced so far that it has created a privacy backlash, with federal laws being passed to govern who can access your digitized health records and what can be done with them.

Indeed, in typical government fashion, the digitization of health records has spawned new federal rules and procedures – replacing the inefficiency of paper pushing with the inanity of bureaucratic oversight.

If we never spend a penny of that $19 billion, the few people whose records are still not computerized would surely get there within a few short years regardless, and then everyone could turn their focus to freaking out about their privacy.

But it’s the $32 billion Obama says he will spend on expanding coverage for the children of low-income workers that really perpetuates the problem. Like most of the political establishment, almost all of the media and much of the public, Obama defines the health care ideal by the number of people who have most everything covered by health insurance.

Not only does Obama want to spend federal money to cover more people, he wants to force insurers to cover pre-existing conditions they do not cover now. He also wants to force more employers to pay for employee health premiums, although he has suggested the federal government will take over paying for catastrophic needs in exchange for employers lowering employee premiums on the rest.

Forcing insurers to cover more needs is popular with the public, which long ago bought into the idea that the only way to get health care is to have it covered by insurance. But private health insurance bureaucracy complicates health care finance and administration, as well as taking the spending decisions out of the hands of consumers. The health care you think is free comes out of your paycheck and goes to a massive bureaucracy that decides who you can see, what will be covered and when.

If that money went straight to you – and you did earn it, after all – you would have the resources necessary to pay directly for your health care, cutting out the middleman, making you more price-conscious and forcing providers to be responsive to your needs. Nothing would inspire efficiencies and waste-reduction more than that.

Health insurance makes sense for catastrophic needs that cost people many thousands of dollars. Health insurance should not cover doctors’ office visits and other small-ticket items consumers could afford themselves if their health insurance premiums were returned to them.

But Obama is moving in the opposite direction – perpetuating the insurance boondoggle. The current debate in Congress is over the creation of a government-run alternative to private insurance. Such an entity, if created, would soon come to dominate the market and ensure ever-higher costs by inspiring unlimited demand combined with increasingly scarce supply.

Obama is not planning to spend $634 billion on health care because it will get costs under control. This – one of his leading justifications for exploding the federal deficit – is preposterous. He is spending this money because he wants to even further remove consumers from the financing of their own health care – ensuring federal control, even higher costs and the certainty of yet another future crisis, which we will be told can only be solved by the nationalization of the whole thing.

Of all Obama’s economic proposals, this is the worst.

© 2009 North Star Writers Group. May not be republished without permission.

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