Health Care Reform and Status Quo

Several weeks back, CNBC aired, “The Meeting of the Minds: The Future of Health Care.” As advertised, this seven member panel contained “leaders, thinkers, and visionaries.”

In a short and scripted film clip, our President Obama addressed the panel, as well his fellow Americans, with a clarion call, “When we talk about the future of health care, we are talking about the future of America.”

The president continued, “There are those who argue that we cannot afford to confront the challenges of health insurance reform. But the bottom line is this: deferring the reform is nothing more than defending the status quo and the status quo is unsustainable.”

Two distinguishing remarks deserve mentioning.

Firstly, deferring one is not equivalent to defending the other;--if one so weighs the proffered reform the lesser against the current set of circumstances and affairs, no defense exists for the so-called “status quo,” only simple rationality.

For example, why would one individual acting rationally purchase a new calling plan for her cell phone wherein she will be paying substantially more for a coverage area that appears unchanged, however, now she will experience a guaranteed rise in dropped calls and additionally have more of her incoming calls sent directly to voicemail?

She simply would not, as a rational consumer. The current calling plan, no matter its shortcomings, persists as the better buy.

The task is gravely more subtle and difficult: to provide her with greater coverage with fewer dropped calls for lower the cost.

Yet, the health care reform pushed by Progressives and modern Liberals does not meet this task. These advocates forget economic data.

For example, health economist Linda Gorman notes, since “health coverage stabilized in the 1980’s,” only thirteen to sixteen percent of people have at any given time been not covered, “despite numerous expansions of government coverage programs and a massive increase in illegal immigration.”

Moreover, the only increase with government’s expansion into the health care sector has been costs. There surfaces an inverse relationship between the number of those covered and the cost of said coverage, as predicted by elementary economic theory.

Secondly, if the status quo is unsustainable, then even a “cost neutral” plan is unsustainable;--that is, if costs and the rise therewithal remain the same, then per capita costs and GDP percentage remains the same.

As Washington Post columnist, and once medical physician, Charles Krauthammer points out, “[T]he president argues that health care is killing the economy--that the costs are--and he is right in that, absolutely right.”

Krauthammer though adds, “If health care today is destroying our economy because of its costs, revenue neutrality leaves us on the same net trajectory to insolvency and ruin [the president] himself has said is going on right now.”

Only two major schemes prove to reduce costs: free markets and government rationing. The former, unlike the latter, also supports and delivers technological and procedural innovations, in so doing drives costs even further downwards.

For example, health economist John Goodman identifies lasik eye surgery--a section of health care not covered by government or even private insurers--and its rapid innovation as examples of freer markets at work.

Yet, more importantly, he mentions, compared to health care funded by government programs or paid for by insurance, the “prices on average have gone down by 30 percent.”

In sum, when President Obama says he will “not accept the status quo,” or opponents only think it is “better politics to kill this plan than improve it,” he conveniently misses that his current plan with its dubious measures is equal to, if not worse than, the status quo.

And he, therefore, overlooks the “rational consumer” in each of his fellow Americans.


This is another installment into my series on health care reform. I find the topic interesting and I hope all reading this piece does. Also, this mounts a hopeful return to writing columns for the Parthenon this term, but as a regulator, more as a fill-in on days that a weekly columnist cannot fulfill his or her deadline.