Tag: health care reform

Why Wal-Mart Supports an Employer Mandate

wal-mart-logoA couple of years ago, I shared a cab to the airport with a Wal-Mart lobbyist, who told me that Wal-Mart supports an “employer mandate.”  An employer mandate is a legal requirement that employers provide a government-defined package of health benefits to their workers.  Only Hawaii and Massachusetts have enacted such a law.

I couldn’t believe what I was hearing.  Wal-Mart is a capitalist success story.  At the time of our conversation, this lobbyist was helping Wal-Mart fight off employer-mandate legislation in dozens of states.  Those measures were specifically designed to hurt Wal-Mart, and were underwritten by the unions and union shops that were losing jobs and business to Wal-Mart.

But it all became clear when the lobbyist explained the reason for Wal-Mart’s position: “Target’s health-benefits costs are lower.”

I have no idea what Target’s or Wal-Mart’s health-benefits costs are.  Let’s say that Target spends $5,000 per worker on health benefits and Wal-Mart spends $10,000.  An employer mandate that requires both retail giants to spend $9,000 per worker would have no effect on Wal-Mart.  But it would cripple one of Wal-Mart’s chief competitors.

So yesterday’s news that Wal-Mart is publicly endorsing a “sensible and equitable” employer mandate – i.e., a mandate that hurts Target but not Wal-Mart – didn’t come as a surprise to me.  It merely confirmed what I learned in a cab on the way to the airport: Wal-Mart has gone native.  That great symbol of the benefits of free-market competition now joins its erstwhile enemies among the legions of rent-seeking weasels who would rather run to government for protection than earn their keep by making people’s lives better.

In 2007, Wal-Mart officially joined the Church of Universal Coverage when it entered one of those countless strange-bedfellows coalitions with the Service Employees International Union.  At the time, I criticized Wal-Mart for “self-congratulatory puffery” and “jump[ing] on the big-government bandwagon.”  I also criticized then-CEO Lee Scott for spouting economic nonsense.  (I later learned that Scott was not amused.)

This is so much worse than that.

The Ultimate Question: Freedom or Power?

Here I was, sick with worry that the questions I hoped to pose to President Obama about his health reform plan would never be answered.  Thank God, Matthew Holt stepped up to the plate.  Or the wicket.  Whatever.

What follows are some of my questions (addressed to the president) and Holt’s responses (in italics).

Mr. President, in your inaugural address and elsewhere, you said you are not interested in ideology, only what works. Economists Helen Levy of the University of Michigan and David Meltzer of the University of Chicago, where you used to teach, have researched what works. They conclude there is “no evidence” that universal health insurance coverage is the best way to improve public health. Before enacting universal coverage, shouldn’t you spend at least some of the $1 billion you dedicated to comparative-effectiveness research to determine whether universal coverage is comparatively effective? Absent such evidence, isn’t pursuing universal coverage by definition an ideological crusade?

Sadly Michael, universal coverage is not about improving public health. If you want to do that, go teach some kids age 1–5 and build some sewage systems. Universal care is about making sure that the costs of health care are fairly distributed. Under the systems you prefer and the one we now have they’re distributed from the poor and sick to the healthy and wealthy—many of whom we both know work in the health care system. But apparently there was NOT ONE MENTION of the uninsured or sick people bankrupted by the system in the whole hour.

Holt’s categorization of my preferred health care “system” and the un-mentioned uninsured aside, he makes my point for me: universal coverage is about ideology, not health.  In fact, Holt demonstrates that the Church of Universal Coverage would be happy to have people die sooner if that would promote its ideo-religious goals.  I really should send him a fruit basket.

A draft congressional report said that comparative-effectiveness research would “yield significant payoffs” because some treatments “will no longer be prescribed.” Who will decide which treatments will get the axe? Since government pays for half of all treatments, is it plausible to suggest that government will not insert itself into medical decisions? Or is it reasonable for patients to fear that government will deny them care?

Why should patients fear it? We know that less intensive care is better, and cheaper primary care is better than more extensive specialty care.

So the government will insert itself into medical decisions.  Gotcha.  Holt is really clearing a lot of things up.

To answer his question, though, the concern is that one size really doesn’t fit all, and that the government’s rules will, shall we say, break my eggs to make his universal-coverage omelette.

You recently said the United States spends “almost 50 percent more per person than the next most costly nation. And yet … the quality of our care is often lower, and we aren’t any healthier.” Achieving universal coverage could require us to spend an additional $2 trillion over the next 10 years. If America already spends too much on health care, why are you asking Americans to spend even more?

Ah we agree. All the money should come from the current system, even if it means reducing the incomes of pundits, bloggers and those who sponsor them, and a few people in the system. Sadly the politics of the US means that apparently Obama can’t say that.

So nice when we can agree.  Now if only there were some way to deny incumbent producers the power to block more efficient ways of doing things … to block “progress,” if you will … hmmmmm

You found $600 billion worth of inefficiencies that you want to cut from Medicare and Medicaid. If government health programs generate that much waste, why do you want to create another?

You’re saying all government programs are the same? That means the US Marine Corps and the Iraqi volunteer EDF (or whatever it’s called) are the same. I could start a government program that saved $600b very easily in Medicare & Medicaid. I might make a few enemies.

Holt is right.  A new program might waste a lot less.  (Or a lot more.)  But the best part of his answer is that leftist impulse: “I could design a better social order if we could just get rid of that whole constitutional democracy thing.”

You and your advisors argue that Medicare creates misaligned financial incentives that discourage preventive care, comparative-effectiveness research, electronic medical records, and efforts to reduce medical errors. Medicare’s payment system is the product of the political process. What gives you faith that the political process can devise less-perverse financial incentives this time?

See my above answer, oh and abolish the Senate.

I refer my right, honorable friend to the answer I gave some moments ago.

You have said there are “legitimate concerns” that the government might give its new health plan an unfair advantage through taxpayer subsidies or by “printing money.” How do you propose to prevent this Congress and future Congresses from creating any unfair advantages?

I don’t know but I’ll make a deal. I’ll promise my health plan won’t have use an unfair advantage if you promise that AHIP’s members will stop lobbying Congress to rip-off the taxpayer.

Again, so helpful of Holt to acknowledge that the playing field between government and private insurers could never be level.

And to keep the insurance industry from ripping off the taxpayers, it seems we will have to give up either (1) the freedom of speech and to petition the government for a redress of grievances, or (2) the power that government currently wields over our health care sector and that the insurance companies’ lobbyists so often bend to their will.

Which brings me to Holt’s byline:

Matthew Holt is a vicious blogger who wouldn’t mind being President for a day or two but not without the ability to break Congress to his will in the first ten minutes.

Doesn’t sound like he would choose freedom over power.

Setting the Record Straight on Health Care Reform

President Obama took to the airwaves Wednesday in an effort to promote his plan for a national government-run health care system. He answered questions on rising costs, taxing benefits, and many other issues during an ABC News special on health care reform called “Questions for the President: Prescription for America.”

After live-blogging the ABC special, Cato scholars Michael D. Tanner and Michael F. Cannon dissect the president’s health care plan point by point.

Three Worthwhile Health Care Videos

The first comes from the group Patients United Now.  Keep this video in mind the next time you hear someone say that a new “public option” is not about a government takeover of the health care sector.

The next video comes from the Independence Institute in Colorado.  It is a nice complement to my colleague Michael Tanner’s recent study, “Massachusetts Miracle or Massachusetts Miserable: What the Failure of the ‘Massachusetts Model’ Tells Us about Health Care Reform.”

Finally, a really disturbing video showing Christina Romer, chair of President Obama’s Council of Economic Advisors, refusing to admit to a congressman that the president’s reform plan would oust Americans from their current health plans.

It’s a shame what politics does to really smart people.