Commentary

Hillary’s Worst Nightmare

Ever since the Clinton administration’s proposal to direct America’s health care system from Washington, D.C., went down in ignominious defeat a decade ago, its chief architect, Hillary Rodham Clinton, has shied away from “comprehensive health care reform,” preferring instead to take smaller steps toward government-run health care.

That is, until now.

Breaking what must have been a difficult 10-year silence, Sen. Clinton (D-N.Y.) asked on the cover of a recent issue of the New York Times Magazine, “Now Can We Talk About Health Care?” Without waiting for an answer, she called for “a new social contract for a new century premised on joint responsibility to prevent disease and provide those who need care access to it.” Unfortunately, the new social contract looks a lot like the old social contract she offered last century: perverse incentives plus tight federal controls on the practice of medicine, health benefits, insurance pricing, medical records, municipalities, hospitals, doctors, household cleaners, gym class, diet, urban sprawl, you name it. It’s déjà vu, all over again.

Of course, we never actually stopped talking about health care. The past decade has seen the Health Insurance Portability and Accountability Act, federal benefit mandates, the State Children’s Health Insurance Program, a Medicare prescription drug benefit, tax-free health savings accounts, hundreds of lawsuits, regulations, and state laws, and thousands of proposals that mercifully never became law, such as greater federal regulation in the name of patients’ rights. The conversation hasn’t abated because Congress’ perennial approach to health reform — shift responsibility and control away from patients — keeps creating problems that merit discussion.

However, we did stop talking about nationalization, which, ironically, has benefited the left. American medicine is already largely socialized, which causes problems that create an impetus for government action. Since nearly every act of Congress with “health” in the title brings greater socialization, the left has been slowly and surely moving us toward its goal.

So why would Clinton try to shift debate from a successful incremental strategy to the historically inhospitable terrain of “comprehensive health care reform?”

It certainly isn’t because the case is any stronger. Except for a few 21st century garnishes, Clinton’s manifesto relies on decade-old misconceptions and drifts into cognitive dissonance. She argues the U.S. ranks 42nd among nations in infant mortality, even though many nations underreport such deaths. We use a more inclusive definition of live births, and when measured by birth weight, infants do better here than in nations with supposedly lower mortality rates. She speaks of 43 million uninsured Americans despite authoritative scholarship showing the number is closer to half that figure. At the same time she decries the lack of treatments for rare diseases, she praises the same Food and Drug Administration that makes such treatments unprofitable. “Individuals should understand that they put their lives at risk with unhealthy behavior,” she says, but risk-based insurance pricing is cruel. Administrative costs are bad, but third-party payment is good. Emergency room overcrowding is not a consequence of socialization, but evidence of the need for greater socialization.

Nor has her prescription gotten any sounder. It remains “universal coverage,” despite evidence that what such health systems provide is neither universal nor coverage. She hints at rules that would substitute the government’s judgment about what treatments are appropriate for the judgment of the physician on the spot. The public health system would be brought “up to date” with authority to “control dangerous behaviors,” such as eating fast foods. To drive home the Orwellian tone, she pens, “It comes down to individual responsibility reinforced by national policy.”

No, the reason behind Clinton’s shift in strategy is hidden to all but the most ardent supporters and opponents of socialized medicine.

Tucked away in the recently enacted Medicare prescription drug bill is a deceptively small provision allowing personal, tax-free health savings accounts. Health savings accounts mark a fundamental shift in federal health care policy. Health savings accounts treat an individual’s medical expenditures and savings on a par with tax-free employer expenditures. As a result, they empower individuals to become stewards of their own health care dollars rather than force people to depend on their employer to spend those dollars wisely.

The consequences of this little-remarked change will be profound. Health savings accounts will lead patients to curb rising health care costs, demand greater value, and eliminate waste because it’s their money at stake.

However, the consequences that frighten the left are political. The left cannot impose a government-run health care system without a widespread sense of entitlement and openness to dependence, both of which are manifest in America’s health care sector. Yet health savings accounts breed the opposite values of personal responsibility and self-reliance. Where socialized medicine requires a culture of submission, health savings accounts will accustom millions to making their own decisions. This cultural change not only will lead voters to resist socialization of the private health care sector, but as these voters reach retirement age they will demand reforms that give them a greater degree of choice within Medicare. Just as IRAs and 401(k)s made the political landscape more hospitable to Wall Street and free markets by turning Americans into investors, health savings accounts will generate the political will to enact consumer-based Medicare reforms by turning millions of Americans into sovereign health care consumers.

Former Sen. Phil Gramm quips that the left reacts to health savings accounts like a vampire reacts to a cross, because the left knows that once patients get a taste of freedom, all hope of achieving a government-run health care system will vanish.

Clinton inadvertently acknowledges this reason for her change in strategy by veering off-message for several column-inches to denounce health savings accounts and similar reforms. She argues that as stewards of their own health care dollars, consumers aren’t sophisticated enough to demand value from medical providers and will harm themselves by forgoing needed care to save a few bucks. Like all opponents of consumerism, the real object of her disapproval is the public’s intelligence. More importantly, health savings accounts and similar reforms threaten, as she puts it, “what we consider traditional insurance.”

To the most ardent supporters and opponents of health care consumerism, Clinton’s desire to accelerate socialization makes perfect sense. Considering how health savings accounts will transform America’s health care sector, it’s imperative.

For the first time, advocates of socialized medicine are on the run. This ought to be good.

Michael F. Cannon is director of health policy studies for the Cato Institute.