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Cato Policy Report, May/June 2009

Obamacare: Medical Malpractice

by Edward H. Crane

Edward H. Crane is the founder and president of the Cato Institue.

The columnist Robert J. Samuelson had a perceptive piece in the Washington Post recently in which he stood back from the policy trees to look at the Barack Obama forest. What he saw was disturbing. He suggests that Obama is advancing a "post-material economy" designed to "achieve broad social goals" that will end up spending more to get less. The president proposes to radically restructure America's energy industry through massive tax increases ("cap and trade") in the name of fighting the problematic notion that mankind's miniscule addition to greenhouse gases will create crippling global warming. But as the world-renowned scientist Freeman Dyson points out, "Most of the evolution of life occurred on a planet substantially warmer than it is now and substantially richer in carbon dioxide."

Obama also proposes to make the failed public school model available to even younger children and make liberal arts college more accessible to hundreds of thousands of students who, as American Enterprise Institute scholar Charles Murray points out, would be much better off going to vocational schools or junior colleges. Obama would escalate George W. Bush's efforts to essentially federalize education in America. Never mind that the word "education" in not to be found in the federal Constitution.

But perhaps most threatening to most Americans is Obama's determination to nationalize health care in America. It's a truly bad idea. But that is what the president has made clear he wants. Obama has publicly declared his preference for a single-payer system "managed like Canada." His initial proposal, part of an ill-defined $634 billion "down payment" on health care reform, would create heavily subsidized federal insurance that would put private insurance at an unhealthy disadvantage. Some estimates suggest that private insurance would be reduced by more than 60 percent, leading ultimately to its collapse. Speaking of the Canadian system, Obama says of his approach that "it may be we end up transitioning to such a system." Ya think?

That, of course, would be a tremendous mistake, a fundamental mistake. America is a land of free individuals. Socialized medicine is not what we as a nation are about—and with good reason, both philosophical and practical. Consider:

Really, does it make any sense whatsoever to change our health care system to a nationalized system? None of which should suggest that we can't improve on our employer-based, third-party payer approach. And we seem to be moving away from that. Cato published the first book on Health Savings Accounts, which bring about a major improvement by individualizing and making portable health insurance. The next great innovation is from University of Chicago finance professor and newly minted Cato adjunct scholar John Cochrane. His Cato Policy Analysis (no.633), "Health-Status Insurance: How Markets Can Provide Health Security," is a brilliant solution to high insurance costs and issues such as preexisting conditions.

While left-wing coalitions like Health Care for America Now gear up to do battle, and more traditional opponents of socialized medicine like the business community and the American Medical Association prepare to essentially capitulate, all parties should pay attention to a recent front page story in the New York Times, headlined "Doctor Shortage Proves Obstacle to Obama Goals." You don't suppose that shortage has anything to do with the prospect of nationalized health care, do you?



This article originally appeared in the May/June 2009 edition of Cato Policy Report.