• SUPPORT CATO
• FOR STUDENTS
• FOR MEDIA
• FREE NEWSLETTERS

• HOME

• ABOUT

• BLOG

• CATO STORE

• CENTERS & PROJECTS

• EVENTS

• EXPERTS

• MULTIMEDIA

• PUBLICATIONS

Books

Reviews & Journals

Public Filings

Policy Studies

Opinion & Commentary

• RESEARCH AREAS

• SPEAKERS BUREAU

• SUPPORT CATO

• CATO UNBOUND

• DOWNSIZING
  GOVERNMENT.ORG

• ELCATO.ORG

• LIBERTARIANISM.ORG

January 7, 2009

Drawing the Line at Socialized Medicine

Cato director of health policy studies Michael F. Cannon argues in a Washington Times op-ed that any health care reform "that crosses one of the following lines should be stopped. Not watered down. Not enacted and fixed later. Killed." Those lines in the sand are:

1. No government-run health care for the middle class
2. No mandates
3. No price controls

Cannon writes that those measures "would cost lives by effectively nationalizing health insurance and impeding innovations that make medicine better, cheaper and safer." Cannon calls on moderate Democrats and independents to help block socialized medicine, but adds that for Republicans it is a matter of survival.

To Stimulate the Economy, Defeat Universal Coverage

Supporters of universal coverage claim that health care reform will stimulate the economy. In a Cato@Liberty blog post, Cannon responds:

If anything, the economy appears to grow faster when Congress rejects universal coverage. After Congress defeated President Harry Truman's proposal for national health insurance in 1949, the nation enjoyed four years of robust economic growth. The defeat of the Clinton Health Security Act in 1994 was followed by six years of robust economic growth. The largest step Congress has taken toward universal coverage was when it launched Medicare and Medicaid in 1966. Real economic growth averaged 5.7 percent in the four years prior to 1966, but only 2.7 percent in the four years that followed.

"If history is any guide," Cannon concludes, "politicians who want to stimulate the economy should be trying to defeat universal coverage." Cannon's post includes a chart showing how economic growth is typically greater following the defeat of Democratic proposals for universal coverage, and weaker after such proposals become law.

Tanner to Appear on PBS

Cato senior fellow Michael D. Tanner will be featured in a Fred Friendly Seminar on the future of health care reform. The pre-taped seminar was hosted by NYU law professor Arthur Miller and features AARP CEO Bill Novelli, former U.S. Comptroller General David Walker, Washington Post Bureau Chief T.R. Reid, and Harvard Business School professor Regina Herzlinger. The program will be broadcast by PBS the week of January 18. For information on when it can be seen in your area, click here.

Cato in the Media

Cato's message of a freer, more consumer-driven health policy continues to be picked up by the mainstream media:

• USA Today quotes Cannon about why interest groups, from insurers to doctors, all want to be involved in proposed reforms: "They all want to be at the table because they don't want to be on the menu. Sooner or later, someone is going to be on the menu. You can't do comprehensive reform without goring someone's ox."
• Investor's Business Daily quotes Cannon on why Republicans must unite over health care or face extinction: "The best way to stop the GOP's signature issue, tax cuts, is if liberal politicians threaten voters that tax cuts mean that their subsidized health care will be cut. Twenty-eight percent of Americans already get their health insurance from government. If more do, it will be the death knell for Republicans."
• The AP quotes Cannon in opposition to a congressional bailout of state Medicaid programs: "The states make these promises they know they can't keep and then they run to Congress to bail them out. And Congress typically ends up bailing them out." Cannon points out that the bill for a bailout would fall on future generations: "And who better to push those costs onto than to people who can't even vote yet?"
• Investor's Business Daily quotes Cannon on a Congressional Budget Office report on health care, which "shows that many of the things that Obama and Congressional Democrats think will save costs, such as preventive care and information technology, won't really save much money. It also shows that covering the uninsured will cost a lot of money."

Cato Podcasts

In a Cato Daily Podcast, Tanner tackles three of the health care proposals in store for the 111th Congress. Tanner examines the plans by Sen. Max Baucus (D-MT), Sen. Ted Kennedy (D-MA), and President-elect Barack Obama.

In another Cato Daily Podcast, Cannon looks at how Obama's choice of economic advisors might frustrate his plans for health care reform. Both Peter Orszag (Obama's selection for Director of the Office of Management and Budget), and Larry Summers (his pick to head the National Economic Council) have questioned the merits of various aspects of Obama's health plan.

Gov. Jindal's "Free-Market" Medicaid Reforms?

Louisiana Gov. Bobby Jindal (R) has unveiled an ambitious package of Medicaid reforms that await federal approval. Some claim Jindal's proposal is a step toward free-market health care. Yet in a post to the Cato@Liberty blog, Cannon writes, "Jindal's plan is not market-based reform...Jindal wants to expand eligibility. For a welfare program. And we call that market-based?... Discerning consumers of market-based ideas should keep shopping."

How Should Developing Nations Regulate Health Care?

In a letter to the editor of the journal Health Affairs, Cannon questions whether extensive government regulation and a policy of universal coverage are the right prescription for developing countries such as China and India:

China and India are in the process of a slow climb out of poverty. It is entirely possible that the best thing those governments could do to improve these markets and population health would be to enforce contracts, punish torts, contain contagion, and nothing else.

Read the entire letter here.

Healthy Competition is a periodic newsletter produced by the Cato Institute. It features news and commentary on current health policy issues from a free-market perspective. If you wish to subscribe to this free newsletter, update your address, or be removed from our list, please click here and follow the instructions. Send feedback to healthycompetition@cato.org.