Goodby real health care reform. President Obama delivered a 6,000-word speech (PDF) on health care reform to the American Medical Association earlier today. In it, he rejected a single-payer system — the only health care system that can (a) cover everyone, (b) control costs, and (c) not require cruel rationing.
Here’s the section of the speech where he pours hot lava on the hopes of those who seek to really reform the system instead of further enriching the health insurance and pharmaceutical industries:
…And one of these options needs to be a public option that will give people a broader range of choices and inject competition into the health care market so that force waste out of the system and keep the insurance companies honest. (Emphasis added.)
Now, I know there’s some concern about a public option. In particular, I understand that you are concerned that today’s Medicare rates will be applied broadly in a way that means our cost savings are coming off your backs. These are legitimate concerns, but ones, I believe, that can be overcome. As I stated earlier, the reforms we propose are to reward best practices, focus on patient care, not the current piece-work reimbursement. What we seek is more stability and a health care system on a sound financial footing. And these reforms need to take place regardless of what happens with a public option. With reform, we will ensure that you are being reimbursed in a thoughtful way tied to patient outcomes instead of relying on yearly negotiations about the Sustainable Growth Rate formula that’s based on politics and the state of the federal budget in any given year. The alternative is a world where health care costs grow at an unsustainable rate, threatening your reimbursements and the stability of our health care system.
What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system. I’ll be honest. There are countries where a single-payer system may be working. But I believe - and I’ve even taken some flak from members of my own party for this belief - that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I’m trying to bring about government-run health care, know this - they are not telling the truth.
So there it is, folks: so much for the hope that we would at last act in our enlightened self-interest. The Democratic Party’s delusion that there is such a thing as a health care market is alive and well. Our President and congressional Democrats have caved-in to Big Pharma and Big Insurance.
The President and all other Democrats who assert that a single-payer solution is not a good American solution, let alone a solution good for American, need to read The Predator State, by James Galbraith, an economist at the University of Texas. Galbraith neatly exposes the health care market fiction:
What is “health care,” and is it bought and sold in a market? Obviously not: health care is not any specific thing, but a label covering a class of goods and services, an enormously diverse class, adapted to the specific health condition of each individual patient. There is no unit of health care; if you draw a supply-and-demand diagram, there is no quantity to put on the horizontal axis and no price to record on the vertical axis. Health care is therefore not a commodity that is bought and sold at a given price on an open market.…There is not only no market in health care, there are no markets with health care either. The suggestion that “market forces” might be usefully deployed to regulate prices and quantities in this are runs into the basic difficulty that no such markets either do exist or could exist.
Of course, actual proposals to introduce market forces in health care are largely concerned not with the provision of health care itself but with the provision of insurance.…A successful private insurance company follows an ancient formula: it stratifies its clientele by risk class and charges premiums adapted to each class. The most successful companies are generally those that manage to exclude the riskiest clients.
Public universal health insurance schemes like Medicare do not evaluate risk. Since they are universal, they do not need to. Therefore, they save the major cost of providing private health insurance. They pay their personnel at civil service salary scales and are under no obligation to return a dividend to shareholders or meet a target rate of return. Insurance in general is therefore intrinsically a service that the public sector can competently provide at lower cost than the private sector, and from the standpoint of an entire population, selective private provision of health insurance is invariably inferior to universal public provision. Private health insurance companies would not exist except for their political capacity for forestall the creation of universal public system, backed by their almost unlimited capacity to sow confusion among the general public over the basic economic facts. Liberals who support anything less than a common, public insurance pool have no argument. They are simply tugging their forelocks and bending their knee before this particular bastion of private power. (Emphasis added.)