Let's Hope History Repeats Itself

The cost estimates for universal healthcare seem to change daily, but the one number that seems to keep bubbling up to the surface is $1 trillion. In case you missed that, I repeat: $1 trillion.

“Those who cannot remember the past are condemned to repeat it.”

--George Santayana, Spanish philosopher and poet

In the interest of full disclosure, I should say right at the top that I have disagreed with the vast majority of initiatives thus far pursued by President Obama. I believe his stimulus plan has worsened the economy and increased the burden on the small businesses that are the primary driver of economic growth. I believe that his speeches on foreign policy have weakened US interests at home and abroad. But it is the Obama administration’s approach to healthcare that I believe is the greatest threat to the long-term health of the country.

The cost estimates for universal healthcare seem to change daily, but the one number that seems to keep bubbling up to the surface is $1 trillion. In case you missed that, I repeat: $1 trillion. If that number sounds familiar, that’s because several news outlets have reported that the U.S. Federal budget deficit exceeded the $1 trillion mark in June. (What’s another trillion among friends?)

Where are we getting a trillion dollars to pay for universal healthcare? To put this number in context, the $80 billion the drug lobby PhRMA recently agreed to forego in drug payments as part of a deal with Congress represents less than 1% of the 10-year cost of the reform plan. As noted in a previous column, the “savings” Obama envisions as part of electronic medical record adoption and other measures are largely a mirage.

The bigger problem, if it’s possible, is the bureaucracy and inefficiency we could expect from a nationally run and financed healthcare option. Make no mistake: the administration’s verbal backpedaling over the “public plan option” is a smokescreen. The just-released Senate Health, Education, Labor and Pensions Committee bill, like the one introduced by House Democrats, includes the public option, which would establish a new government insurance plan to compete with private insurers. Future versions of the plan will likely include the public option as well, despite the President’s rhetoric that such a plan was not a prerequisite for passing legislation. It’s yet another case of Obama saying one thing while openly ordering his policymakers to do the opposite.

Proponents of universal healthcare often point to the success of such plans overseas, but recent analysis of universal care in Britain, Canada, and Greece reveal failing systems in each country, with the problems in Canada, in particular, worsening by the day. A closer look at the delivery of care under a similar system in Massachusetts should send shivers down the spine. In May, an in-depth article in the New York Times revealed some of the warts of the new system: “[A survey] raised red flags regarding the ability of residents to actually use that care, with growing numbers saying they could not afford needed treatments and many reporting shortages of primary care physicians.”

The study’s authors wrote that there were lessons for Washington, where Congressional committees are incorporating much of the Massachusetts model into federal health care legislation. “Although major expansions in coverage can be achieved without addressing health care costs, cost pressures have the potential to undermine the gains,” the Times quoted researchers Sharon K. Long and Paul B. Masi of the Urban Institute.

That analysis was from the Times, long a proponent of a single-payer system. A slightly less favorable op-ed in the Wall Street Journal included this tidbit: “[Massachusetts is] trying to manage the huge costs of the subsidized middle-class insurance program that is gradually swallowing the state budget. The program provides low- or no-cost coverage to about 165,000 residents, or three-fifths of the newly insured, and is budgeted at $880 million for 2010, a 7.3% single-year increase that is likely to be optimistic. The state’s overall costs on health programs have increased by 42% (!) since 2006.”

The next step in Massachusetts is what would inevitably happen on a national level: healthcare rationing. The state is considering a host of alternatives, from eliminating coverage for lower-cost services to limiting “the total amount of money available for healthcare services.” Does that sound like rationing to you? It certainly sounds like it to me. The Massachusetts model, hailed 2 years ago as a success by the Cato Institute, is emerging as a policy catastrophe.

The WSJ concludes, “Which brings us to Washington, where Mr. Obama and Congressional Democrats are about to try their own Bay State bait and switch: First create vast new entitlements that can never be repealed, then later take the less popular step of rationing care when it’s their last hope to save the federal fisc. The consequences of that deception will be far worse than those in Massachusetts, however, given that prior to 2006 the state already had a far smaller percentage of its population uninsured than the national average. The real lesson of Massachusetts is that reform proponents won’t tell Americans the truth about what ‘universal’ coverage really means: Runaway costs followed by price controls and bureaucratic rationing.”

The best hope for those of us who believe in modifications to private healthcare is that those opposed to public plan remember their history: Clinton Care went down in defeat 15 years ago. Already, public support for healthcare is waning. A recent survey by Rasmussen Reports shows that 49% of respondents said they were at least somewhat opposed to the unfolding health care reform plan, while 46% at least somewhat favored it, according to the survey by Rasmussen Reports. Just a little while ago, 50% were for the reform plan and 45% were opposed.

With growing concerns about the obscene $1 trillion price tag now escalating, let’s hope history repeats itself. That would mean sound defeat for the sprawling mess that is the Obama healthcare plan.

Mike Hennessy is Chairman and CEO of MJH & Associates. Click here for more Hennessy's Highlights