This is the second of a series of commentaries examining the state of health-care including the serious problems with health-care delivery, the underlying root causes of those problems, the looming government fiscal catastrophe secondary to health-care entitlement spending, the failure of the recently passed health-care “reform” to address the grave problems facing our nation related to health-care delivery, the harm the recently passed health-care “reform” will cause to our seriously ill economy, and a proposal for a framework to truly, effectively, and sustainably reform our health-care delivery system. This report will review and expand on a previous discussion on unsustainable health-care cost growth.
The author feels obligated to disclose underlying bias: 1. this analysis reflects the author’s strong belief in the efficiencies and fairness of free markets as well in the individual’s right and responsibility of self-determination and of self-reliance. 2. I have 3 daughters, 3 nieces, and 9 nephews who deserve their opportunity to live the American Dream – a dream made possible by the protection of our inalienable rights endowed by our Creator
Unsustainable Health-Care Cost Growth
Returning to the essential issue, health-care costs continue to climb, putting increasing fiscal strain on Federal, state, and local governments, as well as on businesses and families. According to a 2008 Congressional Budget Office report, from 1965-2005, costs have increased by a factor of 9 in inflation-adjusted dollars. Over that same period, health-care expenditure has increased from 5% to 15% of US GDP. A separate CBO statement reports Federal outlays for Medicare and Medicaid have risen 5 fold from 1970 to 2009, as measured as a percentage of GDP. In a recent letter to Senator Kent Conrad, the Chairman of the Budget Committee, the Director of the CBO reports that by 2017, Medicare Part A will have insufficient funds to pay for all covered services. The 2009 Medicare Trustees Reports estimates that the projected unfunded liability (the difference between costs of the benefits promised and the projected revenue from dedicated Medicare taxes and Medicare premiums) is $89 trillion dollars. This gap can only be closed with either significant benefits cuts, significant tax increases or both. That report estimated that a tax solution alone would require total payroll taxes to climb to 37% to meet the retirement promises (Medicare and Social Security (1/5th of the Medicare liability)) made to the young people who today are entering the work force. If payroll taxes don’t rise to cover the deficit, general tax revenues would need to be transferred to cover the shortfall. Currently, 13% of Federal tax revenues are spent to cover the Medicare and Social Security expenses. In the same report, that percentage is projected to grow to 27% by 2020 and 49% by 2030. As more of the budget flows to these entitlements, the other Federal Government services that now receive 87% of the Federal Budget e.g. defense, education, infrastructure maintenance, and the thousands of other federal programs, will consequently be progressively and drastically scaled back with alarming consequences.
Costs have grown faster in the private sector. A recent Kaiser health benefits survey found that employer-sponsored premium costs increased 119% from 1999 to 2008, far outpacing wage growth over the same period. The escalating costs have had significant chilling effects on the general economy and employment. Higher insurance benefits costs result in lower wages and in turn lower consumers spending and savings. For the businesses that provide health-care employee benefits, higher costs for that insurance leave less capital to invest in the business and make those businesses less competitive in the global economy. Broader detrimental economic consequences of these costs were confirmed in a recent RAND corporation study that demonstrated among corporations that provide employee health-care benefits, increasing health-care costs result in greater unemployment and lower industrial output.
The next Dr Right installment will examine value-added health-care cost drivers.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problem facing our state and nation. Learn about the issues and talk to others about the issues. Join your local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
Sunday, April 18, 2010
Sunday, April 11, 2010
Sensible Health-Care Reform (Part 1): Framing the Debate
This is the first of a series of commentaries examining the state of health-care including the serious problems with health-care delivery, the underlying root causes of those problems, the looming government fiscal catastrophe secondary to health-care entitlement spending, the failure of the recently passed health-care “reform” to address the grave problems facing our nation related to health-care delivery, the harm the recently passed health-care “reform” will cause to our seriously ill economy, and a proposal for a framework to truly, effectively, and sustainably reform our health-care delivery system.
The author feels obligated to disclose underlying bias: 1. this analysis reflects the author’s strong belief in the efficiencies and fairness of free markets as well in the individual’s right and responsibility of self-determination and of self-reliance. 2. I have 3 daughters, 3 nieces, and 9 nephews who deserve their opportunity to live the American Dream – a dream made possible by the protection of our inalienable rights endowed by our Creator
Although President Obama and the Democratic Congress has rammed through so called health-care reform, in fact, that “reform” can only make our health-care crisis worse, not better. To move forward with critically needed constructive health-care reform, it must be understood that two distinct starting points underlie the push to reform our current system. The first perspective stresses the need to address the problem of the uninsured and the related problem of pre-existing medical conditions. The second perspective stresses the need to control the escalating costs. Realistically to move forward with constructive reform, it must be acknowledged and understood that the first perspective must be subordinate to the second. Very clearly, the health-care cost growth is fiscally untenable going forward. Reform that expands access without first controlling costs can only result in accelerated failure of the system and is no reform at all. A health-care system that now threatens the financial viability of many individuals and families, many businesses, and multiple state and Federal governments makes all other health-care issues moot. Access to health-care for the uninsured or those with pre-existing medical conditions must be addressed but can not be addressed on a sustainable basis until tackling the fundamental issue of unsustainable health-care costs growth. That being said, proper reform that results in lower health-care costs and consequent lower health-care insurance costs, would go a long way toward addressing the uninsured and pre-existing medical condition problem by making coverage more affordable.
Before addressing the central issue of escalating cost, a brief examination of the uninsured population assists in placing perspective on the health-care reform discussion as well as on the proposed solutions. The number of uninsured persons is somewhat fluid. The US Census Bureau places the estimate of the number of the uninsured at 47 million or 16% of the population. Conversely, 250 million Americans have coverage and, for the most part, are satisfied with that coverage. The number of uninsured individuals is significantly related to employment. 2008 statistics from the CDC, found that change in employment accounted for 24% of the uninsured.
A study done by the Agency of Healthcare Research and Quality looking at statistics of the uninsured during the period of 1996-2008, found that for the full year of 2007, there were 39.9 million uninsured persons under the age of 65. That number included 5.9 million children who qualified for government subsidy or whose families were able to afford insurance. That number also included 12 million illegal aliens. The AHRQ also found that of those uninsured individuals 18-24 years of age, 55% were uninsured for at least a month but only 18% for a 2 year period, indicating many individuals without health-care are so temporarily. This data further suggests the actual number of chronically uninsured amounts to a fraction of the commonly reported 47 million uninsured thus bringing into question the logic of addressing the problem of the chronically uninsured (a small percentage of the population) by a massive Federal takeover of health-care that would affect the great majority who have and are happy with their insurance coverage.
A study out of Baruch College, City University of New York reviewed information from surveys of the uninsured population and found that 43% of those in the 18-64 year age group had incomes of at least 250% of the Federal poverty level suggesting that many persons in this category have made a financial allocation decision not to obtain health-care insurance though they likely could do so, albeit significantly constraining other discretionary spending. The investigators in this study classified these persons as “voluntarily uninsured” and the remaining 57% with lesser financial means as “involuntarily uninsured”. They further found that the entire uninsured population still has significant access to health-care services, but approximately 40% of services utilized by those with insurance. Interestingly, the percentage of the uninsured group accessing cancer screening services roughly equals that of those in the Canadian nationalized, single-payer system.
The next Dr Right installment will review the unsustainable health-care costs growth.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problem facing our state and nation. Learn about the issues and talk to others about the issues. Join your local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
The author feels obligated to disclose underlying bias: 1. this analysis reflects the author’s strong belief in the efficiencies and fairness of free markets as well in the individual’s right and responsibility of self-determination and of self-reliance. 2. I have 3 daughters, 3 nieces, and 9 nephews who deserve their opportunity to live the American Dream – a dream made possible by the protection of our inalienable rights endowed by our Creator
Although President Obama and the Democratic Congress has rammed through so called health-care reform, in fact, that “reform” can only make our health-care crisis worse, not better. To move forward with critically needed constructive health-care reform, it must be understood that two distinct starting points underlie the push to reform our current system. The first perspective stresses the need to address the problem of the uninsured and the related problem of pre-existing medical conditions. The second perspective stresses the need to control the escalating costs. Realistically to move forward with constructive reform, it must be acknowledged and understood that the first perspective must be subordinate to the second. Very clearly, the health-care cost growth is fiscally untenable going forward. Reform that expands access without first controlling costs can only result in accelerated failure of the system and is no reform at all. A health-care system that now threatens the financial viability of many individuals and families, many businesses, and multiple state and Federal governments makes all other health-care issues moot. Access to health-care for the uninsured or those with pre-existing medical conditions must be addressed but can not be addressed on a sustainable basis until tackling the fundamental issue of unsustainable health-care costs growth. That being said, proper reform that results in lower health-care costs and consequent lower health-care insurance costs, would go a long way toward addressing the uninsured and pre-existing medical condition problem by making coverage more affordable.
Before addressing the central issue of escalating cost, a brief examination of the uninsured population assists in placing perspective on the health-care reform discussion as well as on the proposed solutions. The number of uninsured persons is somewhat fluid. The US Census Bureau places the estimate of the number of the uninsured at 47 million or 16% of the population. Conversely, 250 million Americans have coverage and, for the most part, are satisfied with that coverage. The number of uninsured individuals is significantly related to employment. 2008 statistics from the CDC, found that change in employment accounted for 24% of the uninsured.
A study done by the Agency of Healthcare Research and Quality looking at statistics of the uninsured during the period of 1996-2008, found that for the full year of 2007, there were 39.9 million uninsured persons under the age of 65. That number included 5.9 million children who qualified for government subsidy or whose families were able to afford insurance. That number also included 12 million illegal aliens. The AHRQ also found that of those uninsured individuals 18-24 years of age, 55% were uninsured for at least a month but only 18% for a 2 year period, indicating many individuals without health-care are so temporarily. This data further suggests the actual number of chronically uninsured amounts to a fraction of the commonly reported 47 million uninsured thus bringing into question the logic of addressing the problem of the chronically uninsured (a small percentage of the population) by a massive Federal takeover of health-care that would affect the great majority who have and are happy with their insurance coverage.
A study out of Baruch College, City University of New York reviewed information from surveys of the uninsured population and found that 43% of those in the 18-64 year age group had incomes of at least 250% of the Federal poverty level suggesting that many persons in this category have made a financial allocation decision not to obtain health-care insurance though they likely could do so, albeit significantly constraining other discretionary spending. The investigators in this study classified these persons as “voluntarily uninsured” and the remaining 57% with lesser financial means as “involuntarily uninsured”. They further found that the entire uninsured population still has significant access to health-care services, but approximately 40% of services utilized by those with insurance. Interestingly, the percentage of the uninsured group accessing cancer screening services roughly equals that of those in the Canadian nationalized, single-payer system.
The next Dr Right installment will review the unsustainable health-care costs growth.
Call to Action: Though passed by an appalling political process and with complete disregard of our Constitution, though containing ineffective and even harmful policy, though disregarding the inalienable rights given to us by our Creator, the passed health-care reform bill is not the end of the debate but rather a new beginning. It is an opportunity to contrast irresponsible policy with prudent policy, to contrast misconceived policy with thoughtful policy, and to contrast policy that places government in the center with policy that places the individual in the center. Get in the fight and stay in the fight. We have learned, the hard way, the consequences of leaving it up to the career politicians. Contact your legislators and demand they exercise the privilege the voters gave them to represent us to effectively address health-care delivery and the other problem facing our state and nation. Learn about the issues and talk to others about the issues. Join your local grass roots organizations like the York 9-12 Patriots, York County Action, York Campaign for Liberty, and others, so we can take back the political process that has become corrupt and ineffective. We must work to bring up, from the grass root level, candidates – principled persons (Republicans, Democrats, and Independents) who will actually solve problems, who will respect the Constitution of the United States, and who will honor the “consent of the governed” entrusted to them by the citizens of our counties, states, and country.
Saturday, March 20, 2010
Really? This is an Improvement?
As President Obama once again goes into campaign mode, now for the “final” push for passing “Health-Care Reform”, he apparently believes that his silver-tongued oratory can change falsehood into truth. In every speech, he ardently claims this “reform” will lower costs and help the economy. Is that so? Yet his arguments are pure rhetoric. Not once has he laid out a specific and quantifiable explanation how the Senate Bill will lower costs. He hasn’t done so because he can’t. Further more, for him, costs and truth will not get in the way of his and the Democratic leadership’s efforts to impose his big government and progressive vision on the citizens of our republic who reject this vision.
His “all rhetoric and no substance” modus operandi was displayed in its stark reality during his recent “Health-Care Summit”. After the President’s usual eloquent introduction, Representative Paul Ryan of Wisconsin presented to him the following analysis of the Congressional Budget Office’s estimate that indicated that the Senate Health-care bill would lower the deficit by $131 billion dollars over the next 10 years. He began by expressing his confidence in and respect for the CBO, but explained that the CBO estimates are only as good as the assumptions they are instructed to use. He first pointed out that the CBO estimate assumes 10 years of tax collections for 6 years of spending on this new entitlement program. He next identified that the CBO estimate counts $52 billion of increased Social Security revenues toward defraying the costs of this new program. The SS program itself has an estimated $17 trillion dollar unfunded liability. That $52 billion can be put to one or the other program, but not both. Similarly, the estimate also includes $78 billion of premiums from the CLASS program (Federal long-term care program). Again, those dollars can be applied to one or the other program, but not both. Perhaps most significantly, the estimate includes taking $500 billion out of Medicare to apply to this new entitlement. Yes, the same Medicare program that currently has an estimated $89 trillion dollar unfunded liability. He further pointed out the Medicare’s Chief Actuary predicts that diverting $500 billion from Medicare will result in 20% of providers dropping Medicare patients and also result in millions of seniors losing their Medicare Advantage coverage.
Recalculating the CBO estimate utilizing assumptions that closer reflect reality, Congressman Ryan concluded this new entitlement would further expand the deficit by $460 billion dollars over 10 years, not reduce the deficit by $131 billion deficit reduction as claimed by the proponents of the current Senate health-care bill. Over the 2nd ten years, the estimated deficit expands to $1.4 trillion.
This more accurate estimate, disturbing as it is, in all likelihood, reflects likely a best case scenario. The Federal government health-care cost estimates are notoriously inaccurate. Just 2 examples: 1. During its first year, Medicaid was expected to cost $238 million but wound up costing over $ 1 billion. In fiscal 2009, Medicaid cost $251 billion. 2. In 1965, the CBO estimated that Medicare costs would be $12 billion in 1990. Turns out the “reality” number was $90 billion, off by more than a factor of 7.
At his “Health-care Summit”, President Obama didn’t refute or even substantively address a single argument made by Congressman Ryan; he simply changed the subject with another rhetorical flourish.
President Obama correctly assesses that controlling heath-care costs is essential for the well being of our economy and the government’s fiscal condition, but could hardly be more dishonest in insisting the reform he and the Democratic majority are shamefully (e.g. reconciliation, deeming the Senate Bill passed without a vote) working hard to impose on the citizens of this Republic, will make the situation better and not worse.
His “all rhetoric and no substance” modus operandi was displayed in its stark reality during his recent “Health-Care Summit”. After the President’s usual eloquent introduction, Representative Paul Ryan of Wisconsin presented to him the following analysis of the Congressional Budget Office’s estimate that indicated that the Senate Health-care bill would lower the deficit by $131 billion dollars over the next 10 years. He began by expressing his confidence in and respect for the CBO, but explained that the CBO estimates are only as good as the assumptions they are instructed to use. He first pointed out that the CBO estimate assumes 10 years of tax collections for 6 years of spending on this new entitlement program. He next identified that the CBO estimate counts $52 billion of increased Social Security revenues toward defraying the costs of this new program. The SS program itself has an estimated $17 trillion dollar unfunded liability. That $52 billion can be put to one or the other program, but not both. Similarly, the estimate also includes $78 billion of premiums from the CLASS program (Federal long-term care program). Again, those dollars can be applied to one or the other program, but not both. Perhaps most significantly, the estimate includes taking $500 billion out of Medicare to apply to this new entitlement. Yes, the same Medicare program that currently has an estimated $89 trillion dollar unfunded liability. He further pointed out the Medicare’s Chief Actuary predicts that diverting $500 billion from Medicare will result in 20% of providers dropping Medicare patients and also result in millions of seniors losing their Medicare Advantage coverage.
Recalculating the CBO estimate utilizing assumptions that closer reflect reality, Congressman Ryan concluded this new entitlement would further expand the deficit by $460 billion dollars over 10 years, not reduce the deficit by $131 billion deficit reduction as claimed by the proponents of the current Senate health-care bill. Over the 2nd ten years, the estimated deficit expands to $1.4 trillion.
This more accurate estimate, disturbing as it is, in all likelihood, reflects likely a best case scenario. The Federal government health-care cost estimates are notoriously inaccurate. Just 2 examples: 1. During its first year, Medicaid was expected to cost $238 million but wound up costing over $ 1 billion. In fiscal 2009, Medicaid cost $251 billion. 2. In 1965, the CBO estimated that Medicare costs would be $12 billion in 1990. Turns out the “reality” number was $90 billion, off by more than a factor of 7.
At his “Health-care Summit”, President Obama didn’t refute or even substantively address a single argument made by Congressman Ryan; he simply changed the subject with another rhetorical flourish.
President Obama correctly assesses that controlling heath-care costs is essential for the well being of our economy and the government’s fiscal condition, but could hardly be more dishonest in insisting the reform he and the Democratic majority are shamefully (e.g. reconciliation, deeming the Senate Bill passed without a vote) working hard to impose on the citizens of this Republic, will make the situation better and not worse.
Saturday, February 27, 2010
It's the Costs
A recent WSJ Capitol Journal analysis of President Obama’s health-care summit pointed out that although no agreement was reached, at least the debate partially clarified the differences between the Democrat and Republican positions. Particularly significant, the Democrat starting point for health-care reform is the problem of the uninsured and the related problem of pre-existing medical conditions, while the Republican perspective emphasizes the need to control the escalating costs. Fundamentally, to move forward with constructive reform and actually improve our health-care system, rather than just implement change because “something needs to be done”, it must be understood that the first perspective has to be subordinate to the second.
The escalating health-care costs have alarming implications for the Federal Budget. The 2009 Medicare Trustees Reports estimates that the projected unfunded liability (the difference between costs of the benefits promised and the projected revenue from dedicated Medicare taxes and Medicare premiums) is $89 trillion dollars. This gap can only be closed with either significant benefits cuts, significant tax increases or both. A tax solution alone would require total payroll taxes to climb to 37% to meet the retirement promises (Medicare and Social Security (1/5th of the Medicare liability)) made to the young people who today are entering the work force.
If payroll taxes don’t rise to cover the deficit, general tax revenues would need to be transferred to cover the shortfall. Currently 13% of Federal tax revenues are spent to cover the Medicare and Social Security deficits. That percentage is projected to grow to 27% by 2020 and 49% by 2030. By 2050, Medicare, Medicaid, and Social Security will consume the entire budget on the current fiscal trajectory. As more and more of the budget flows to these entitlements, the other Federal Government services that now receive 87% of the Federal Budget e.g. defense, education, infrastructure maintenance, and the thousands of other federal program, will consequently be progressively and drastically scaled back with frightening and even existential ramifications.
The economic scale and scope of such a financial calamity makes consideration of additional benefits such as covering the uninsured or those with pre-existing medical conditions beside the point. Not that those problems should not be addressed but that they can not possibly be addressed on a sustainable basis until solving the fundamental issue of unsustainable health-care costs growth. Given that Federal and state governments now account for nearly 50% of all medical expenditure and given the financial status of those programs (Medicare, Medicaid, et al), can anyone reasonably believe that turning over the other 50% of health-care to the government could fix or even improve the current costs crisis? Successful reform will only occur by utilizing free market forces to promote a more consumer oriented payer system and to increase competition. As discussed numerous times on these pages, the components of successful reform should include promoting Health Savings Accounts, equalizing the tax treatment of privately purchased health-care insurance with that of employer provided insurance, allowing purchase of insurance across state lines, decreasing the number of mandated benefits, and allowing insurance companies to appropriately assess the risk of utilization of health-care services in premium pricing.
One final point, after the “health-care summit” President Obama is calling on Congress to find common ground and get health-care reform done. Yet, the 2 alternative positions, expanding a failing system to include the uninsured and those with pre-existing medical condition or fundamentally restructuring the system to curb accelerating costs, can not be reconciled to a middle ground compromise. Controlled by the far left ideologues, the Democratic majority will not accept the premise that first costs must be controlled and that successful cost control will depend on utilizing free market forces, not bigger government programs. For the sake of our children and country, we must hope the Republican minority does not compromise from that premise.
The escalating health-care costs have alarming implications for the Federal Budget. The 2009 Medicare Trustees Reports estimates that the projected unfunded liability (the difference between costs of the benefits promised and the projected revenue from dedicated Medicare taxes and Medicare premiums) is $89 trillion dollars. This gap can only be closed with either significant benefits cuts, significant tax increases or both. A tax solution alone would require total payroll taxes to climb to 37% to meet the retirement promises (Medicare and Social Security (1/5th of the Medicare liability)) made to the young people who today are entering the work force.
If payroll taxes don’t rise to cover the deficit, general tax revenues would need to be transferred to cover the shortfall. Currently 13% of Federal tax revenues are spent to cover the Medicare and Social Security deficits. That percentage is projected to grow to 27% by 2020 and 49% by 2030. By 2050, Medicare, Medicaid, and Social Security will consume the entire budget on the current fiscal trajectory. As more and more of the budget flows to these entitlements, the other Federal Government services that now receive 87% of the Federal Budget e.g. defense, education, infrastructure maintenance, and the thousands of other federal program, will consequently be progressively and drastically scaled back with frightening and even existential ramifications.
The economic scale and scope of such a financial calamity makes consideration of additional benefits such as covering the uninsured or those with pre-existing medical conditions beside the point. Not that those problems should not be addressed but that they can not possibly be addressed on a sustainable basis until solving the fundamental issue of unsustainable health-care costs growth. Given that Federal and state governments now account for nearly 50% of all medical expenditure and given the financial status of those programs (Medicare, Medicaid, et al), can anyone reasonably believe that turning over the other 50% of health-care to the government could fix or even improve the current costs crisis? Successful reform will only occur by utilizing free market forces to promote a more consumer oriented payer system and to increase competition. As discussed numerous times on these pages, the components of successful reform should include promoting Health Savings Accounts, equalizing the tax treatment of privately purchased health-care insurance with that of employer provided insurance, allowing purchase of insurance across state lines, decreasing the number of mandated benefits, and allowing insurance companies to appropriately assess the risk of utilization of health-care services in premium pricing.
One final point, after the “health-care summit” President Obama is calling on Congress to find common ground and get health-care reform done. Yet, the 2 alternative positions, expanding a failing system to include the uninsured and those with pre-existing medical condition or fundamentally restructuring the system to curb accelerating costs, can not be reconciled to a middle ground compromise. Controlled by the far left ideologues, the Democratic majority will not accept the premise that first costs must be controlled and that successful cost control will depend on utilizing free market forces, not bigger government programs. For the sake of our children and country, we must hope the Republican minority does not compromise from that premise.
Monday, February 1, 2010
Health-Care Reform Would Help the Economy: If it is the Right Reform
Almost immediately after the historic Massachusetts Senate election, many Democrats began expressing second thoughts on continuing legislative efforts for health-care reform given the ongoing economic weakness and sustained unemployment. That stunning outcome forced Democrats, in an attempt to avoid a complete election debacle in November, to step back from their misguided progressive reform of health-care and announce they must instead work on improving the economy and unemployment. The Republicans were only too happy to agree with this legislative “pivot”, not so subtly implying that the Democrats have wasted a year working on health-care reform when they should have been addressing unemployment.
Once again, our career politicians in Washington have demonstrated that political maneuvering takes precedence over substantively addressing the serious challenges facing our citizenry. In fact, presenting these two legislative efforts as being mutually exclusive couldn’t be further from the truth. Very clearly, reform resulting in lower health-care costs and in substantial slowing of the growth of those costs would provide a major long term boost to the economy, including employment. Escalating health-care costs increasingly burden small businesses, large businesses, and families. For businesses that provide health-care employee benefits, higher costs for that insurance leave less capital to invest in the business and make those businesses less competitive in the global economy. Broader detrimental economic consequences of these costs were confirmed in a recent RAND corporation study that demonstrated among corporations that provide employee health-care benefits, increasing health-care costs result in greater unemployment and lower industrial output. Further economic damage occurs on the employee side with higher insurance costs resulting in lower wages, household spending, and saving.
Legislation for effective health-care reform would utilize free market principles to shift from a 3rd party payer system, a system that essentially creates unlimited health-care demand, to a more consumer oriented system. Effective legislation would also increase competition to decrease costs. Those same competitive forces would stimulate not only transparency and accountability with regard to costs but also, in turn, transparency and accountability with regard to quality of care. Further, lowering health-care costs would make health-care insurance more affordable for more businesses, families, and individuals thus making significant headway in decreasing the numbers of the uninsured. The components of successful reform should include promoting Health Savings Accounts, equalizing the tax treatment of privately purchased health-care insurance with that of employer provided insurance, allowing purchase of insurance across state lines, decreasing the number of mandated benefits, and allowing insurance companies to appropriately assess the risk of utilization of health-care services in premium pricing. This could all be done without creation of a single new government entity, without adding a single dollar of government spending, and without a single dollar of increased taxation.
In contrast, the “reform” put forth by the Democratic Congressional majority, (thankfully stopped dead in its tracks by the Massachusetts election), would have expanded the failed 3rd party payer system, increased insurance costs, expanded Federal and state provided health-care insurance that currently has trillions of dollars of unfunded liability, created massive new government bureaucracies, increased taxes, done immense harm to an already faltering economy, and pushed our country further down the road of the welfare state. (As an aside, understand that terms such “faltering economy” sound very academic and impersonal. In reality, the “faltering economy” means millions of our citizens agonize over their inability to provide for themselves and their families, and many others fear they may lose that ability.)
Still, don’t hold your breath waiting for Congress to enact common sense legislation, (utilizing the free market principles that made our country the global economic engine), to address the current health-care system ills and the related devastating effects on the economy. The Democratic Party, currently held hostage by the progressives, rejects such solutions outright because they do not conform to their ideological agenda. The Republican Party is more interested in undermining Democratic majority for their own political gain. And the career political establishment, both Republican and Democrat, would rather serve their own interests and special interests than that of the citizens of the republic they represent.
The great experiment in liberty that is our country and the resultant unprecedented national prosperity, freedom, and satisfaction is now mortally threatened simultaneously by the progressive left that seeks to abandon our very foundational principles and by the corrupt political establishment. For our sakes and for that of our posterity, we can not just sit back and allow our liberty to die (be killed). We must instruct ourselves and others with regard to the issues of the day including health-care reform, education reform, immigration reform, the National debt, etc. More importantly, we must reeducate ourselves and others on our country’s foundational principles and on that foundational understanding on the role of government. We must participate in the grass roots liberty loving political movement at the local, state, and national level. Find your local grass roots organizations. Learn about the candidates. Become a candidate. Support worthy candidates (local, state, and national), with time, effort, and money. This will take effort but without that effort our country, the country of our forbearers, many of whom sacrificed their very lives for the American way, will slip away.
Once again, our career politicians in Washington have demonstrated that political maneuvering takes precedence over substantively addressing the serious challenges facing our citizenry. In fact, presenting these two legislative efforts as being mutually exclusive couldn’t be further from the truth. Very clearly, reform resulting in lower health-care costs and in substantial slowing of the growth of those costs would provide a major long term boost to the economy, including employment. Escalating health-care costs increasingly burden small businesses, large businesses, and families. For businesses that provide health-care employee benefits, higher costs for that insurance leave less capital to invest in the business and make those businesses less competitive in the global economy. Broader detrimental economic consequences of these costs were confirmed in a recent RAND corporation study that demonstrated among corporations that provide employee health-care benefits, increasing health-care costs result in greater unemployment and lower industrial output. Further economic damage occurs on the employee side with higher insurance costs resulting in lower wages, household spending, and saving.
Legislation for effective health-care reform would utilize free market principles to shift from a 3rd party payer system, a system that essentially creates unlimited health-care demand, to a more consumer oriented system. Effective legislation would also increase competition to decrease costs. Those same competitive forces would stimulate not only transparency and accountability with regard to costs but also, in turn, transparency and accountability with regard to quality of care. Further, lowering health-care costs would make health-care insurance more affordable for more businesses, families, and individuals thus making significant headway in decreasing the numbers of the uninsured. The components of successful reform should include promoting Health Savings Accounts, equalizing the tax treatment of privately purchased health-care insurance with that of employer provided insurance, allowing purchase of insurance across state lines, decreasing the number of mandated benefits, and allowing insurance companies to appropriately assess the risk of utilization of health-care services in premium pricing. This could all be done without creation of a single new government entity, without adding a single dollar of government spending, and without a single dollar of increased taxation.
In contrast, the “reform” put forth by the Democratic Congressional majority, (thankfully stopped dead in its tracks by the Massachusetts election), would have expanded the failed 3rd party payer system, increased insurance costs, expanded Federal and state provided health-care insurance that currently has trillions of dollars of unfunded liability, created massive new government bureaucracies, increased taxes, done immense harm to an already faltering economy, and pushed our country further down the road of the welfare state. (As an aside, understand that terms such “faltering economy” sound very academic and impersonal. In reality, the “faltering economy” means millions of our citizens agonize over their inability to provide for themselves and their families, and many others fear they may lose that ability.)
Still, don’t hold your breath waiting for Congress to enact common sense legislation, (utilizing the free market principles that made our country the global economic engine), to address the current health-care system ills and the related devastating effects on the economy. The Democratic Party, currently held hostage by the progressives, rejects such solutions outright because they do not conform to their ideological agenda. The Republican Party is more interested in undermining Democratic majority for their own political gain. And the career political establishment, both Republican and Democrat, would rather serve their own interests and special interests than that of the citizens of the republic they represent.
The great experiment in liberty that is our country and the resultant unprecedented national prosperity, freedom, and satisfaction is now mortally threatened simultaneously by the progressive left that seeks to abandon our very foundational principles and by the corrupt political establishment. For our sakes and for that of our posterity, we can not just sit back and allow our liberty to die (be killed). We must instruct ourselves and others with regard to the issues of the day including health-care reform, education reform, immigration reform, the National debt, etc. More importantly, we must reeducate ourselves and others on our country’s foundational principles and on that foundational understanding on the role of government. We must participate in the grass roots liberty loving political movement at the local, state, and national level. Find your local grass roots organizations. Learn about the candidates. Become a candidate. Support worthy candidates (local, state, and national), with time, effort, and money. This will take effort but without that effort our country, the country of our forbearers, many of whom sacrificed their very lives for the American way, will slip away.
Monday, January 4, 2010
Because They are Self-Centered Not Right of Center
Fox News recently reported that the National Republican Congressional Committee fund raising has fallen well short of their projections and of their requirements for supporting national congressional campaigns (http://www.foxnews.com/politics/2010/01/03/gop-financial-struggles-jeopardize-house-election-bids/). The Republican leadership laments that this shortfall threatens potential significant Republican gains in the November 2010 elections.
Republican strategists doubtlessly are struggling to understand why donors are not stepping up when so much of the electorate clearly opposes President Obama’s and the Democratic Congressional majority’s initiatives regarding the economy, energy policy, environmental policy, and organized labor policy. Poll after poll has found that the majority of American voters consider themselves centrists or right of center and yet, those same people have little enthusiasm for the “conservative” Republican Party.
There is no mystery here. We the people have completely lost confidence in the political process. Both parties by their actions have demonstrated that purported espoused etiology clearly ranks below self interests and special interests. Congress’s wanton spending on pet earmarks, trips abroad, bureaucracy expansion, etc makes plain their complete disregard for our hard earned tax payer money. How are they any better than third world dictators who pillage their citizenry? In fact considering the current unfunded liability of Social Security, Medicare, and Medicaid, our politicians have far surpassed those totalitarian regimes in devising a system to take from those that have yet to be born.
At the end of this past year, while average Americans continued to struggle in this economy, Congress gave all federal employees a raise. In earlier days, we referred to government employees as public servants because historically compensation for public service lagged behind private sector positions. Now those “public servants” belong to unions and have salaries and benefits that exceed those of the private sector; even as their “employers” (local, state and Federal governments) fall further and further into debt.
We desperately need to return to those traditional American free market principles, personal freedoms, and values that made our great land the global economic powerhouse and bastion of freedom. If we do not, our country’s and our childrens' futures will continue to slide down the slippery slope to European style socialism, which can only result in economic insecurity, national and global insecurity, and individual dependency and unhappiness. The Republican Party must stop paying lip service to those principles, freedoms, and values but rather incorporate them in legislation to address the significant challenges facing out country. Yet this can not occur until the Republican establishment first regains our trust and reforms the political process by working in earnest for term limits, fiscally responsible stewardship of taxpayer (present and future) monies, and absolute transparency and accountability in government.
Republican strategists doubtlessly are struggling to understand why donors are not stepping up when so much of the electorate clearly opposes President Obama’s and the Democratic Congressional majority’s initiatives regarding the economy, energy policy, environmental policy, and organized labor policy. Poll after poll has found that the majority of American voters consider themselves centrists or right of center and yet, those same people have little enthusiasm for the “conservative” Republican Party.
There is no mystery here. We the people have completely lost confidence in the political process. Both parties by their actions have demonstrated that purported espoused etiology clearly ranks below self interests and special interests. Congress’s wanton spending on pet earmarks, trips abroad, bureaucracy expansion, etc makes plain their complete disregard for our hard earned tax payer money. How are they any better than third world dictators who pillage their citizenry? In fact considering the current unfunded liability of Social Security, Medicare, and Medicaid, our politicians have far surpassed those totalitarian regimes in devising a system to take from those that have yet to be born.
At the end of this past year, while average Americans continued to struggle in this economy, Congress gave all federal employees a raise. In earlier days, we referred to government employees as public servants because historically compensation for public service lagged behind private sector positions. Now those “public servants” belong to unions and have salaries and benefits that exceed those of the private sector; even as their “employers” (local, state and Federal governments) fall further and further into debt.
We desperately need to return to those traditional American free market principles, personal freedoms, and values that made our great land the global economic powerhouse and bastion of freedom. If we do not, our country’s and our childrens' futures will continue to slide down the slippery slope to European style socialism, which can only result in economic insecurity, national and global insecurity, and individual dependency and unhappiness. The Republican Party must stop paying lip service to those principles, freedoms, and values but rather incorporate them in legislation to address the significant challenges facing out country. Yet this can not occur until the Republican establishment first regains our trust and reforms the political process by working in earnest for term limits, fiscally responsible stewardship of taxpayer (present and future) monies, and absolute transparency and accountability in government.
Wednesday, December 9, 2009
Fixing the Economy – The Hard (Impossible) Way
President Obama recently convened a jobs summit purportedly being “open to every demonstrable good idea to create jobs” as our economy continues to struggle in the throes of the worst recession since the Great Depression. Unemployment stands at 10% but including the underemployed (those who can only find part-time work) and those who have given up looking for work increases that number to 17%. There are also many persons who presently have jobs but legitimately worry they could lose their present employment and many who had lost their job and subsequently have found new work but at significantly lower pay. Lastly as consumer confidence continues to fall (recently to a 26-year low), ongoing depressed consumer spending further restrains the economy, putting more pressure on business hiring.
Small businesses based in our free market system have been our nation’s primary employer and the source of our economy’s vitality. It would stand to reason that any reasonable effort to stimulate the economy should be expected to promote a healthy small business environment; yet, President Obama and the Democrat Congressional majority have selected the hard (impossible) way to fix the economy – by making the small business environment more difficult.
The taxpayer bailout of the big banks and ongoing Federal monetary policy has resulted in record Wall Street profits and in severely restricted small business credit. The trillion dollar taxpayer stimulus package has largely been a failure. Despite appropriating this huge sum out of the private economy (present and future), unemployment has increased; although we are told that more jobs would have been lost if not for the stimulus package. The jobs stimulated by road improvement projects are now disappearing as those projects and funding have been completed. The taxpayer money to the states to support salaries and to pay obligations similarly has dried up and many states remain in critical financial condition.
Cap and trade energy legislation that would, by the administration’s own admission, result in higher energy costs to families and businesses and also push jobs overseas has mercifully stalled in the Senate. However, just this week, the EPA announced its intention to designate CO2 as a harmful emission and regulate it as such which will result in the same economic harm inherent in the cap and trade legislation.
Perhaps worst of all, current health-care “reform” proposals in the Democrat controlled Congress fail to substantively address the ever escalating cost of health-care insurance and the resultant financial stress of small businesses and families. Rather than reorienting the 3rd party payer system to a more consumer centered system by implementing common sense reform including expansion of Health Savings Accounts, decreased mandated policy benefits, and decreased insurance regulation so to allow national competition and national risk pools, President Obama and the congressional Democrats want to expand mandates, expand the third party payer system, and effectively decrease insurance carrier competition. This “reform” would not only significantly increase health-care costs for businesses and families (http://www.bcbs.com/news/plans/new-report-shows-senate-bill-would-increase-healthcare-costs-for-louisianians.html) but would impose new taxes on those businesses and families.
Apparently “every demonstrable good idea” must conform to the left’s big government and green ideology. Unfortunately, those “good ideas” can only exacerbate our difficult economic situation. These legislative initiatives would be laughable if they were not so harmful to the well being of so many.
The Democrat Senate leadership is pushing to pass their health-care reform bill by Christmas at all costs. We must act. We can each individually make a difference. Call your Senators and urge others to call http://www.conservativeusa.org/mega-cong.htm. Tell them to vote against the present bill. Tell them we need true patient centered reform that decreases costs to families and businesses; reform that decreases insurance regulation and increases competition; and reform that decreases government debt and government intrusion into our health-care.
Small businesses based in our free market system have been our nation’s primary employer and the source of our economy’s vitality. It would stand to reason that any reasonable effort to stimulate the economy should be expected to promote a healthy small business environment; yet, President Obama and the Democrat Congressional majority have selected the hard (impossible) way to fix the economy – by making the small business environment more difficult.
The taxpayer bailout of the big banks and ongoing Federal monetary policy has resulted in record Wall Street profits and in severely restricted small business credit. The trillion dollar taxpayer stimulus package has largely been a failure. Despite appropriating this huge sum out of the private economy (present and future), unemployment has increased; although we are told that more jobs would have been lost if not for the stimulus package. The jobs stimulated by road improvement projects are now disappearing as those projects and funding have been completed. The taxpayer money to the states to support salaries and to pay obligations similarly has dried up and many states remain in critical financial condition.
Cap and trade energy legislation that would, by the administration’s own admission, result in higher energy costs to families and businesses and also push jobs overseas has mercifully stalled in the Senate. However, just this week, the EPA announced its intention to designate CO2 as a harmful emission and regulate it as such which will result in the same economic harm inherent in the cap and trade legislation.
Perhaps worst of all, current health-care “reform” proposals in the Democrat controlled Congress fail to substantively address the ever escalating cost of health-care insurance and the resultant financial stress of small businesses and families. Rather than reorienting the 3rd party payer system to a more consumer centered system by implementing common sense reform including expansion of Health Savings Accounts, decreased mandated policy benefits, and decreased insurance regulation so to allow national competition and national risk pools, President Obama and the congressional Democrats want to expand mandates, expand the third party payer system, and effectively decrease insurance carrier competition. This “reform” would not only significantly increase health-care costs for businesses and families (http://www.bcbs.com/news/plans/new-report-shows-senate-bill-would-increase-healthcare-costs-for-louisianians.html) but would impose new taxes on those businesses and families.
Apparently “every demonstrable good idea” must conform to the left’s big government and green ideology. Unfortunately, those “good ideas” can only exacerbate our difficult economic situation. These legislative initiatives would be laughable if they were not so harmful to the well being of so many.
The Democrat Senate leadership is pushing to pass their health-care reform bill by Christmas at all costs. We must act. We can each individually make a difference. Call your Senators and urge others to call http://www.conservativeusa.org/mega-cong.htm. Tell them to vote against the present bill. Tell them we need true patient centered reform that decreases costs to families and businesses; reform that decreases insurance regulation and increases competition; and reform that decreases government debt and government intrusion into our health-care.
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