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Jewish World Review March 3, 2010 18 Adar 5770 Alice in Health Care, Part III By Thomas Sowell http://www.JewishWorldReview.com | With all the controversies, charges, counter-charges and buzzwords swirling around the issue of medical care in the United States, there is a lot to be said for going back to square one and asking just what is the fundamental problem. The quality of the medical care itself is not the problem. Few — if any — countries can match American medical training, medical technology or the development of life-saving pharmaceutical drugs in the United States. Most countries with government-controlled medical care cannot come close to matching how fast an American can get medical treatment, particularly from specialists. Political hype is no reason to throw all that away. In fact, policies based on political hype over the years are what have gotten us into what is most wrong with medical care today — namely, the way it is paid for. Insurance companies or the government pay directly for most of the costs of most medical treatment in the United States. That is virtually a guarantee that more people will demand more medical treatment than they would if they were paying directly out of their own pockets, instead of paying indirectly in premiums and taxes. Since people who staff either insurance company bureaucracies or government bureaucracies have to be paid, this is not bringing down the cost of medical care, but adding to it. What also adds to the costs are politicians at both state and federal levels who mandate additional benefits to be paid for by insurance companies, thereby driving up the cost of insurance. If medical insurance simply covered risks — which is what insurance is all about — that would be far less expensive than covering completely predictable things like annual checkups. Far more people could afford medical insurance, thereby reducing the ranks of the uninsured. But all the political incentives are for politicians to create mandates forcing insurance companies to cover an ever increasing range of treatments, and thereby forcing those who buy insurance to pay ever higher premiums to cover the costs of these mandates. That way, politicians can play Santa Claus and make insurance companies play Scrooge. It is great political theater. Politicians who are pushing for a government-controlled medical care system say that it will "keep insurance companies honest." The very idea of politicians keeping other people honest ought to tell us what a farce this is. But if we keep buying it, they will keep selling it. FREE SUBSCRIPTION TO INFLUENTIAL NEWSLETTER Every weekday NewsAndOpinion.com publishes what many in the media and Washington consider "must-reading". HUNDREDS of columnists and cartoonists regularly appear. Sign up for the daily update. It's free. Just click here. One of the ways of reducing the costs of medical insurance would be to pass federal legislation putting an end to state regulation of insurance companies. That would instantly eliminate thousands of state mandates, which force insurance to cover everything from wigs to marriage counseling, depending on which special interests are influential in which states. It would also promote nationwide competition among insurance companies — and competition keeps prices down better than politicians will. Moreover, competition can bring down the costs behind the prices, in part by forcing less efficient insurance companies out of business. Another very real and very big cost behind the high prices for medical treatment are the many forms of expensive "defensive medicine" that doctors and hospitals have to practice, in order to avoid being sued by unscrupulous lawyers. Expensive and unnecessary tests and treatments cost even more than the multimillion dollar awards that clever lawyers can get from gullible juries. Tightening up the laws, so that junk science does not prevail in courts, would create some real savings in medical costs. But, since plaintiff's lawyers are big financial contributors to the Democratic Party, that is unlikely to happen during this administration. Finally, there are costs that are high because people want medical care in more comfortable surroundings — a private room rather than a bed in a ward, for example — and are willing to pay for that. This is more common among Americans. There is no reason for others to interfere with that, just because of a mindless mantra of "bringing down the cost of medical care" or class warfare rhetoric about "Cadillac health plans." Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Comment on JWR contributor Thomas Sowell's column by clicking here. Thomas Sowell Archives © 2006, Creators Syndicate

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