New York Post, November 7, 2004

WHEN the stock market opened on Wednesday morning, prescription drug makers from the U.S. and Europe were full of helium.

Glaxo, Pfizer and AstraZeneca all saw their shares rally from 1 percent to 4 percent on the news that President Bush would serve a second term in office. The specter of world-wide price controls and an unprecedented margin squeeze seemed temporarily in remission.

So while America now enjoys a brief second honeymoon with Bush's re-election, it's time to get serious about fixing some of the problems stoking this country's health-care crisis.

You can't turn on the TV today without hearing about the rise of the uninsured, or the cruel mismanagement of HMOs. Doctors in many states have seen malpractice premiums against lawsuits climb so high they are nearly driven out of business. The process of getting Medicare reimbursements has come to resemble a criminal enterprise. And, all the while, some state politicians are authorizing the reimportation of prescription drugs from Canada to cover their own budget shortfalls and score political points with seniors.

It's hard to imagine how we got into such a web, which is where Sally Pipes comes in. In "Miracle Cure," a book that should be a well dog-eared desk reference for anyone trying to understand the irrationalities afflicting American health care, Pipes explains how the regulations and mandates that were enacted to fix the system have become its biggest problems.

The bottom line: Our latter-day obsession with the socialized system of Canada are a reflection of how much we already resemble them — not how little.

Consider, for example, that as of 2001 — even before the latest benefit expansions — the United States was already subsidizing roughly 56 percent of all health care in the country to the tune of $850 billion, either through government programs or through tax measures for employer-sponsored insurance. That federal intervention has distorted the insurance market, while mandates requiring small businesses to offer employee health-care at great expense actually swells the pool of the uninsured, rather than shrinking it.

Meanwhile, Americans don't need to look at Canada to see the perils of government-imposed rationing, Pipes explains. We can see the exact same forces playing out for old people and the poor who are enrolled in Medicare and Medicaid.

"Even without a drug benefit, Medicare will consume 20 percent of federal income-tax revenues in 2026," Pipes points out, while the incessant demagoguery on prescription—RDdrug companies' pricing would be inevitably subject to price controls — stifling the innovations that are making life longer — and more livable.

In a lively economy, public attention to health-care typically focuses on the quality of service offered (see HMO hysteria of the 1990s), while a slow economy spawns questions about the number of uninsured in America, much as we are seeing today. But the problems are related. All the qualities that we have abhorred in HMOs would be magnified in the sort of single-party payer system Democrats in Congress are now championing.

What is needed is more accountability to the consumer and less federal intrusion into our medicine cabinets and hospital rooms.

Many of the perverse incentives of the current third-party payer system could be addressed by treating health insurance more like car insurance — as a protection against catastrophic illness or injury — while allowing people to make their own rational decisions about regular tune-ups, without the bureaucratic fumbling that now attends every doctors appointment.

Instituting a more consumer-based system would free doctors from the series of hoops they must now jump through for every visit and return some sense of personal autonomy to patients, and even perhaps the realization that health is wealth.