Editorial series, Part 4 of 5: What not to do to fix the health care system

Every special interest with its finger in the health care pie claims to have a "solution" to rising costs and the problem of the uninsured. Gov. Schwarzenegger has considered many of these ideas while shaping his own proposal, to be unveiled soon.

But some ideas are unworthy. The problem of many so-called health care "solutions" is that they only appear to fix the predicament from the perspective of special interests, while guaranteeing a worse mess for the rest of us. The law of unintended consequences thrives in the health care world. Consequently, we urge the governor to reject popular prescriptions that worsen the condition rather than cure it.

1. The governor should avoid any proposal that can be implemented only by imposing new taxes, which always seem to metastasize and never shrink. The current vogue among "reformers" is to tout Massachusetts' new universal health care law, which originally was advertised to cost "only" $125 million. But soon after its adoption this year, a bond measure revealed the cost to be $276 million instead
   
   
2. The governor recently complained about "hidden taxes"concealed in insurance premiums because medical costs for the uninsured are absorbed by those who buy insurance. We urge the governor not to attempt to solve this problem by imposing the not-so-hidden taxes inherent when government mandates are imposed on insurance companies.
   
   The Cato Institute's Michael F. Cannon and Michael Tanner noted (in "Healthy Competition: What's Holding Back Health Care and How to Free It") that government regulations amount to indirect taxes on consumers. It is the over-regulation of medical professionals, facilities, technologies and health insurance that price quality health care beyond the reach of consumers.
   
   
3. The governor should avoid like the plague any calls to require insurers to accept every applicant,regardless of risk. By forcing insurance companies to insure people they otherwise would not, several states devastated their markets in the 1990s. When this regulation was combined with restrictions on pricing premiums according to risk, it drove "numerous insurance carriers out of the market, and increased premiums beyond the reach of all but the wealthy," according to "What States Can Do to Reform Health Care," a recent book published by Pacific Research Institute.
   
   
4. This year the governor boasted about obtaining more than a half-billion dollars in "new federal fundingto provide greater access to health care for the unemployed," as if more federal funding is a solution to health care costs. At best, this "solution" merely shifted the obligation and cost from one taxing agency (the state) to another taxing agency (the federal government).
   
   Third-party spending is the principal culprit in the escalating price of health care. Dr. David Gratzer, author of "The Cure: How capitalism can save American health care," calls reliance on third-party spending, "a formula for more." Rather than rely on more federal – or state – taxes, the governor should break away from the Nanny State mindset and work to deregulate the industry so market forces can bring costs under control. As long as someone else pays, the people selling health care, and the people receiving health care always will demand more. When the third party paying for it is the government, there is even less incentive to say "No."
   
   
5. The governor should be wary of expanding any government-sponsored health insurance schemes, such as the widely available Healthy Families Program, funded with state and federal tax money and which is evolving into an entitlement for middle-class children whose families earn too much to qualify them for Medi-Cal. The Healthy Families Program, in fact, encourages families to drop their private health insurance and migrate to the publicly funded program, according to PRI. If the problem is that private companies have less and less incentive to insure private individuals, Schwarzenegger should not exacerbate this trend by creating new incentives for private individuals to shift onto the public dole.
   
   
6. Health care is a desirable commodity. But it's dangerous stuff to elevate it to a "right." Health care is a "right" in communist Cuba. And that's one reason Cuba's economy is abysmal. Health care is a "right" in socialized Canada. And that's the reason in Canada treatment is rationed, and people must wait months for surgery. These unpleasant facts are not coincidental. The governor would do well to take the advice of Richard Ralston, executive director of Americans for Free Choice in Medicine, and, "Do not create a huge category of patients who are entitled, as a supposed 'right,' to all the medical treatment they demand, with no co-payments or deductibles, and no responsibility to contribute a penny to their own health care."

As a rule of thumb, we urge the governor to avoid the mounting temptation to feed the insatiable appetite of the health care monster with new taxes, new costly mandates or by increasing reliance on third-party payers, particularly the government. Instead, we urge him to substitute personal choices and free-market alternatives.

Tuesday: We will detail some of those options.