Curing Medicine of Government

The Benjamin Rush Society is modeled on the Federalist Society, which resists “a form of orthodox liberal ideology which advocates a centralized and uniform society” in law schools. The BRS, named after an American Founding Father who was also a physician, does the same in medical schools. It’s sad to think that such an organization needs to exist – but it does.
The Benjamin Rush Society promotes “the practice of medicine, free of government control.” BRS members, however, report that faculty and students in their medical schools betray a significant bias in favor of government action to solve the problems of access to health care. In order to understand better why so many doctors succumb to this fallacy, I attended a debate on the resolution, “that universal health care is the responsibility of the federal government,” hosted by the Columbia University chapter of the BRS on April 7.

Dr. Oliver Fein, MD, of Cornell University, spoke in favor of the resolution. A long-time advocate of single-payer health care, Dr. Fein’s support derives from his experience treating patients with private health insurance. He recited a series of tragedies, which he believes would have been avoided if private insurers had not been involved in paying for care: authorizations denied, or approved too late, or people losing health insurance because they lost their jobs, or denied coverage due to pre-existing conditions.

Dr. Fein would love nothing better than to get health insurers out of his office, and I agreed with him. He is an internist, not a specialist who usually delivers extremely expensive care. Like (too) many of his colleagues, Dr. Fein simply cannot envision a world where the government allows patients to pay their doctors directly. Unfortunately, he believes, incorrectly, that the status quo – where doctors experience almost every decision as micromanaged by health insurers – results from too little government intervention. The opposite is true.

The IRS excluded health benefits from taxable income during World War II, and this decision was later confirmed by legislation. With high post-war rates of personal income tax, one of the best ways for Americans and their employers to protect remuneration from taxation was to provide an increasing share of it as health benefits. Today, as a consequence, U.S. physicians earn only 10 percent of their incomes from patients. In 1950, this share was about 85 percent, and it was 40 percent as recently as 1980. Meanwhile, physicians’ real incomes from the practice of medicine have declined.

The government could opt to significantly reduce marginal rates of personal income tax, and/or excluded health-care spending from taxable income when individuals pay doctors directly – which tools like Health Savings Accounts or Health Reimbursement Arrangements partially achieve. Such action would doubtless eliminate insurance companies from many health-care transactions. Doctors would be directly accountable to their patients, a happy result.

Many doctors, unfortunately, resist such reform. I suspect that reliance on third-party payment serves an emotional purpose for many physicians. After all, doctors want to cure people who are sick. When a patient fails to recover from an injury or illness, the physician has a natural urge to blame a health insurer for denying payment. Substituting government power for private decision-making does not solve this emotional challenge.

Opposing the resolution, Dr. Brian Day, MD, a Canadian orthopedic surgeon, described his struggles against the provincial government of British Columbia. That government not only refused to pay for medically necessary surgeries but prohibited his patients from paying with their own after-tax dollars. Dr. Day cited the ban on private, voluntary payments as a sobering warning of government power over the practice of medicine.

The Benjamin Rush Society, on whose Board of Visitors I serve, will be hosting more debates this year in medical schools across the country, including Harvard, Stanford and the University of Chicago. Those debates will bring physicians and medical students a message of hope for a future of medicine free of undue government control.

John R. Graham is director of Health Care Studies at the San Francisco-based Pacific Research Institute

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

Scroll to Top