What does an Obama presidency mean for health care?

The Examiner (Washington, D.C.), November 13, 2008

One of the many challenges President-elect Barack Obama will face is healthcare reform. It was a centerpiece of his campaign, and the American people expect action.

Healthcare reform proposals generally fall into two camps: Those that rely on government to expand access and hold prices down, and those that rely on market competition to lower prices and expand consumer choice.

Obama resides firmly in the first camp, so government-heavy reform seems inevitable. Sen. Ted Kennedy, D-Mass., said recently the time is right for “Medicare for All.” But the track record for state-run health care is abysmal.

Proponents of government-heavy reform believe that because the health care problem itself is massive and complex, we need an equally massive and complex solution. Only the government has the requisite scale, infrastructure, and power to deliver that solution, or so goes the thinking.

More than half of all health care provided in this country is already paid for by the government through Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP), and health insurance programs for veterans, Native Americans, and other specific populations.

To expand coverage, many suggest that lawmakers should just utilize these programs. Such a move, however, would bankrupt the country. These programs are already bloated and on weak financial footing.

Take Medicaid. Originally set up in 1965 as a safety net for the poor, Medicaid has grown into an enormous welfare program for the middle class as well, covering 53 million Americans. In other words, Medicaid already insures some 15 million more people than the 37 million estimated to be living in poverty, and almost 10 million more than Medicare. In 2006, individual states and the federal government paid out an estimated $338 billion for Medicaid patients.

Outlays for Medicaid amount to 22 percent of state spending and have surpassed even education as the biggest drain on state budgets. And that’s just the national average. In Medicaid-heavy states like Florida, the program is projected to consume nearly 60 percent of the state’s budget by 2015.

To expand coverage, Obama has also called for expanding SCHIP – the children’s health insurance program – to cover adults and all children. SCHIP was established with the goal of providing health insurance to children in households with too much income for Medicaid, but too little money to afford private coverage.

Today, the program covers about six million children. However, the funding formula gives states an incentive to add middle-income children and even adults to their SCHIP rolls. So in many places, the program has spiraled out of control.

In 14 states, adults are enrolled in SCHIP; nationwide, about 600,000 adults are covered. In six states, more SCHIP money is spent on adults than on kids. Meanwhile, the program has still failed to enroll almost two million children who qualify.

And in October, Hawaii ended the first universal program for children after just seven months. Costs skyrocketed as parents stopped paying for private coverage and switched to the government-funded plan.

Even the government healthcare offerings for veterans are sub-par. Thus far, the health program administered by the Department of Veterans Affairs (VA) has proved inadequate for the wounded veterans returning home from Iraq and Afghanistan. Better suited to the needs of much older veterans from World War II, Korea, and Vietnam, the VA is simply unable to react with the speed and efficiency needed to treat the injuries of modern warfare.

A claim now takes between 127 and 177 days to process – well above the private industry average of 89.5 days. An appeal takes a staggering 657 days. In House testimony last year, the Government Accountability Office (GAO) reported that the VA is near the breaking point.

With such failures in mind, it’s worth asking why Obama is interested in expanding these government programs. We simply cannot afford to add more people to the government rolls – particularly with a trillion-dollar budget deficit looming. And patients certainly can’t afford to languish in already sub-par government programs.

The president-elect has also trumpeted preventative care as central to his healthcare reforms. According to Obama, “the federal government and state and local governments play critical roles across the full range of disease prevention and health promotion activities.”

Legislators have been tripping over each other to lead the fight against public smoking, soft drink machines in public schools, and trans fats. In July of this year, for instance, the California legislature passed – and Gov. Arnold Schwarzenegger signed – a measure banning trans fats in restaurants and other public food facilities.

Such legislative actions seem to make sense. Healthcare costs would seemingly be lower for everyone if people took care of themselves from the get-go, rather than seeking crisis care when years of smoking, for instance, revealed their full consequences.

But history shows otherwise. To date, state-run programs to promote good health haven’t worked very well. In fact, they’ve often worsened the very problems they set out to solve and in the process driven up overall health care costs.

In 1994, the federal Nutrition Labeling and Education Act mandated that nutritional and caloric readouts be placed on all packaged foods. The idea was that if Americans knew the facts about what they were ingesting, they’d choose to eat healthier. Between 1995 and 2007, however, the percent of obese Americans increased by two-thirds.

Many “healthy living” programs are based on dishonest or even fraudulent interpretations of medical research. The Centers for Disease Control and Prevention (CDC) once attributed 400,000 deaths per year to obesity; a year later, other CDC and National Institutes of Health researchers arrived at a figure of 26,000 deaths per year. That’s a mighty big discrepancy.

Even though some government-funded prevention programs are able to effectively promote healthier living, they’re certainly no cure for high health costs.

One obvious reason is that healthier people live longer. Individuals who live into old age require some of the most expensive health care there is: late-life care. As people age, they become more susceptible to illnesses like osteoarthritis, prostate cancer, osteoporosis, and cognitive illnesses like Alzheimer’s disease. These diseases make the final years of a person’s life incredibly costly.

Americans are clearly antsy for change, and nowhere is that more apparent than in the healthcare debate. But the government-heavy changes that Barack Obama offers will not deliver the results that Americans need. Indeed, adding more government to the healthcare mix only promises to make the system more complicated and more expensive.

Sally C. Pipes is president and CEO of the Pacific Research Institute and author of “The Top 10 Myths of American Health Care.”