What you don’t hear about health care – Pacific Research Institute

What you don’t hear about health care

Health care reform will be front-and-center in the presidential debates. It’s a topic that’s full of complicated issues, so it can be hard to cut through all the rhetoric and figure out exactly what each candidate is proposing. So here’s the skinny on five questions that you’ll likely hear many times between now and November:

1) Should the government require businesses to offer health insurance?
Sen. Barack Obama has proposed requiring virtually all businesses to offer their employees health insurance or to pay a tax (probably about 7 percent of payroll) to finance government-sponsored insurance. This may sound like a good idea, but such action comes with many negative consequences.

For starters, it could add $12,000 to the cost of hiring a new worker with a family. That’s bad news for entry-level workers, for attracting new business, or for expanding an existing business. By one count, an employer health care mandate would eliminate 224,000 low-wage jobs.

Instead of forcing employers to offer insurance, lawmakers should work to lower premiums by increasing competition in the insurance market.

One way of doing so? Allowing people to buy insurance across state lines. There’s no reason a 25-year old man from New Jersey should have to pay six times as much for an insurance policy as an identical Kentuckian would pay for the same policy.

2) Can prescription drug importation bring down drug costs?
Both John McCain and Barack Obama seem to think so, pointing to lower prices in other countries. Unfortunately, they’re mistaken.

According to the Congressional Budget Office, foreign drug importation would save Americans just 1 percent over 10 years. That’s a minuscule amount – especially in light of the safety concerns associated with imported drugs.

Also, brand-name drugs are cheaper in foreign countries because their governments impose price controls. If politicians allow foreign drugs to enter the U.S. market, they’ll effectively be importing price controls.

3) Is government-sponsored comparative-effectiveness research a good idea?
To varying degrees, both Barack Obama and John McCain have expressed support for comparative-effectiveness studies to evaluate the relative merit of different medical treatments. But if the studies are government-funded, researchers would likely face pressure from cost-conscious officials to arrive at conclusions that lead to lower government spending.

Britain’s comparative-effectiveness agency, the National Institute for Health and Clinical Excellence, has done just that. Recently, the agency didn’t approve the arthritis drug abatacept – despite the fact that it’s one of the only drugs clinically proven to treat patients with severe rheumatoid arthritis.

4) Are the health care systems in Canada and Europe good models for America?
We often hear that other nations offer a utopia of free medical care for everyone. What we don’t hear is that universal health care coverage inevitably leads to long waiting lists, doctor shortages, and limited treatment options.

More than 825,000 Canadian citizens are currently on waiting lists for surgery and other treatments. In Britain, more than one million citizens are currently waiting for hospital admission.

In measuring the quality of a health care system, what really matters is how well it serves those who are sick. Here, America excels. A recent study in the British medical journal Lancet Oncology found that Americans have a higher five-year survival rate for 13 of the 16 most prominent cancers when compared to their European and Canadian counterparts.

5) How can we increase access to cutting-edge drugs?
Drugs made through biotechnology are beginning to offer hope to those with previously untreatable diseases. But these drugs can be extremely expensive. So some in Congress have proposed making it easier to bring copycat versions of biotech drugs to market.

Although it makes sense to create a regulatory approval pathway for these copycat drugs, lawmakers must make sure that they don’t put future innovation at risk.

Pipes is president and CEO of the 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.

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