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The Spectacle Blog

Time to Toss Health Care Industry Overboard

By Doug Bandow on 12.6.09 @ 8:31AM

The Obama administration learned an important lesson from the Clinton health care debacle: buy off the leading interest groups. So the administration offered whatever it took to win over the drugmakers, health insurers, and doctors. But these deals are now under attack in the Senate.

After all, like Willy Sutton, the Democrats want to go where the money is. And that is the providers. Reports the Washington Post:

Heading into a make-or-break week, Senate Democratic leaders are struggling to preserve the fragile support of interest groups for an overhaul of the nation's health-care system, even as lawmakers seek to change the carefully crafted provisions that brought the groups on board.

On the floor and behind closed doors, the Senate wrestled Saturday with amendments that would impose additional cost-control requirements on hospitals, doctors and drug companies, squeezing out savings beyond the considerable sums those groups had already volunteered to give up.

Of particular concern to seniors groups is an effort to strengthen a new independent board that would determine the future of Medicare, raising the possibility of cuts much deeper than those envisioned in the $848 billion health-care bill.

It's hard to pick a side when thieves fall out. The Democrats want to nationalize the medical system. The insurers, et al., want to make money on patients as the latter receive poorer care at higher cost. There isn't much moral difference among them. Yet Republicans have tended to side with industry out of habit, principle, or both.

But there is no reason to be nice to providers who are dedicated to sacrificing the rest of us for their own gain. Rather than working against legislation that will inevitably lead to government-imposed rationing, industry is aiding the process. As the Wall Street Journal noted about PhRMA, the pharmaceutical trade association:

So how has the industry responded? More or less as Lenin predicted. Big Pharma is now running ads against Joe Lieberman, saying his threat to torpedo the Senate bill could cause drug prices to rise by 20%. It is also funding a campaign that targets the fence-sitters Ben Nelson, Mary Landrieu and Blanche Lincoln.

In other words, the industry is trashing the very Senators who stand the best chance to rescue it from government control. Instead, the drug CEOs are making themselves complicit with the Washington mentality of seeing only the costs of medications, not benefits like longer lives or fewer hospitalizations. They are ensuring that they will always be a political target and making the extortion easier in the bargain.

The shame is that there be will fewer resources for the research and development that drives innovation, particularly for the smaller biotech companies that are the future of cutting-edge medicine. When it takes about a decade and a billion dollars to bring a new drug to market, a CEO of a smaller drug company told us recently, most firms are "living on the edge of extinction."

Almost certainly, the industry is being short-sighted. Even if the deals hold today, in a few years, as costs skyrocket, everyone will be looking for money to save. No one on the left will feel the need to respect past promises to guarantee industry profits. Whatever the Democrats fail to achieve today they will get tomorrow.

So Republicans should vote to give the providers supporting Obamacare their just desserts today. Rather than fighting to protect doctors, insurers, and drugmakers from increased regulation, the GOP should support any proposed restrictions. If industry wants the American people to suffer under government health care rationing, then the pain should be shared. Industry should give up its pound of flesh in the name of "reform" as well.

American health care is a mess and needs real reform. But not a government takeover. If industry is going to support rationing for the rest of us, it should be made to feel the full consequences of its policies.

View all comments (8) | Leave a comment

bluecollarbytes| 12.6.09 @ 11:40AM

How much of this acquiescence and deal-making on the part of 'big health care' is the result of seeing the political writing on the wall writ by the socialists currently in power? Republicans do not help the situation by agreeing to the underlying premise, that "health care is a complete mess". Perhaps things get out of hand with regard to spiraling costs, in part due to constantly improving technologies, techniques, and widened knowledge base.

If health care demand grows, it's only going to increase the costs, regardless of whether it stays a collection of private/public enterprises or whether we gain the "right" to be ruled over by politicians and govt. bureaucrats with regards to our health.

But I agree that IF we do go the ObamaCare route, with the help and political encouragement of 'Doctors, drug makers, & health care insurers', these special self-interests deserve whatever they get long term. Perhaps "we" do as well for having stuck America's leading leftist radical in the presidency. How many last-minute-decision moderates thought Obama's Hope was going to be a fun painless ride? We ain't seen nothin yet

martin j smith| 12.6.09 @ 12:43PM

This is about crony capitalism. The stick( fear of reprisals ) and carrots ( the illusion of being allowed to prosper ) . And it is fascism. So for me these entitiews such as the AMA,AARP,Big Pharma etc are aiding and abetting our nations downhill slide. They will in the end suffer as well.
What are needed are people of courage ( where the heck are they ? ) to stand up for the voters who are by the way the taxpayers. One more item: I like the idea of pushing the question: If its good for us ( the Government Run Health care then it is good for All who work for and in the government. This matter should be pushed in and out of capitol hill

Roy| 12.7.09 @ 5:50AM

Martin, under a fully government run system Congressmen will be more than happy to use it themselves. Just as did the Soviet hospitals, only the best of everything will be provided by the government run system for their government masters.

I am guessing the behavior of the special interests has been dictated by the hope that they will be eaten last.

Warren Piece| 12.7.09 @ 6:55AM

We should remember that even Adam Smith commented that when two business interests get t0gether, they conspire to have the the Crown edge out the competition.

What is truly disappointing as a "healthcare worker" is seeing so many of my colleagues positioning themselves to advance their careers through a new government run system--even though they know such a system will not be g00d for their patients in the long run.

hoads| 12.7.09 @ 8:33AM

The "pingbacks" are a nuisance. Can't you delete them? It looks like sabotage.

Gadema Korboi Quoquoi| 12.7.09 @ 2:59PM

Wether you are a Republican, a Democrat, or an Independent, Everyone's Primary Goal must be, to Contained our SkyRocketing Healthcare Spending. We must used some of the Stimulus Funds, to Build smart/Intelligeent Infrastructure Services for: Broadband, Smart Grids, Transportation Systems, and Healthcare IT. This Investment will Enabled New Jobs Creation and Economic Recovery.

Proper Deployment of Health Information Technology (HIT) Solutions and Training will Increased Productivity (i, e, medical data mining/warehousing, risks treatment, service delivery), Efficiency (i, e, medical errors, redundant and inappropriate care), and have a Costs Savings of around 20-30% of our Annual National Healthcare Expenditures (2008, $2.5 Trillions).

The Engine to Economic Growth in this 21st Century is "Broadband." We can start by, Deploying a pure Packet-based, All Optical/IP, Multi-Service National Transport Network Infrastructure, using Optical Ethernet throughout this National "Network of Networks." This can, then Connect All Optical Islands, Nationwide.

The Investment in this National "Network of Networks", in addition to New Jobs Creation and Economic Recovery, can also Serve as a Business Driver for: e-Healthcare, e-Commerce, e-Education, Energy Systems, Transportation Systems, Social Networking, Entertainment, etc.

This type of Investment is like the Investments that were made in the past, in Electrification of Rural Areas, and the National Transportation Inter-State Highways, which Increased Productivity, and our GDP.

Please See: www.gkquoquoi.blogspot.com for NHIN Summary Deployment Plan.

Gadema Korboi Quoquoi
President & CEO
COMPULINE INTERNATIONAL, INC.