One of the Obama administration’s most bloated initiatives, universal healthcare, will also be one of the most disastrous public policies of the last hundred years. Universal healthcare as a policy initiative, if allowed to become a “reality”, will share a number of characteristics with what is now also known as the “Third Rail of American Politics” (Social Security). Social Security is heading towards bankruptcy, is not the same organization today as what it was when it was created by FDR, and is better as a theory than it actually is.
The first problem with universal healthcare will invariable be the enormity of the costs of providing universal healthcare. Funding, obviously, is necessary in order to sustain any program. In 2007, the United States Internal Revenue Service revenue collections totaled $2,691,537,557.000.00. Yes, that is over $2.5 trillion in tax revenue. That is a lot of money, but naturally, we cannot expect the entirety of America’s tax revenue to be spent solely on universal healthcare. We have national defense, the Interstate Highway System, Social Security (yes, that Social Security), and a whole plethora of other spending priorities. Way back in 2007 during the campaign, the Obama camp estimated that universal healthcare would cost somewhere between $50 and $65 billion a year. That does not seem like a very large amount, especially when you consider the federal government collects over $2.5 trillion a year. Also consider, however, that the Obama administration expects the 2009 budget deficit to be around $1.3 trillion. The deficit is more than half of what the IRS collects from taxpaying Americans every year. Therein lies the problem with universal healthcare: the Obama administration wants to pay for this monolithic program with money that does not exist. Then again, he does have the keys to the Bureau of Printing & Engraving, as well as the United States Mint, so it really is just an issue of printing and producing more money to have more money. As you know, it really is not that simple.
The Obama administration, however, insists it has a way to pay for universal healthcare. The funding will come from two places: 1) the Bush-era tax cuts for incomes over $250,000 will be left to expire in 2010, thus “loading” government coffers with tax dollars from the wealthy; and 2) raising taxes on inheritances of over $7 million. The first source, those with incomes over $250,000, comes from individuals that more-than-likely already have employer-funded healthcare (medical, dental, etc.). In other words, those making over $250,000 will be paying for a system they will not even use (despite already handing over at least 33% of their paychecks to Uncle Sam). The second source is much simpler to figure out. If your inheritance is over $7 million, get ready to write a bigger check to Uncle Sam. Estate taxes, also affectionately known as the “death tax”, is nothing more than a proposterous scheme that effectively taxes wealth twice (once when the income was earned by the individual that passed away, and a second time by the beneficiary of the inheritance). The problem with the death tax will be discussed at a later date, but the reality is that those that will not use the system will be the ones paying for it.
The United States imposes a progressive tax on taxable income. This is nothing new. In fact, in a way, it does make sense that those that make more should probably pay a little more in taxes. As noted in the April 24, 2009 edition of Simpleton of the Moment, however, a large portion of the American population does not pay taxes, but instead receives tax money when none was paid in. The payments ouf of the United States Treasury to those in the lower tax brackets are justified on the basis that without such payments, it would be impossible for all to enjoy the high standard of living we have here in the United States. By providing individuals in the lower tax brackets with cushy tax refunds (funded by the top 10% of American wage earners), everyone can drive a nice car, live in a respectable home, and seek quality nourishment, as the theory goes, of course.
Therein lies the question: why is healthcare absent from this equation? Those in the lower tax brackets receive money from the Treasury that they do not even pay in. Where is this money going? It naturally is not that simple, but there is a simple explanation as to why the average American, or the 47 million the Obama administration says do not have medical insurance, cannot afford quality healthcare. The problem is not how much the IRS collects in tax revenue. The problem is not even the quality of healthcare. The problem is the administrative side of healthcare, which includes the insurance and legal components that are ultimately responsible for the unjustifiably high cost of an emergency room visit. At some point in the past, the American public equated the technological advances in medicine with the idea that better technology means higher success rates. The technology today in America’s hospitals eclipses many times over what was used decades ago. So with new technology, well, there is less of a chance that John Smith on the operating room table will perish. There is extreme fault in this logic, and it is this logic that is the true culprit in the quest for affordable healthcare.
The idea that every surgery must be successful is–with no better term to describe it–ludicrous. There is a simple reason why those in the profession are called practitioners; they are practicing medicine. It is the practice of medicine, and not the perfection of medicine, that exists. With the belief that every medical procedure will be perfect came the need for malpractice insurance. Why do physician’s have malpractice insurance? When a procedure does not go well, they have to be able to cover the costs of the lawsuit that will invariably follow. That money, naturally (like your car insurance), comes from an insurance company. From being the practice of medicine, the system has evolved into the perfection of medicine, and if it is not, you better get ready to hear from my attorney. We as Americans have even provided the English lexicon with a term befitting of those that seek out such lawsuites: ambulance chasers.
So how do you fix healthcare? Well, the solution does not require an increase in the tax rates for the top 10% of American wage earners. It does not even require any tax increases for any American wage earner. The solution is three-fold:
- Eliminate lawsuits. If you cannot sue someone, the attorneys that prey on the system will need to find employment elsewhere. Ultimately, removing attorneys from healthcare will lower the cost of healthcare. At the same time, the waivers we sign before a procedure must be binding.
- Streamline healthcare. Require all hospitals, insurance companies, and practitioners to utilize a universal technology platform that will allow for a patient’s records and history to be accessible (and translatable) anywhere in the country (or the world).
- Perhaps the most important of the three, require better oversight by state licensing boards. Tolerance for malpractice should be near non-existent, compensation for malpractice should be solely borne by the physician, and physicians should not be allowed to “fund” compensation by increasing the cost of healthcare. If a physician has a repeated history of malpractice (a maximum of three instances), revoke his or her license permanently. That person obviously should be in another line of work.
The Obama administration likes to point out that cutting the budget deficit is a big priority. Tax increases are part of the plan. The problem, however, is not that people do not have enough money to pay for healthcare, but instead, that the cost of healthcare is simply too high. Healthcare, like the budget deficit, can be fixed without increasing taxes. It can be fixed by tackling the issues that actually cause the cost of healthcare to be so high. The Obama administration does not need to raise taxes on anyone to fix a problem that will not be fixed by feeding it more money. As the old adage goes, sometimes “less is more”. This is certainly one of those situations. The linchpin, however, is the American people. As the great Benjamin Franklin once noted, the only guarantees in life are death and taxes. Of those notable things missing from this short list: perfection in medicine.
Table 5. “Internal Revenue Gross Collections, by Type of Tax and State, Fiscal Year 2007.” Internal Revenue Service. Retrieved on April 25, 2009. www.irs.gov/pub/irs-soi/07db05co.xls [Excel spreadsheet].
Stolberg, Sheryl Gay. “President Emphasizes Discipline in Budgets.” The New York Times, April 25, 2009. www.nytimes.com/2009/04/26/us/politics/26address.html.
Politico Staff. “Obama-care 101: The president’s 8 principles.” Politico, February, 26, 2009. http://www.politico.com/news/stories/0209/19362.html.