Obama plan stifles competition

Posted: Friday, February 27, 2009

ALEXANDRIA, Va. - President Obama's speech to Congress on Tuesday made it clear that he sees a much larger role for government in our $2.2 trillion health sector. It reaffirms his campaign and legislative proposals that pushed initiatives that expand existing government programs and create new taxpayer-funded health plans.

But this approach will stifle competition in the health sector and leave doctors and hospitals more beholden to the demands of politicians and government bureaucrats than to the needs of patients.

We have many problems to solve with health costs and health coverage in the United States, but more government is not the answer.

Medicine is a scientific process that is constantly evolving to create new treatments, new surgical techniques, and new drugs, devices and technologies. One major reason America leads the world in medical advances is because we value and reward this innovation.

Meanwhile, countries that have a much bigger role for government and that centralize decisions over health care and coverage stifle medical progress as doctors and hospitals respond, not to patients, but to the latest bureaucratic and political dictates.

In Britain, for example, politicians were getting pressure from constituents because hospital emergency rooms were so crowded that patients, some of whom were seriously ill, were left on gurneys in hallways awaiting care, sometimes for days. Politicians told the hospitals this had to stop and that they had to admit patients faster.

The response of some hospital administrators: Take the wheels off the gurneys because they then fit the technical definition of a "hospital bed." The patients were no better off, but the statistics looked better to the politicians.

Europe lags behind the United States in medical advances, largely because the government controls payments and often refuses to pay, especially when it comes to new medicines that are proved to extend and save lives.

The United States is veering down this same path. President Obama has signed legislation that creates a new federal health board in which 15 government officials will decide what medical treatments are good or bad. It's only a matter of time before payment policies follow their dictates.

The president also envisions creating a new government health insurance plan for working-age Americans. While this initially may seem appealing, it could actually be the tipping point in government dominance of our health sector.

This new government health insurance plan would "compete" with private plans. But it would have federal policing and price-control authority, would benefit from government subsidies, and could change the rules of the game to make sure it wins in the marketplace. Private insurance would not be able to compete on this uneven playing field, and soon Americans would have only the "choice" of this government plan.

A better idea is to provide a climate friendly to innovation in both health care and coverage and to offer new federal subsidies to help the uninsured purchase the private coverage of their choice. This could turn us around toward a properly functioning market in the health sector so that doctors and patients, rather than politicians and bureaucrats, control medical decisions.

While many problems remain, this decade has seen impressive advances in making care and coverage more affordable, including convenient and affordable walk-in retail health clinics, TelaDoc phone access to physicians, and innovative health insurance offerings coupled with wellness and prevention plans.

We need more of this innovation, and we need fewer bureaucratic programs that are slow, rigid, unresponsive and rule-driven. But if Congress and the Obama administration have their way and continue down the path toward greater centralized control over our health sector, we will lose the dynamic creativity of the marketplace that can respond to the needs and demands of consumers and get us to faster-better-cheaper medical care and coverage.

• Grace-Marie Turner is president and founder of the Galen Institute, which is funded in part by the pharmaceutical and medical industries.

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