The Public Policy
Rusthoven, Peter J.
"The Public Policy" commuters away from the suburban train stops. Without the car the millions who now live in suburb and exurb would be piled in on top of the urban tens of millions. We would have to build skyscraper...
...Indeed, according to a certain "Journal of Politics and the Arts," called The New Republic, Senator Kennedy wanted to ensure that no citizen would ever again be bothered by writing a check to a member of the medical profession...
...The automobile lost its market when the depression struck, and the businessman got all the blame for that...
...When one considers that Medicare and Medicaid (whose impact we considered earlier) increased the demand for such ambulatory health services by some 10 to 15 percent, one gets a better idea of the likely effects of national health insurance...
...This effort is not surprising, of course...
...when the wheat was no longer needed he still owed his shirt and his overalls for the land he had bought on credit...
...Although warnings to this effect from the rich and sinister American Medical Association were ignored by all sensitive and progressive men when the battles for these programs were won, it now seems unfortunately true that massive, unilateral...
...Perhaps a suggestion to state legislators that they retake their bar exams every five years would shed some light in this area, but don't count on it...
...All this is not to say that the agitation for federal health insurance is not well motivated...
...On this issue our men in Washington are following this pattern in fairly standard fashion, with some seventy-nine plans currently before Congress...
...Absolutely nothing...
...We live in what Walter Cronkite would undoubtedly call "an era of skyrocketing medical costs"—health costs have risen some five times faster than the general rate of inflation over the last decade or so—and in such situations it has become de rigueur for our elected representatives to devise various solutions, all of which seem to involve liberal use of the public purse...
...Thus, while this has hardly been an exhaustive survey (the federal government's general efforts to promote inflation, for example, have not even been touched upon', I think the point is clear that much of the responsibility for rising medical costs lies with governmental intervention...
...At least three of these have achieved some national attention...
...Imagine what New York City would be like if, in addition to accommodating its present eight million, it were forced to supply bedroom space within its confines for the people now living in Scarsdale, Bronxvil le, the Jersey Oranges, Connecticut's Fairfield County, and the western half of Long Island...
...The pols let the war start by their blunders, and when it was all over they made the encore of the war inevitable by saddling Germany with an unpayable debt at Versailles...
...Finally, we lose one more sphere of our lives to the firm control of the federal government...
...Instead, experience suggests that increasing outpatient coverage actually leads to a slight increase in demand for inpatient care...
...after all, they had the exuberance of a healthy animal...
...Finally, state governments have also made a contribution through their licensing practices—in this case with the active complicity of the AMA...
...In the midst of a significant shortage of doctors, hundreds of qualified foreign physicians eager to come to the United States are prevented from practicing medicine here because they cannot pass required medical exams...
...William B. Schwartz, chief physician at the Tufts-New England Medical Center in Boston...
...The chief differences between the two, predictably enough, involve the degree of government control and the extent of coverage...
...And lo and behold (to the surprise, perhaps, of sophisticates raised in the Galbraith school of economics) lowering supply also seems to have an impressive effect on prices...
...It would also yield longer delays in getting doctor's appointments, less time for the doctor to spend with each patient, and the loss of additional millions of man-hours consumed in unproductive waiting time...
...This, of course, would yield higher prices for either the individual or for Uncle Sam (which also means, eventually, higher prices for the individual...
...the push for such programs always is...
...But it was the politician who made 1929 a certainty...
...Rather than dealing with any particular plan now before Congress, the report focuses on the effects of two hypothetical programs—one involving full coverage for all health costs, the other calling for payment by the patient of up to 25 percent of his medical bills...
...Although the nation has been concerned with weightier matters recently, I think it is appropriate that we devote a few moments of current attention to this fairly sudden push for a national health insurance program...
...ALMOST LOST against the high drama of televised impeachment and resignation has been a growing (if not yet concerted) effort to make the federal government the nation's chief health insurer...
...Joseph P. Newhouse and Charles E. Phelps, senior-economists with Rand, and by Dr...
...The outstanding examples, of course, are the Medicare and Medicaid programs...
...The problem in medical care is a shortage in capacity in the delivery area, seriously aggravated by quantum jumps in demand brought on by government intermeddling...
...But before we take another step in our sometimes headlong rush to match the social sensitivity of our British and Swedish brethren, it would be good for Congress and the Administration to realize finally that the federal government cannot usher in the millennium by fiat...
...It was the Federal Reserve Bank, a political creation, that provided the credit that eventually toppled the market, The farmer went broke because he had mortgaged his acres to supply wheat for the politicians' war in Europe...
...Now as we know, the government has developed, under the tutelage of many wise and thoughtful scholars and politicians, a keen sense of personal responsibility about such matters...
...But Medicare and Medicaid are only part of the picture...
...I say it is important to discuss this now because eventually we will have have stopped worrying about the fate of Richard Nixon...
...The third program, sponsored by Louisiana Senator Russell Long with the support of Connecticut's Abraham Ribicoff, is considerably less ambitious in scope...
...We have been consuming their capital, in business and the arts, ever since the politicians decided the great years must not happen again...
...The twenties did roar a bit...
...The alternative program would involve increases of $3 to $7 billion annually spent on medical care while increasing the demand for outpatient services by at least 30 percent...
...We would have to build skyscraper apartments to reach the moon...
...but his less enlightened brother from the South, Representative Mills, insisted on some provision for co-insurance...
...But as one who grew up in the Coolidge years, let me assure a generation that knows the twenties only through the stereotypes of flapper, ganster, and bathtub gin that the decade was one of high and sober seriousness...
...It is worth noting, first of all, that much of the rise in medical costs since the early 1960s can be directly traced to previous government intervention in the delivery of health services...
...The Nixon plan would retain some role for private health insurance firms and would leave responsibility for a certain percentage of medical bills in the hands of individual citizens...
...When that happens, the whole pother about medical costs may well assume its proper role in the national dialogue, and intelligent discussion will be drowned in a sea of ponderous vacuities from TheNew York Times, stories in Time magazine completewith artsycraftsy cover, and no doubt an endless series of heart-rending features about poor souls bravely but unsuccessfully struggling to keep pace with rising health expenses...
...government-financed expansion of the demand side of the supply-demand curve really does yield higher prices...
...The theory that Wall Street's loans to the Allies got the United States into the war may have some weight, but war loans certainly didn't start the guns firing in 1914...
...The government has also contributed to the continued diversion of medical personnel from practice to research—important research, to be sure, but something of a misallocation of resources given the limited number of doctors...
...Both are expected to run in the $36 to $38 billion range, to be financed largely by increased taxes on employers...
...Accordingly, the Rand report informs us that "the increased demand would far exceed the current capacity of the delivery systern...
...Any medical student in the country can tell you the importance of federal grant money, and can also tell you that it is not being used to train general practitioners...
...To think that saying "Let the government pay for it" will lead to solutions in this area is not only naive, but promises to further exacerbate an already serious problem...
...The full coverage plan, for example, would increase the amounts spent on health care from $62 billion to somewhere between $70 and $88 billion a year, and would increase the demand for ambulatory health care services by at least 75 percent...
...As the late Phillip Willkie, son of the 1940 Presidential candidate, pointed out in a courageous fight on this issue in Indiana, in many rural areas there is only one doctor for over 3,000 people...
...In return for this, we get a government monopoly in the sale of health insurance, and a government monopsony in the purchase of health services...
...Moreover, as is always the case when the government stands to foot the bill, incentives to control costs and to provide only necessary services are gone—further increasing expenses for private patients...
...Accordingly, it is hardly surprising that the "solution" to this problem must lie in governmental- intervention on an even more massive scale, the probable results of which we may now proceed to consider...
...The price of this exercise in humanity is much lower—only about $9 billion...
...What did the businessman have to do with all this...
...any tribute the nostalgia hunters pay to them will be deserved...
...The results of this study are exactly what one would expect...
...You could say that the twenties were the most creative years of the century...
...Essentially, it involves an expansion of the Medicaid program to help the poor cover so-called "catastrophic" medical expenses—the major illness and/or operation that can strike suddenly and cost several thousands of dollars...
...Moreover, as the report points out, the increase in outpatient coverage would not even lead to a decrease in the demand for hospital services, as claimed by both President Nixon and Senator Kennedy...
...for lest anyone be fooled, "employer taxes" translate into lower paychecks and/or higher prices, every time...
...But so far, most states have not devised more realistic standards for examining foreign doctors, and another government contribution to rising medical costs persists...
...Think it over a bit and give the twenties credit for a genuine accomplishment in putting people on wheels...
...The two most ambitious ideas to date are the Kennedy-Mills bill, sponsored by the Senator from Massachusetts and the House Ways and Means chairman, and a proposal submitted by the White House...
...The Kennedy proposal would eschew such remnants of a capitalistic medical system to a much greater degree: private insurance companies would existonly to provide a standard form policy written by the government, and individuals would be responsible for a much smaller portion of their personal medical expenses...
...Before all this begins to happen on a grand scale, then, it would be a good idea to examine both a few of the causes of our present difficulties in the medical field, and some of the things we can expect from implementation of federal health insurance...
...This sounds eminently reasonable, until one considers that most American M.D.'s (who would have no language problem), could probably not pass their medical boards within a few years after beginning practice—for the exams are by their very nature a comprehensive, cramming-type exercise designed for one fresh out of medical school...
...We also get an increase in taxes...
...Fortunately, the Rand Corporation has provided a study of precisely this issue, written by Drs...
Vol. 8 • October 1974 • No. 1
