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Letter from the Editor: Health Care Debate

Paul Howard
Medical Progress Today
November 6, 2009

Health "reform" legislation continues to move forward in the House and Senate, with the President promising to sign a comprehensive bill before Christmas. However, Democrat sponsored bills have repeatedly failed to produce solutions to our healthcare woes that increase coverage, lower costs, and protect medical innovation. Instead, they've produced "reforms" that inflict heavy-handed price controls on medical goods and services, increase government spending, and create a slew of new taxes that will hit small businesses and the middle class in the midst of a severe recession.

While we recognize the pitfalls of the Democrats' bills, we haven't been content just to criticize. The scholars at the Manhattan Institute's Center for Medical Progress have worked tirelessly on producing empirical studies and op-eds that chart alternative solutions to the shortcomings of our healthcare system by empowering patients and building incentives for high quality, affordable health care.

Democrats' plans for national insurance reform—including community rating and guaranteed issue laws—have already been embraced by a handful of states like New York. A new report from CMP adjunct fellow Tar­ren Bragdon and Stephen Parente of the University of Minnesota examines the impact that these laws and other regulations have had on the individual insurance market in the Empire State and how market-based reforms could revive New York's highly regulated and expensive individual-insurance market—which has shrunk from 752,000 policyholders in 1994 to just 34,000 today. The authors' findings were summarized in a Wall Street Journal op-ed titled "Why Health Care Is So Expensive in New York". They advise national policymakers not to imitate New York's well-intentioned but costly mistakes.

Former CBO director and MI fellow, Douglas Holtz-Eakin exposes the hid­den costs contained within the Democrats healthcare bills. His Wall Street Jour­nal op-ed "The Baucus Bill Is a Tax Bill" shows how Congress plans to saddle the middle class with hundreds of billions in new taxes and fees to subsidize coverage for the uninsured. Holtz-Eakin has also written op-eds in Politico, on how to achieve real bi-partisan reform, and Roll Call, explaining why the Democrats' bills will not bend the cost curve. He's also written an MI proposal on how a "cost-first" approach to health care reform can fund future expansions of affordable, private health insurance.

CMP director Paul Howard takes a look at alternative health care models in Canada and Europe to explain to U.S. policymakers what not to do in their health reform efforts and explore why patient-centered care is our best chance for lowering costs and improving quality. He also exposes the trick and gimmicks Democrats have used to make their bills seem deficit neutral.

The Manhattan Institute's Center for Legal Policy released a new report, Trial Lawyers Inc. Update: Healthcare. This report examines the detrimental effect health related litigation has on healthcare costs and defensive medicine practices. An op-ed by Jim Copland explains why Democrats are opposed to including serious tort reform provisions in their healthcare bills.

Senior fellow David Gratzer has written a forthcoming broadside pamphlet in the tradition of Thomas Paine's Common Sense, "Why Obama's Government Takeover of Health Care Will Be A Disaster". Dr. Gratzer reveals how a government takeover of medicine will result in health care rationing and increased bureaucracy by discussing similar failed experiments in the United Kingdom and Canada.

Empirical Studies on health reform:

No advantages to the "Public Option": House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid have promised a public insurance "option" in Democrats' legislation that will compete with private health insurers. This CMP study shows that the costs of Medicare-style coverage are far higher than most analysts estimate—not including the high taxes needed to fund radical expansions of government health care entitlements.

Health Savings Accounts: A Model for Reform. This study shows that premiums for HSA-qualified policies are significantly lower than those for other types of plans—by about 10 percent to 40 percent. HSAs also cover preventive-care services (physicals, immunizations, and other recommended screenings) at basically the same rate as other types of insurance (like HMOs), making them a valuable and affordable tool for expanding insurance coverage.

Medical Innovation Reduces Disability...and Increases Longevity. So why do Democrats' want to punish companies that drive medical innovation? Democrats plans include billions in taxes on drug companies and diagnostic makers, the very companies that patients rely on to find new ways to prevent, treat and cure diseases like cancer and Alzheimer's. These two studies show that states that adopt newer medical innovations faster have smaller than expected increases in disability and greater than average gains in longevity.

Paul Howard is the managing editor of and director of the Center for Medical Progress at the Manhattan Institute.

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