June 25, 2009 -- This week, President Obama lectured Americans who labored under the delusion that they liked their private health plans. When faced with the fact that, according to a recent New York Times/CBS News poll, 80 percent of people "are satisfied with the health insurance that they currently have," Obama said, "The only problem is that premiums have been doubling every nine years, going up three times faster than wages."
Problem? From 1997 to 2007, medical spending as a percent of disposable income on average, remained about the same according to the government's Bureau of Labor Statistics. True, people are paying more of the cost of their own care than they were five years ago. But then and now, a mosaic of Americans from every income, racial and ethnic group spending more on White Castle, Wii and cell phones then they do on health care.
Team Obama is flailing. Enraged that Americans are not in prostrate appreciation over the opportunity to fork over nearly $2 trillion and be herded into a Medicaid for the middle class, the president and his crew have harsh words for Americans who cling to their private plans.
And boy, does he believe we are stupid. He went on tell us that a public plan would not depend on any public subsidies. I guess he'll need a public option telethon, because $2 trillion doesn't count as a "public subsidy."
The "public option" proposal was supposed to be better at estimating and containing costs. But it came in over budget. In fact, government run health plans do not control costs; they just decide where to spend money when they expand. Medicare and Medicaid budgets are 10 times original predictions. Health care spending in every Western health care system with a public "option" has been growing faster since 2000 than it has in the United States.
Moreover, public "options" don't promote competition; they eliminate it. When Hugo Chavez created public "options" to produce oil and food it wasn't to compete with private businesses but to eliminate them.
Similarly, President Obama asks: "Why would it (a public plan) drive private insurance out of business?" Here's how. Medicare Advantage is a managed-care-run program that seniors -- mostly the chronically ill and minorities -- are choosing in droves. Medicare Advantage costs a bit more because it addresses the long term changes needed in health care: a trend toward personalized medicine, an emphasis on prevention, and the involvement of beneficiaries. Things that fee-for-service Medicare simply can't offer.
But the President sees Medicare Advantage only as another source subsidy... I mean revenue... for the public plan. So he plans to wipe it out by reducing what doctors and plans get paid. That's not competition, that's racketeering.
Similarly, the President's budget chief claims that 30 percent of health care could be eliminated to free up public plan dough without affecting health. In fact, data shows that the most of the variation in health care costs is a result of the undertreatment of illnesses such as diabetes. Analysis of this data by zip code suggests under treatment could be tied to being on Medicaid, another public "option." Driving millions of Americans into public plans could make matters worse.
There's a cheaper way to cover uninsured Americans and making health care more cost effective: Focus reform efforts on improving health, not finding money for the public plan.
First, the 47 million uninsured are not alike. Up to 10 million may be illegal immigrants, according to data gathered from the U.S. Census. Twelve million are eligible for Medicaid or SCHIP and don't even apply. Five million Americans who are without insurance make $70,000 or more per year. Seven million workers and dependents have declined employer coverage and remain uninsured.
The one-size-fits-all insurance model is too expensive and has little to do with health and wellness. People should be able to choose from plans of different types and prices that increase coverage as well as encourage well-being.
Illegal immigrants could buy low cost private health insurance. Tax credits, special rebates and discounts should reward healthy behavior as well as doctors and plans that encourage it. John Deere, Gulfstream and the city of Springfield, Ore. offer benefits tailored to long-term individual health goals instead of short-term cost containment goals.
We should fund a surge against health disparities where they exist, dramatically changing health care delivery to do so. This combination of health-centric policies would cover more people at a lower cost and target more resources on keeping people healthy.
When President Obama launched health care reform, improving health was at the heart of his effort. Now it's all about the money. Many private insurers, he said, spend too much time thinking about money instead of helping people.
The same could be said about President Obama who seems to forget that goal is not to save money for a public plan. It's to encourage doctors and patients to use the best tools to help us live longer and more productive lives.
Robert Goldberg, PhD, is president of The Center for Medicine in the Public Interest Advance and chairs The Critical Path Initiative for Personalized Medicine through the organization. He writes regularly for The American Spectator, the New York Post and The Weekly Standard.