Health Care Experts Spurn Industry Scheme

WASHINGTON (May 11, 2009) -- Representatives of five major health care trade associations Monday presented the White House with a proposal to reduce the growth of health care costs by up to $2.2 trillion over the next ten years.

However, an assessment by several skeptics of the trade associations’ proposal shows the proposal contains little in terms of specifics or enforcement mechanisms, and even less in terms of a workable strategy to lower health care costs.

Those looking for comment can quote directly from this media advisory or contact the sources directly.

“This is Big Government teaming up with Big Labor, Big Hospitals, Big Insurers, and Big Medicine to divvy up the health care pie between them. They will reduce costs at the expense of patients. The elderly should be especially concerned as rationing their care is far and away the easiest way to cut health care spending. All of these interest groups are eager to apply a ‘cost effectiveness’ standard that will deny care to people who are seen as a drain on the system.

“All these interest groups have proven to be ineffective at delivering value to the American people. They have created this system that is wasteful, inefficient, inconvenient, unaccountable, of questionable quality, and far too expensive. Every penny they spend comes from us, the American people, and is supposed to be used for our benefit. It is past time to let people control their own money and make their own decisions on the services they value.
Greg Scandlen
Director, Consumers for Health Care Choices at The Heartland Institute
greg@chcchoices.org
312-377-4000

“The offer to reduce health care expenditure by $2.2 trillion over the next decade is largely empty rhetoric.

“The health care industry is composed of 750,000 physicians in addition to tens of  thousands of hospitals and clinics, labs, etc.  The individual providers that make up the health care industry have no incentive to reduce their billed charges, because they are not competing on price. Moreover, the so-called health care industry representatives have no authority to force the individual providers to do so.

“We will never rein in health care expenditures until patients control more of their own health care dollars, and have the ability to decide between medical care and other uses for their money.

Devon Herrick, PhD
Senior Fellow and Health Care Economist, National Center for Policy Analysis
devon.herrick@ncpa.org 
(972) 386-6272

“I smell a rat.  Lobbyists never advocate less revenue for their members.  Ever.  If they did, they would be fired and replaced with new lobbyists. 

“ I suspect another motivation.  The industry wants universal coverage, because that means more customers and more revenue.  But universal coverage is expensive: it could cost $2 trillion itself.  If you tax your way to $2 trillion, the people revolt.  If you try to ‘free up’ the money by cutting payments to the industry, the industry revolts.  Sen. Baucus says he has reforms that will reduce health care spending over time, but the Congressional Budget Office won’t recognize those savings. 

“So the industry may simply be trying to help Sen. Baucus cook the books by signaling, ‘Hey CBO – we’ll make sure those reforms work!’ – with every intention of fighting those spending reductions later on.”

Michael Cannon
Director of Health Policy Studies, the Cato Institute
mcannon@cato.org
202-789-5200

“If these trade associations think they can stop the government takeover of health care by promising that they can be better Soviet-style central planners than the White House, they are wrong.
“Once the people see that they are proposing the mother of all cartels to deny access to health care in order to satisfy federal budgeting, they will be more reviled than ever. If these trade associations want to improve health care in America, they should advocate giving health-care dollars back to the people to serve their needs, not the government's needs."

John R. Graham
Director of Health Care Policy, Pacific Research Institute
jgraham@pacificresearch.org
415-989-0833

“Organized medicine, pharmaceutical and medical device manufacturers, and health insurers have surrendered to the Obama administration. They are no longer trying to maintain an independent and free health care system. Instead, they are vying for a seat at the table of national health care.

“Together they have agreed to abandon the patient, determining that their own corporate survival is more important than the survival of patient freedom, professional integrity and medical ethics.
“This organized industrial collusion with the Obama administration promises to lead to health care rationing and politics-based medicine—and higher administrative expenses. There will be more dollars directed into paperwork and reporting focused on command and control rationing strategies, and fewer dollars directed into real hands-on patient care.”

Twila Brase
President, Citizens’ Council on Health Care
twila@cchconline.org
651-646-8935

“While there is a very real possibility that the various interest groups now involved in the health care debate in Washington may come together to agree on further socialization of our nation's health care industry, the idea that this could save the nation $2 trillion or more -- while not seriously impacting the availability or quality of care -- is absurd.

“There are plenty of free market solutions out there that could accomplish significant savings while improving quality at the same time, most likely to the detriment of many of the aforementioned special interests. But a government-managed solution will inevitably result in worse care and greater rationing to achieve these ‘savings’ as those are the incentives in place and central planners lack the necessary information to improve efficiency.”

Paul J. Gessing
President, Rio Grande Foundation
pgessing@riograndefoundation.org
505-264-6090

For more information about The Heartland Institute, please contact Dan Miller at dmiller@heartland.org or Tammy Nash at tnash@heartland.org, or call 312/377-4000.