Obama cousin: “First, do no harm”

Maybe Barack Obama should have asked his family for some advice on reforming the health-care system.  His second cousin (once removed), Milton Wolf, practices medicine as a radiologist in Kansas, and seems to have the expertise missing from the massive government takeover Obama wants to push through Congress.  At the very least, Dr. Wolf could have reminded him of the Hippocratic Oath, as he does in the opening of his lengthy Washington Times essay:

“Primum nil nocere.”First, do no harm. This guiding principle is a bedrock of medical care. Sadly, those politicians who would rewrite our health care laws do not live in the same universe as do the doctors and health care professionals who must practice it.

Imagine if, like physicians, politicians were personally held to the incredibly high level of scrutiny that includes civil and financial liability for any unintended consequence of their decisions. Imagine if they were forced to spend tens of thousands of dollars each year on malpractice insurance and still faced the threat of multimillion-dollar lawsuits with every single decision they made. If so, a government takeover of health care would be the furthest thing from their minds.

Dr. Wolf then gets to the heart of the folly of the ObamaCare mess, which is the idea that one can control costs through controlling prices:

The justification for Obamacare has been to control costs, but the problem is there is little in Obamacare that will do that. Instead, there are provisions that will ration care and artificially set price. This is a confusion of costs and price.

As one example, consider the implications of Obamacare’s financial penalty aimed at your doctor if he seeks the expert care he has determined you need. If your doctor is in the top 10 percent of primary care physicians who refer patients to specialists most frequently – no matter how valid the reasons – he will face a 5 percent penalty on all their Medicare reimbursements for the entire year. This scheme is specifically designed to deny you the chance to see a specialist. Each year, the insidious nature of that arbitrary 10 percent rule will make things even worse as 100 percent of doctors try to stay off that list. Many doctors will try to avoid the sickest patients, and others will simply refuse to accept Medicare. Already, 42 percent of doctors have chosen that route, and it will get worse. Your mother’s shiny government-issued Medicare health card is meaningless without doctors who will accept it.

Obamacare will further diminish access to health care by lowering reimbursements for medical care without regard to the costs of that care. Price controls have failed spectacularly wherever they’ve been tried. They have turned neighborhoods into slums and have caused supply chains to dry up when producers can no longer profit from providing their goods. Remember the Carter-era gas lines? Medical care is not immune from this economic reality. We cannot hope that our best and brightest will pursue a career in medicine, setting aside years of their lives – for me, 13 years of school and training – to enter a field that might not even pay for the student loans it took to get there.

On that last point, though, Obama has an answer.  He’s nationalizing the student-loan program, which might get linked to an ObamaCare reconciliation bill in the Senate.  Obama has also pledged to allow students to default on those loans, at the expense of taxpayers.  Problem solved!

Otherwise, though, Wolf has the better argument.  Setting prices does not address costs; in fact, it curtails the only way providers have to recoup them.  Either providers have to reduce their expenses in bringing the product or service to market in relation to the artificial price, or they go out of business and the service or product gets more scarce.  That’s what happened in the 1970s when both Nixon and Carter used different forms of price and wage controls, and gas lines were just one result.  The American economy stagnated under the scarcity mentality that produced those strategies.

Some will argue that insurers set prices as well, but there are a couple of key differences.  Those prices are set by negotiation, not by Congressional fiat.  Doctors can choose whether to offer in-network prices, and to which networks they choose to belong.  Insurers compete for both patients and providers, and providers can benefit from joining one or multiple networks in order to gain access to more clients — but only if they get paid enough to make it worthwhile.  Once government sets those prices, there are no negotiations and no competition to correct abuses.

Besides, as Wolf points out, government already interferes in that relationship, too:

Insurance companies have been vilified for following the perverse rules that government has created for them. But it gets worse. The government, always knowing best, deploys insurance commissioners across the land to dictate what the insurance companies must provide, whether you want it or not, and each time, your premiums increase. Obamacare will make all of this worse, not better.

One of America’s founding principles is our trust in the people and their economic freedom to rule their own lives. We should decouple health insurance from employers and empower patients to be consumers once again. Allow them to determine the insurance plan that best meets their families’ needs and which company will provide it. This will unleash a wave of competition that will drive costs down in a way that price controls never have. Eliminate the artificial state boundary rules that protect insurance companies from true competition and watch as voters demand that their state insurance commissioners get the heck out of the way. Innovative companies will drive down costs similar to how Geico and Progressive have worked for automobile insurance. And it won’t cost taxpayers a trillion dollars in the process.

The cure for bad government intervention is not more of the same.  We need to encourage insurers to compete for business, providers to come to market, and consumers to get real pricing signals in order to determine their usage of the system.  Real reform would do just that; statist takeovers would ignore the problem and use the dissatisfaction as an excuse to seize that sector of the economy.

Update: I had Dr. Wolf’s first name incorrect; it’s Milton, not Myron. I’ve also clarified that Dr. Wolf is a second cousin once removed, and not a second cousin.

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