Clinton v. Stossel: The Future of Healthcare in America

By Carrie Lukas
Wednesday, September 19, 2007

As the saying goes, in politics, timing is everything. No doubt Senator Hillary Clinton’s campaign thought carefully about the ideal moment to unveil her proposal to revamp the nation’s healthcare system. Senator Clinton’s history of politically disastrous forays into healthcare policy made this release that much more politically delicate. Campaign strategists must have decided that, with summer behind us, the campaign is truly in full swing and people are paying attention—a perfect time to unveil a serious policy initiative.

But for more than 6 million people, the timing might have seemed a little off. That’s how many people watched John Stossel’s latest investigative report “Whose Body Is It Anyway? Sick in America” on ABC’s 20/20. Stossel’s primary foil was filmmaker Michael Moore (who trumpets the superiority of Cuba’s healthcare system in his documentary “Sicko”), but it may as well have been Senator Clinton.

Stossel highlights the inherent problems created by insurance and any third party payer system: people (and providers) have no idea how much treatments cost and have no motivation to spend resources efficiently. “What if you had grocery insurance? You wouldn’t care what things cost. Why buy hamburger. I’ll just buy steak. Why look for sales. Why use coupons. I’ll just buy everything. My insurance company’s paying.”

Governments have a way of addressing that problem of over-consumption: those offering “free” healthcare also ration services. As Stossel depicts with numerous examples from Canada and the United Kingdom, appointments with specialists, high end procedures, and everyday checkups may be free, but there are often month long waits to get those treatments.

Stossel suggests that the real cure for our healthcare problem is to change the fundamental dynamic within the system by putting individuals back in charge of their healthcare dollars with an incentive to use them wisely. He showcases Whole Foods, which, under the leadership of CEO John Mackey, switched to a system of health savings accounts. Employees have high deductible insurance plans and savings accounts with money they can use to help pay their healthcare costs. Unused money stays in their account, accruing interest, and is available for future use. Employees describe how their habits changed under this new system: suddenly they were asking doctor offices how much a visit costs and what kind of service they would receive during their appointment.

Stossel also highlights two areas where the market is at work since health insurance companies don’t typically cover these procedures: laser eye surgery and plastic surgery. In both instances, doctors are more responsive to patients needs, treatments have become more effective, and costs have gone down.

One who watched this program would recognize that Senator Clinton’s plan moves the country in the wrong direction. She proposes requiring that all individuals obtain insurance, and offers government subsidies to encourage them to do so. She would forbid insurance companies from denying coverage or “unfairly” pricing them out of the market. She would mandate that companies have to offer health insurance to employees or pay a penalty. In other words, she would further loosen the relationship between what we pay and what healthcare we consume. This would encourage over-consumption, higher prices, and greater inefficiency.

Of course, the plan would also come with a hefty price tag for taxpayers. Initial estimates are that the plan’s annual cost would be $110 billion per year. But if we have learned anything from the past about government healthcare programs, it’s that such estimates are often wrong and costs tend to increase much faster than expected.

Almost 15 years ago, voters soundly rejected First Lady Hillary Clinton’s vision of a nationalized healthcare system. Clinton’s current proposal may be less ambitious, but it is still a move toward greater government mandates and government control. Instead of just defeating this initiative, opponents should consider the lesson of this latest 20/20 report and offer an alternative vision: a true marketplace with individuals in control of their resources and their decisions.