Thursday, September 6, 2012

Fwd: qotd: McCanne on free markets in health care

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-------- Original Message --------
Subject: qotd: McCanne on free markets in health care
Date: Thu, 6 Sep 2012 08:02:30 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The Orange County Register
August 19, 2012
First, do no harm; second, nationalize
By Teryl Zarnow

(Dr. Don) McCanne, now 74, volunteers as a policy fellow for Physicians
for a National Health Program, where he was a past president. His group
favors a single-payer national health program often called "Improved
Medicare for All."

It's not socialized medicine, just socialized insurance.

I can't decide if the doctor is out of touch with reality or a prophet
in blue jeans.

Link for full article:


The Orange County Register
August 25, 2012
Health care cure is an Rx for economic ruin


Columnist Teryl Zarnow failed to do her homework. "First, do no harm;
second, nationalize" [Aug. 19] would be better titled, "No choice for
patients." What was presented as a "news" article was a one-sided
promotional piece for socialized medicine.

Perusing the online mission statement of "Physicians for a National
Health Care Program," one notes that "the program should be financed by
truly progressive taxation," and "views this campaign as part of the
campaign for social justice in the United States." Among its allied
groups are All Unions Committee for Single Payer Healthcare, Progressive
Democrats of America, and Healthcare-NOW!

The leadership, membership and network are particularly illustrative of
those wishing to "change" America, including Kim Gandy and Terry
O'Neill, past and present presidents of NOW, respectively; Medea
Benjamin of Code Pink San Francisco. The California Nurses Association
participates to "provide leadership in winning organized labor support
for HR676," which is the single-payer bill sponsored by John Conyers,
D-Mich., in the House of Representatives.

The smiling Dr. Don McCanne and his cadre of liberal progressives
speciously suggest that the "cure" for health care in America is another
entitlement to be paid for through the income tax system, as if this
country is not already $16 trillion in debt (not counting unfunded
liabilities.) The state of our entitlement system is completely ignored:
Social Security is operating in the red with more funds flowing out than
in for the first time in our nation's history, propped up by a "trust
fund" consisting of IOU's from the Treasury. Medicare will follow that
scenario sooner, rather than later, now that Obamacare has siphoned $716
billion in funding from Medicare over the next 10 years. All of this
while Dr. McCanne proposes to place yet another burden on the barely 50
percent of Americans who pay taxes, mostly to be borne on the backs of
the middle class, for that is where one finds the real wealth of this
country. McCanne's "cure" for health care is a prescription for the
financial collapse of this country.

Using Nobel Laureate Milton Friedman's logic, a medical system that
provides the best quality to the most must necessarily embrace
free-market principles, but the free market is absent in our health care
industry today. In 1945 Congress passed the McCarran-Ferguson Act, which
exempted the business of medical insurance from federal antitrust laws.

Thus insurance companies may freely conspire to price-fix without legal
repercussion, and consumers cannot readily compare prices for products
and services. Coupled with expensive and unnecessary tests defensively
prescribed to ward off meritless malpractice suits, our system is
certainly sick, but it is not incurable. Just as the computer evolved
from a slow, clunky but pricey desktop to a sleek, fast laptop at less
than one-fourth the price of the original 30 years ago, competition and
innovation can bring down the cost of health care, improve quality and
enhance affordability. A free-market prescription begins with the
embrace of free-market principles: repealing McCarran-Ferguson, posting
prices for services and products, competition across state lines, tort
reform and empowering the consumer.

The inevitable result of McCanne's alternative is all too evident in the
United Kingdom's single-payer system, where months-long waits for simple
surgeries are commonplace, and breast cancer patients were denied the
use of life-saving Tamoxifen until public outrage became so loud that
the government caved. How many lives were lost before this concession?
There was no choice for patients under this plan. There will be none
under Dr. McCanne's.


The Orange County Register
September 5, 2012
How the U.S. should fix health care

SAN JUAN CAPISTRANO, Don McCanne, M.D., Senior Health Policy Fellow,
Physicians for a National Health Program:

Letter-writer Anita Boyd ["Health care cure is an Rx for economic ruin,"
Aug, 23], in responding to Teryl Zarnow's column on me and my advocacy
for single-payer reform ["First, do no harm; second, nationalize," Aug.
19], stated, "Using Nobel Laureate Milton Friedman's logic, a medical
system that provides the best quality to the most must necessarily
embrace free-market principles, but the free market is absent in our
health-care industry today."

She then proposes a "free-market prescription." In doing so, she ignores
Nobel Laureate Kenneth Arrow's seminal work of a half century ago
demonstrating that health care fails competitive market preconditions,
and "when the market fails to achieve an optimal state, society will, to
some extent at least, recognize the gap and nonmarket social
institutions will arise attempting to bridge it."

In 2004, I was on a panel debate with Milton Friedman discussing
prescription drugs. In that debate he said, regarding the government's
defense of patents, "My initial reaction was to say, of course we want
to let the market completely work, and instead of having the government
defend the patent, let the patent owner defend it. But the more you look
at it, the more you see that's inconsistent." He also acknowledged the
importance of government in drug research. Even in Friedman's view, pure
free markets are an illusion.

Further, the oracle of free markets, Noble Laureate Friedrich A. Hayek,
in "The Road to Serfdom," wrote, "There is no reason why, in a society
which has reached the general level of wealth ours has, (the certainty
of a given minimum of sustenance) should not be guaranteed to all
without endangering general freedom; that is: some minimum of food,
shelter and clothing, sufficient to preserve health. Nor is there any
reason why the state should not help to organize a comprehensive system
of social insurance in providing for those common hazards of life
against which few can make adequate provision."

Every other wealthy nation provides comprehensive health care to
virtually everyone, and they do it at a per person cost that averages
close to half of what we spend. The secret is that they all use some
form of social insurance, acknowledging the fact that health care
markets inevitably fail for far too many with significant health care needs.

The Affordable Care Act of President Barack Obama supposedly relies on
market principles by expanding competition of private health plans.
Under the act, 30 million people will remain uninsured, inadequate
health plans with low actuarial values will become the new standard and
costs will continue to increase out of control. This is the most
expensive of all possible models of health care reform, and yet falls
miserably short of achieving a high-performance system. It is a mistake
to pretend that markets will work since free markets do not and cannot
possibly ever exist in health care, as the current reform effort once
again demonstrates.

As Herbert Stein would say, the current status cannot continue. It is
absolutely inevitable that eventually we will enact some form of social
insurance. Although there are several possible models, the most likely
for the United States will be our popular Medicare program, in an
improved version. It would cover everyone. It would rely on progressive
taxes to make it affordable based on ability to pay. It would improve
efficiency, especially by eliminating the profound administrative waste
that characterizes our current, fragmented, dysfunctional financing
system. It would remove private insurer intrusions, returning choice in
actual health care to the patient. Though a public social insurance
program, it would perpetuate our private health care delivery system
(i.e., it is not socialized medicine). Especially important is that it
would exercise its purchasing power as a public monopsony, finally
bending the cost curve to sustainable levels.

Much of the debate today includes distortions and exaggerations, driven
by ideology. In this information age, the true facts are readily
available. Instead of chasing after the ever-elusive fantasy of free
markets in health care, we should join together in supporting the
crafting of a bona fide social insurance program that works for all of
us, based on solid health policy science.

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