Monday, December 08, 2003

Politics: Does Medicare Cover Context Dropping?

Cesar Conda, until recently Vice President Cheney’s top domestic policy aide, is going to bat for his old White House bosses by defending the Medicare bill. Like most Bush apologists, Conda insists we’re not seeing the virtue in a $400 billion expansion of a failed government program:
Conservatives have long had an uneasy relationship with health policy. Outside of their efforts to defeat "Hillary-care" and other Democratic initiatives to socialize our health-care system, the conservative movement rarely addresses health-care policy — a failure that has resulted in the issue being virtually monopolized by liberal Democrats in the eyes of both the media and voters.

The Medicare bill is not a perfect statement of conservative philosophy, to be sure. The cost is huge. But it does contain some good, meaningful, conservative policy reforms.

Conservatives will finally have an alternative to liberal arguments that the only way to cover the uninsured is by government fiat. This bill dramatically expands Medical Savings Accounts, now renamed Health Savings Accounts (HSAs). These accounts are owned and funded by individuals, just like IRAs, and are used to pay nearly any medical expense — all in tax-free dollars.

* * * * *

By definition, conservatives believe a market is preferable to a monopoly — and for the first time, a government entitlement program is losing its monopoly. While the legislation rejected the broad idea of all-out competition pushed by House GOP conservatives, it does provide for limited competition starting in 2010. Conservatives would be wise to support and protect this reform, because you can be sure liberals will try to kill it before it is even born.
Conda’s playing with smoke and mirrors. Yes, the Medicare bill does provide for expansion of HSAs, but it’s not as “dramatic” as he wants us to believe. As for “limited competition,” the political reality is that competition is not forthcoming in most markets. In fact, many Republican legislators conditioned their votes for the Medicare bill on receiving assurances that their districts and states would be exempt from “limited” competition six years from now.

What really galls me, though, is how Conda ignores a major problem with current health policy—the continued antitrust persecution of physicians. If doctors were free to jointly contract with HMOs and other payers, some semblance of free market order would return to health care. Repealing the 1993 FTC-DOJ policy banning physicians from joint contracting (in essence, a ban on making money) would do more to help “competition” and consumers than anything in the current Medicare bill.

And Conda knows about the physician antitrust problem. How do I know? Because I briefed him on the issue personally several months ago when he was still at the White House. A mutual colleague arranged the meeting so I could brief Conda on recent antitrust activity. I spent a good deal of my briefing on the physician antitrust issue. I have no idea if he ever followed up on our conversation before he left the White House, but his one-note defense of the Medicare bill indicates that he probably never gave my concerns serious attention. That’s a shame, because if Conda had spoken up within the White House, the FTC might have been reined in a bit. Now we have an aggressive FTC hell-bent on bankrupting the nation’s physicians, and a President with his head in the sand on the true consequences of his own Medicare bill.

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