Thursday, January 25, 2007

Schwarzenegger’s Health-Care Shakedown: The governor plans on having other states pay for his health-care program

Last week, California Gov. Arnold Schwarzenegger proposed to guarantee health insurance to all Californians — including many illegal immigrants. How would Gov. Schwarzenegger achieve this feat? To paraphrase another California governor: If it moves, he taxes it. If it still moves, he regulates it. And if it stops moving, he subsidizes it.

Or more precisely, YOU subsidize it. Gov. Schwarzenegger would fund nearly the entire plan through Medicaid. Under that program’s rules, roughly half the funding comes from California and half from the federal government — in other words, from taxpayers in other states. But, if you look closely at how the program will be funded, it becomes clear that Schwarzenegger wants to bend the rules so non-Californians would pay over three times as much as Californians would.

The governor’s thinly veiled shakedown is both dishonest and emblematic of what ails America’s health-care system. First, the taxes. The centerpiece of TerminatorCare is a requirement that every California resident purchase health insurance. Though many call this an “individual mandate,” that’s just a fancy term for a sort of tax. Instead of spending your money itself, the government forces you to spend your money according to its instructions. The result is the same: You end up with less money to use as you see fit.

The governor claims a mandate is necessary because the uninsured’s medical costs get shifted to everyone else; a mandate would ensure that all Californians have coverage. Yet the governor vastly overstates the free-rider problem, which is dwarfed by the amount of waste in our health-care system. And requiring people to purchase insurance doesn’t mean they’ll do it. California requires drivers to purchase auto insurance, yet one in four California drivers are uninsured.

The governor also wants to tax employers four percent of their payroll if they do not offer health benefits. If this proposal becomes law, we can expect to see California employers dropping coverage because the tax would be less than what many employers spend on health benefits.

As for regulation, the governor would require insurance companies to cover all applicants, regardless of health status. He also proposes to limit how much insurers can charge those with high expected-claims. Such regulations are supposed to make coverage more accessible for sicker individuals, yet on balance they tend to make coverage less accessible. In states such as New York and Washington, these regulations have increased insurance premiums, increased the number of uninsured, and caused insurers to flee the state.

And then there are the subsidies. The governor would increase spending on preventive care, reasoning that he can reduce health-care costs by catching diseases early. Yet when Stanford University economist Victor Fuchs polled health economists, only one out of nine agreed that greater spending on preventive care would even marginally reduce overall spending.

Schwarzenegger would expand government programs for the poor, including California’s version of Medicaid — i.e., Medi-Cal. In fact, he would expand these programs so much that they would cover many Californians who aren’t poor at all. Families of four making $60,000 per year — including illegal immigrants — would be eligible.

That would be dangerous: Such programs discourage people from climbing the economic ladder, because recipients lose benefits if their income rises. Expanding programs like these ensnares middle-class families in what experts call a “low-wage trap.” Such programs also tend to increase the cost of privately purchased medical care and insurance; expanding them would make private options even less affordable.

But the truly audacious part is that the governor wants non-Californians to pay for it all — or most of it, anyway — a fact that he and his advisors tried to disguise.

Here’s how it would work: The governor would increase Medi-Cal payments to doctors and hospitals by $2.2 billion, expecting Washington to chip in another $1.8 billion; that’s the way Medicaid works, with half of the costs being borne by the federal government. The governor would then tax $3.5 billion from the providers — i.e., from the doctors and hospitals, to whom payments had been increased by $2.2 billion. That means the state would recoup not just the $2.2 billion it originally paid the providers, but also $1.3 billion of what the federal government paid the providers. The proposed increase in payments to providers, which is subsequently revoked by taxes, is merely a ploy to get even more money from taxpayers in other states. It turns out that the governor wants to shake down non-Californians for over three-fourths of the costs of the increase.

If nothing else, the governor has highlighted what’s really wrong with America’s health-care system. Health care grows more expensive every year because everyone in the system is spending someone else’s money, and so no one spends responsibly. Even Medicaid encourages governors to make wild spending commitments because they can make taxpayers in other states pick up the tab.

The late Milton Friedman — a Nobel Prize-winning economist and philosophical mentor to Gov. Schwarzenegger — neatly summarized the problem with America’s health-care system: “nobody spends somebody else’s money as wisely or as frugally as he spends his own.”

Forcing more people to participate in this broken system is no solution. Health-care reformers need to change the incentives so that everyone starts acting responsibly. Thanks to Gov. Schwarzenegger, reformers now have a poster child.


Mother gives birth in toilet

Another great example of "Don't care" public hospitals. Third-world treatment in a First World country -- Australia

A mother says her baby daughter was born in a hospital toilet bowl and had to be rescued after staff ignored her screams for help. Kay, 24, was in the final stages of labour when she was rushed by ambulance to Monash Medical Centre on Tuesday last week. In a statement to the Herald Sun yesterday, the hospital said it regretted "the birth did not go according to plan".

At the hospital, the Mt Waverley mother of two was told to wait in a standard share room instead of being directed to a birthing suite, despite having contractions fewer than two minutes apart. "A midwife saw me when I came in and pressed on my stomach once. Nobody checked if I was dilated. I didn't even get offered a Panadol," Kay said. An hour after arriving, distressed and screaming in agony, she went to the toilet, where she gave birth to a girl.

Her husband Michael, who had become frantic, had hit an emergency buzzer in panic to try to get help, but he said none came in time so he kicked down the locked door and ran in, pulling the infant from the toilet bowl. Kay said she was terrified her daughter could have died, and described the ordeal as horrific. "I thought she could have been seriously hurt, or worse. If it wasn't for Michael coming to my aid, I don't know what the result would have been," Kay said. "It was the most traumatic thing we have had to go through. I would have thought it would have been one of the happiest times of our lives, but it was terrible."

Kay said Michael pressed the emergency buzzer three times, but no one responded until after a nearby caterer alerted medical staff. "When someone finally came, Michael asked why it took so long and they told him the buzzer didn't work," Kay said. "I was completely shocked. It is an emergency buzzer. This was an emergency."

But the director of nursing at Monash Medical Centre, Kym Forrest, said in a statement to the Herald Sun: "The buzzers were checked and both were working. The obstetrician and midwives were in fact alerted to the baby's arrival by the buzzer being sounded from Kay's room." Ms Forrest also denied the door had been kicked in. "It is a dual lock which can be opened from both sides and this was the way access was achieved," she said.

But Kay said the toilet cubicle, complete with broken door, "looked like a murder scene". "There was blood everywhere. I was screaming. It was just horrible," she said.

The couple are seeking a formal apology, but Ms Forrest said they had not lodged a formal complaint with the hospital. "We regret that Kay did not have the birth experience our midwives strive to provide to all the mums in their care," Ms Forrest said. "We are as disappointed as Kay and Michael that the birth of their second child did not go according to plan, but babies have a mind of their own sometimes."

Opposition health spokeswoman Helen Shardey called for the Government to investigate: "It is just lucky the baby was not seriously injured in this fiasco." A spokeswoman for Health Minister Bronwyn Pike said it was an operational matter for the hospital to deal with.



For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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