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Press Release

    First, Do No Harm

    07/01/2003

    ©2003 Copley News Service, 7/1/2003

    Hippocrates, circa 400 B.C., is credited with creating the oath to which all doctors swore. The oath was subsequently named in his honor and survives to this day as the Hippocratic Oath. From this early date physicians were already organized into a guild, with regulations for training and the promotion of a professional ideal. To paraphrase from this oath, a doctor's responsibility is to "first, do no harm." Unfortunately for doctors, Congress does not abide by a similar oath, particularly in the area of health-care policy.

    Last Friday, the U.S. House of Representatives approved, by just a one-vote majority, 216-215, the largest expansion of Medicare since its creation as part of Lyndon Johnson's Great Society. At least the House also expanded Medical Savings Accounts under new names, Health Savings Accounts and Health Saving Security Accounts.

    Although 195 Democrats voted against the House measure, they did so not out of concerns for fiscal responsibility, but, to the contrary, because the expansion of Medicare was not large enough. Sen. Ted Kennedy described the Senate version of the same bill as a $400 billion "down payment." If the Senate version is signed into law, President Bush may have to announce during his next State of the Union address that the era of big government is back - big time.

    But Kennedy went even further. Instead of offering the prescription drug benefit to those in need, he energetically defended the right of Bill Gates, Donald Trump, Ted Kennedy and Jack Kemp to have their prescription drugs paid for by you, the American taxpayer. That's nonsense. What's worse, the White House's own fact sheet on Medicare reform states, "All seniors should have the option of a subsidized prescription drug benefit as part of modernized Medicare." The danger is that we get the prescription drug benefit without a modernized Medicare.

    Kennedy explained, "Bill Gates and Donald Trump pay into this program hundreds of millions of dollars in taxes. Because, as you well know, this (Medicare) is funded with general revenue - 65 percent into this program from general revenues - they contribute so much because they pay in taxes. They are paying so much more into it, this is a fly on the wall in terms of their advantage to get a prescription drug program."

    There is great reason to worry that whatever version of "reform" emerges from the conference committee, harm will be done, specifically to those whom the bill is intended to help. According to the Congressional Budget Office, over a third, roughly 37 percent, of senior citizens with employer-provided drug coverage will lose that coverage under either the Senate or the House bills.

    The problem with the current proposals is not only the $400 billion price tag.

    The greatest problem in rising health-care costs today is that the consumer is given incentive to overconsume health care. Additional subsidies will, of course, increase demand and increase inflationary pressure on health-care costs generally and prescription drugs specifically, exacerbating an already tenuous situation.

    John Goodman, president of the National Center for Policy Analysis, recently noted that "Some members of Congress apparently believe government should design the benefit package and let the private sector compete on the price of supplying those benefits. They have it exactly backward." The government, he added, "is much worse on designing benefits than it is on skimping on reimbursement amounts."

    While I am critical of the current plans on the table, I was entirely sympathetic to the president's original proposal, which was modeled on the Federal Employee Health Benefits Program. That plan, covering more than 9 million federal workers and retirees, allows workers to choose from a number of plans, all with prescription drug coverage. And, as Heritage's Robert Moffit points out, the "federal employee program is decentralized, not managed, claim-by-claim, by a cumbersome bureaucracy." While that program is far from perfect, it is a much better model than either plan going to conference today.

    The conference committee would be wise to ensure that all seniors have access to a basic safety-net health-care package for routine and preventive health care, which should include an affordable deductible and co-payment based on ability to pay combined with catastrophic health insurance that pays major expenses. This could be accomplished with the Health Savings Accounts and Health Saving Security Accounts provisions, expanded Medical Savings Accounts, which were included in the House version of the bill.

    Under the new savings account provisions, senior citizens' Medicare funds could be transferred to a qualified insurer, who would then deduct the cost of catastrophic insurance and deposit the rest of the money into the senior's personal HSA. While HSA plans may not be a panacea, they will do no harm, and will provide the introduction of market-oriented forces into the Medicare system, which is long overdue.