Steve Buckstein’s remarks to the Dorchester Conference

Steve BucksteinSteve Buckstein, Cascade Senior Policy Analyst and founder, was asked to give a presentation before The Dorchester Conference, billed as America’s oldest annual political conference, which took place in Seaside, Oregon the weekend of March 3-5, 2006. Steve’s previous presentations included arguments in favor of school choice and Social Security personal accounts.

This year, Steve spoke in opposition to the following resolution, which was inspired by a proposal from former Oregon governor John Kitzhaber:

Resolved: Oregon shall change State law and seek a waiver of federal law to allow all “publicly supported” funds for health care coverage (Medicare, Medicaid and employer tax deductions) to be pooled under state control to provide universal basic health coverage for all Oregonians?

After discussion, Dorchester delegates voted to oppose the resolution by a vote of seven to 211.

Following are Steve’s prepared remarks:

Just say No to universal government health care

Presented to the Dorchester Conference
March 4, 2006

By Steve Buckstein
Cascade Policy Institute

Any of you who know me, or know Cascade Policy Institute, know that we have little in common with John Kitzhaber. But in this case, Doctor Kitzhaber is right — at least about half of the issue before you.

He’s diagnosed the illness correctly; he’s just chosen the wrong medicine to cure it.

He believes that the two big federal health care programs, Medicare and Medicaid, no longer make sense.

He warns that Medicaid has now become the single biggest item in most state budgets, and it’s squeezing out other programs.

He also believes that employer-based coverage no longer makes sense either.

He’s right on all three counts. But his solution — folding federal health dollars and employer tax deductions into one giant state run health care plan — is dead wrong.

Think about it. If Kitzhaber’s Oregon Health Plan had actually saved taxpayers money by rationing health care for the poor, then why is our Medicaid budget exploding like all other states?

Remember, the Oregon Health Plan was supposed to ration care by ranking treatments based on cost-effectiveness.

But when a team of Harvard medical researchers compared the Plan’s ranking of services with the state’s own cost-effectiveness estimates, it concluded that medical services were prioritized almost entirely without regard to cost-effectiveness.

What actually happened was that politics got in the way of medical science and economic analysis. Special interest groups weighed in and all the good theory went out the window. And that was when they just had Medicaid dollars to play with.

Imagine how many more political pressures will be involved if we give Oregon government control over Medicare dollars and employer tax deduction money as well. Why would we believe the results will turn out any better?

You’re talking about major new state administrative functions, expanded bureaucracy, and of course more people on PERS.

Let me ask you a simple question that may put this Resolution in perspective.

Why doesn’t your car insurance cover your weekly fill-ups at the pump, and regular oil changes? Gas and oil would be quote-unquote “free”, but your insurance premiums would go through the roof.

The overall cost of operating your car would increase substantially because of what’s called the third-party payer problem.

We have the third-party payer problem to a great extent in health care already. John Kitzhaber’s plan would only make it worse.

Critics argue that we need to pay for 100% of each others health care through government like the rest of the industrialized world. Health care would be free. Or would it? Cost is not just a function of price.

Other countries shift the cost of health care totally from patients to taxpayers. They ration care for everyone, partly through long waiting lines to get care.

The waiting lines in Canada were so long that the Canadian Supreme Court recently ruled they violate patients’ “liberty, safety and security.”

Some patients have to wait years for treatment. Even Canadians with potentially life-threatening heart conditions that require bypass surgery wait an average of five weeks for treatment.

When Bill Clinton experienced chest pain in 2004, the time between complaining to his doctor and his quadruple bypass surgery wasn’t five weeks, it was five days.

Of course, as a former President he might have received speedy treatment even under his wife’s ill-fated Hillary Care, or under Doctor Kitzhaber’s plan.

But the rest of us would be stuck in a government system run more for the bureaucrats than for the patients.

That’s what most Canadians have to put up with. Private insurance is illegal there, so unless you can afford to come to the United States for treatment, you’re stuck.

Luckily, the court decision encouraged private clinics to begin springing up all over the country, and Canadians are beginning to have some health care choices.

We need to introduce more health care choice and competition here too. Recently enacted Health Savings Accounts are a great step in the right direction. Federal employees already have a number of HSA choices.

Some of America’s biggest companies — including General Motors and Wal-Mart — have begun offering HSAs to their employees.

Rather than force such companies to spend a certain portion of their revenue on employee health care, we should remove the laws that make it difficult for individuals to purchase their own low-cost coverage.

One of those laws prohibits tax deductions for individual insurance policies. Rather than take away employer deductions, as the Kitzhaber plan would do, we should extend tax deductions to individual coverage.

In conclusion, I agree with John Kitzhaber that we should experiment. What we’ve got isn’t working.

But the experiments need to move toward less government involvement in health care, not more. I urge you to reject this Resolution.

Thank you.

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