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Thursday, March 06, 2008
David Strom :: Townhall.com Columnist
The Planning Fallacy
by David Strom
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Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


In comparing apples to apples you get a much different picture. Statistics like infant mortality and lifespan are poor measures of the health care system, because they measure many variables in one overall number (average life spans, for instance, are influenced by murder rates, car accidents, risk-taking behavior, diets, genetic variables, etc.). If you compare medical care to medical care, the U.S. system looks considerably better.

Consider cancer survival rates. If you examine five year survival rates in the United States versus Europe, a startling fact emerges: Americans have far higher 5-year survival rates from cancer. Among women the 5 year survival rate for Europeans is only about 90% of America’s. Among men the difference is stark indeed: European men have only 71% of the 5-year survival rate as American men. American health care starts to look pretty good.

And measurable outcomes are only one component of consumer satisfaction, which should be the goal of health care providers. Just as with other kinds of consumer products, it is impossible for a panel of experts to define what is “right” for consumers, no matter how precise their data or how sophisticated their models of what we “ought” to want. Government planners are no better equipped to manage and regulate our health care system than the supply and demand for automobiles.

Just as in other areas of life, there is no “one size fits all” model of health care provision.

There is no doubt that our current health care system needs reforms, largely due to the enormous government intervention already present in the system. Government directly pays for about 45% of health care expenditures, and influences the totality of spending through tax subsidies of third-party payer systems. These interventions distort our health care spending enormously.

The solution, though, is not more government intervention in the system, but less. The logic of consumer sovereignty which works in the automobile, housing, food, and consumer products sectors of our economy should be applied as well to the medical sector as well. Freer markets really are the most effective way to increase consumer satisfaction.

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About The Author

David Strom is the President of the Minnesota Free Market Institute. He hosts a weekly radio show on AM-1280 "The Patriot" in Minneapolis-St. Paul, available on podcast at Townhall.com.

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Free market dogma past its due date
The seductive aspect of any dogma is that for any problem, there is a solution - and a simple one at that.

Nothing could be more dogmatic -- or simplistic -- than free market libertarianism. Throughout history, time and time again, we've witnessed the dangers and shortcomings of the unregulated free market, and time and time again we've been burned.

Just this week, Treasury Secretary Henry Paulson admitted that deregulation of the financial markets has failed us all. The following is from MarketWatch, published March 13, 2008:

"You know things are very very bad on Wall Street when a guy like Henry Paulson -- Treasury secretary, solid Republican, and former Goldman Sachs CEO -- joins the crowd calling for more regulation over the financial markets.

Paulson spared no one in his criticism Thursday of the excesses of deregulation that has now created the worst global financial crisis in a generation, threatening the health of the U.S. economy, the savings of millions of Americans, and the survival of some of the biggest financial institutions in the world. See full story.

Wall Street and Washington both failed big time, he said. Wall Street invented new ways to make money by selling securities so complicated that no one could really follow which shell the pea was under. Fortunes were made on the paper Wall Street sold.

At the same time, Washington's watchdogs were dozing, tranquilized by the false assurance that Wall Street would police its own ..."

I'll conclude with Albert Einstein's definition of insanity: "doing the same thing over and over again and expecting different results."

Proof that government causes high $$$$
All you have to do to see that less regulation and less government mandates in coverage works is to look at how the cost of lasik eye surgery and cosmetic surgery costs have decreased. In areas where government has not mandated insurance coverage- the costs continue to decline. Much like most of our technology- items that are popular, like PCs and Ipods and cell phones just continue to get better and cheaper.
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