President Obama served notice on Tuesday night that he intends a massive rewrite of the laws governing health care in the United States. Unlike the stimulus bill, such legislation will do far more damage than just the waste of hundreds of billions of dollars. Obamacare will of course be extraordinarily expensive, but far worse, it will radically alter the health care delivery system in the U.S. If the Congress and the Administration get it wrong, the best health care system in history will quickly tailspin into mediocrity or worse.
There is no reason to believe that the incompetents in Congress can successfully overhaul the health care system, or even tinker with it. The free market has produced an extremely complicated but highly effective --though expensive-- delivery system staffed by professionals who are the envy of the world. The great institutions of medicine are mostly in the U.S. The most important research is done here, the most effective drugs and devices developed here.
Other democracies have tried to impose rules on health care delivery and the results are on display in Great Britain and Canada. There is every reason to believe, though, that the United States Congress would fail even to approach the efficiency of those nationalized systems because those systems were developed for smaller populations that were less diverse than ours at a time of far less complexity in the system to be regulated. There are millions more patients and thousands more providers in the U.S. than in either Britain or Canada, and the staggering intricacy of our system should humble even the biggest ego in D.C., though of course it doesn't.
There is no way the Congress could get this right. It lacks the basic competencies to do so. The best, most recent evidence for this vast competence gap is the unfolding story of the wreck of the Consumer Products Safety Improvements Act ("CPSIA") which passed last fall and entered into effect on February 10. If Congress does for health care what it just did for consumer safety, we are all in enormous, indeed life-threatening trouble.
The CPSIA was supposed to set levels for lead and phthalates in children's toys and other products, levels that could be enforced via testing.
What it has wrought is a near billion dollars in suddenly worthless goods, a vastly complicated and expensive testing regime, and a thousand unanswered questions. The number of businesses sideswiped or substantially damaged by this feel-good law is huge. I spent an hour interviewing a CPSIA expert on my program on Monday, Gary Wolensky of the law firm Snell & Wilmer, and since then the e-mails have been piling up from all sorts of business owners reeling from the law's incredibly destructive bite. One manufacturer of pens for back-to-school season has seen his entire business put on hold by retailers afraid to stock his products. The all-terrain vehicle industry which sells an incredible number of machines to the 12 and under market has been devastated as the CPSIA unknowingly reached out and forbade the sale of such vehicles since some of their components contain either lead or phthalates. Dozens of small manufacturers of baby products, from teething rings to quilts, are on the brink of ruin. A fast food franchisee is stuck with $30,000 of worthless childrens' meal toys. The list goes on and on.
Congress had no idea it was doing these things to these businesses and thousands of others when it passed the Act. Senator Amy Klobuchar, for example, still carries on her web site a declaration of her pride in pushing for the CPSIA. "I authored three provisions of the legislation," she wrote, "to eliminate lead in children's products; to establish mandatory federal safety standards for durable infant and toddler products such as high chairs and car safety seats; and to require toy manufacturers to stamp "batch numbers" on their products to help parents identify products if they have been recalled. The law also requires more vigorous testing of every children's product sold in our stores." There is no evidence that she is aware of the wreckage brought about by her high-mindedness.
And as the law only took effect on February 10, the first of the tidal wave of plaintiffs' law suits against manufacturers and retailers that haven't complied with the CPSIA's draconian provisions began to roll out just this week.
This wasn't a complicated statute --at least Congress and President Bush didn't think so. But the Congress and the president didn't think through the unintended consequences of the law. They were responding instead to the headlines about adulterated products from China, and rather than effectively push China to clean up its manufacturing processes, the CPSIA punishes innocent businesses across the land and destroys the values of hundreds of millions of dollars of safe, excellent products while creating incentives for lawsuits by strike-it-rich plaintiffs' lawyers acting in "the public interest."
If this is what the Congress does when it legislates on the very narrow issue of lead and phthalate levels in children's goods, just imagine the incredibly destructive impacts on the far more complicated world of American medicine.
The GOP, the AMA, every related industry and business, and health care consumers have to immediately begin to organize to bring pressure on Democrats in the House and the Senate to stop the rush towards ruinous "reform." Wasted money can always be made again. An economy can regrow, and surpluses reappear.
But a health care system once operated on by this Congress will be crippled beyond repair.
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