Beyond Peace (30 page)

Even the recent rise in health care costs has to be seen in perspective. Part of that rise is due to an explosion of administrative burdens, which in turn result partly from the growing pains of a rapidly expanding health insurance system, partly from bureaucratic requirements, and partly from the litigation explosion. One recent study showed that from 1968 to 1990, the average daily number of patients in American hospitals fell from 1,378,000 to 853,000, while the average number of administrative personnel rose from 435,100 to 1,221,600.

But more fundamentally, we spend more on health care today because we use more of it, we get more from it, and we use it longer. Even so, and even without the proposed “reforms,” the rate of increase in health care costs is already dramatically slowing. One reason is that inventors and innovators all across America are constantly coming up with new devices, new procedures, and new drugs that substitute for more costly older treatments.

Most people of the older generation in America grew up without health insurance. The costs of medical care were handled directly by doctors and patients. If patients could not pay for care, doctors provided it free. But one way or another, patients got care and doctors got by.

Now medical insurance is the norm, and some form of insurance coverage has become increasingly necessary. This is true in large measure because of the stunning advances in medical care. Medical technology has become infinitely more sophisticated and more effective, and this has raised its costs. But the fact that we spend more on health care now does not mean we pay more for the same service. In my own lifetime, the average life expectancy in America has increased by an astonishing 40 percent—from less than fifty-five years to more than seventy-five. We live longer and live better, in part because of the vast array of services and cures that have become available. They
cost money. In view of the alternatives, most of us would consider this money well spent. Give one hundred people a choice between today's medical care at today's prices and the medical care available in 1950 at 1950 prices, and hardly a one would willingly take the 1950 option.

Today hip replacements routinely take the place of wheelchairs. Diphtheria, typhoid, tuberculosis, have been all but eliminated. Antibiotics have reduced dread diseases to common nuisances. Microsurgery makes it possible to treat once-fatal aneurysms almost on an outpatient basis. These and hundreds of other medical miracles are the direct result of America's stunning advances in medical science. Those advances in turn are the direct result of our free-market system of incentives, risk, and reward. Take away the incentives and you dry up medical research and therefore medical advances.

The Clinton plan, all 1,342 impenetrable pages of it, is less a prescription for better health care than a blueprint for the takeover by the federal government of one seventh of the nation's economy. If enacted, it would represent the ultimate revenge of the 1960s generation.

The plan epitomizes the discredited notion that taking action against a problem requires introducing a massive network of new compulsions, bureaucracies, and government controls. It calls on America to do what we have been telling Boris Yeltsin not to do. If we go down that road we will destroy not only our health care system but the underpinnings of our free society.

Under the administration's plan, doctors would be forbidden by law to accept more than the bureaucratically prescribed payment for any service, and patients would be forbidden by law to pay any more. Good doctors and bad doctors would be paid the same amount for the same procedures. Assembly-line clinics would collect the same payments as would the most caring private practitioner. Americans would be denied their basic right to buy the health care they want, even if they are willing to pay for it. This is the medical equivalent of establishing fairness
in a basketball game by amputating the taller players' legs at the knees. This sort of mass-produced, compulsory universal conscription flies in the face of everything it means to live in a free society.

We have the world's best medical care because we have free markets in a free society. To throw that away in an orgy of politically correct egalitarianism would be a self-inflicted wound for which there would be no cure.

For the last four thousand years, whenever price controls have been tried, they have failed. Yet price controls are at the heart of the Clinton plan, together with compulsory conscription of every doctor and every patient into a government-controlled, government-directed, government-regulated system of medical care.

Any sensible reform of the nation's health care system must start with the patient, not with the government. The most powerful force inflating health care costs has been a system of insurance that removes the patient's own incentive to shop for value. We should increase, not diminish, the patient's role in choosing his own providers, his own level of service, his own balance between expenditures for health care and for other goods and services.

We should also seek to diminish, rather than increase, the burden health care places on employment costs. The administration's plan seeks to avoid having its costs labeled a tax increase by requiring a uniform high level of insurance coverage for all workers and requiring all employers to pay for it. This is the wrong way. It drastically increases the cost of job creation, and it drastically handicaps American goods in world markets.

The administration's plan would establish a vast new bureaucracy to run an industry whose cost exceeds $900 billion a year—three times the cost of Pentagon spending at the height of the Reagan buildup. Those who railed against waste and fraud in the Pentagon during the Cold War years apparently have no such fears when it comes to this vastly more expensive megamonster.
They should. The administration's plan would reduce the high quality of health care that most Americans now enjoy and stifle research and innovation in medicine without slowing down the soaring costs of health care for the economy as a whole. The payroll taxes the administration proposes in order to pay for the plan would cripple small business and increase unemployment in the most dynamic, entrepreneurial, and job-creating sector of our economy.

We need instead to control exploding medical costs primarily through market forces that will ensure that the quality of American medical care remains high. We should devise a system that includes greater emphasis on preventive care, sufficient public funding for health insurance for those who cannot otherwise afford it, and competition among both health care providers and insurance providers to keep down the cost of both. We also need to reform the perverse legal liability and medical-malpractice standards, which have sacrificed patient protection in favor of protecting the physician or hospital against staggeringly costly lawyer-instigated lawsuits.

Study after study has shown that government health care schemes end up costing more and delivering less. For example, the average cost of direct health care benefits, not including administrative costs, for a privately insured individual is $1,500; for a Medicaid patient, $3,300.

Bringing health care costs under control also requires behavioral changes on the public's part. Once again, we have to take more responsibility for ourselves. Dr. Roy Vagelos, the visionary chairman of Merck & Co., whose own dedication to medical research is legendary, argues that with better control of fewer than ten risk factors, we could prevent two thirds of all premature deaths. One factor he cites is inadequate prenatal care, responsible for the fact that five thousand low-birth-weight babies are born every week. Keeping just one of those babies alive can cost $1 million. Other risk factors include illegal drugs and alcohol, unused seat belts, and smoking. Cigarette
smoking alone, he points out, causes more death and illness than drugs, alcohol, automobile accidents, and AIDS combined, and adds at least $65 billion a year to our nation's health care bill.

Twenty-one years ago, I proposed to Congress comprehensive health care reform that included requiring employers to provide health insurance coverage for their employees, just as the government sets requirements for minimum wages, occupational health and safety, and Social Security participation. I also proposed a vigorous program of aid and encouragement to the establishment of health maintenance organizations, together with a requirement that HMO membership be made available to those employees who chose this form of coverage. As I put it then, in HMOs “the doctors' and hospitals' incomes are determined not by how much the patient is sick, but by how much he is well. HMOs thus have the strongest possible incentive for keeping well members from becoming ill and for curing sick members as quickly as possible.”

But I most emphatically did not, and would not, endorse a wholesale federal takeover of the nation's health care system. The insurance mandate on employers was far less financially burdensome then than it would be now that health care expenditures have increased more than tenfold. Employers would have been required to help pay only for their own employees, not for all the indigent in the entire community. Nor did my proposal contain anything remotely like the administration's schemes of government-created monopolies to control the insurance process, government-imposed limits on private health care spending, or a governmental body of absolute power to regulate what services can be provided. The financing and delivery reforms I proposed were portions of an overall program focused heavily on research and prevention, including health education, consumer safety, and accelerated technological advances, together with major efforts against such behavioral components of the health care burden as alcohol and drug abuse, drunk driving, and the social problems associated with the failed welfare system.

The Clinton plan, by contrast, focuses less on improving health care delivery than it does on centralizing health care control. Our program was about health. The Clinton program gives every indication of being about power.

For years American education has been on a downward spiral. Reading standards have declined significantly among American children of all classes and backgrounds, and recent surveys indicate that ninety million Americans cannot read adequately. Over 25 percent of Americans fail to graduate from high school. This compares with only 3 percent in Japan. In Russia, with all its problems, 95 percent of its workforce have the equivalent of a high school education. President Bush's goal of making American students first in the world in math and science by the year 2000 still looks, on present performance, like a distant dream.

If America's public schools are to do their job, they must again be civilized places of learning rather than free-fire zones. Discipline in the classroom is fundamental if learning is to be possible. Beyond that, personal, social, and intellectual discipline are all key elements of learning itself. Yet for decades, many if not most of our public schools have been progressively abandoning the trust that parents and communities have placed in them, giving up on discipline and often yielding to mob rule.

This has been an integral part of the broader collapse ushered in by the 1960s. In the schools, its destructive impact has been especially severe. The damage done by school failure is long-term, and its effects are multiplied as the students who suffer its ravages go on to raise children of their own.

The notion that our schools are failing because we spend too little on them is patent nonsense. In 1990 the United States spent an average of $5,247 per student, two and a half times what we spent in 1960 and more than is spent by any other industrial democracy. Yet SAT scores have dropped nearly 80
points in the past three decades. Study after study has shown U.S. students falling behind those of the rest of the world in such critical disciplines as math and science.

As further evidence that money is not the problem, consider that New Jersey, which spends more per student than almost any other state, ranked thirty-ninth in SAT scores. Among the top ten states in SAT scores, only Wisconsin was among the top ten in per capita expenditures, while four were among the bottom ten.

In depressingly many respects, New York City has become a paradigm of liberal failure. Nowhere is this more glaringly evident than in the city's schools, which used to be among the nation's best but are now among its worst. For decades the city has been in the grip of its municipal unions. Financial corruption and the basest sort of ward politics have permeated the administration of its school system. Janitors' pay averages nearly $60,000, more than twice the starting pay of a teacher, while union work rules prescribe that floors have to be swept only every other day and mopped only three times a year. Even a cafeteria that serves five lunch shifts a day and is used as a classroom after that has to be mopped only once a week. The ratio of administrators to pupils in the city's public schools is ten times that in private schools. No wonder less than a third of the funds spent on the city's schools ever reaches the classroom. Crumbling buildings, rampant drug-dealing, and knives and guns in the classroom have become as much a part of the system as patronage scandals and the routine promotion of functional illiterates.

In New York and elsewhere, we will not return our schools to the standards America should expect until parents and communities demand it, and until we return to the old-fashioned notions that schools are there to educate, that education is important, that civilized behavior is essential to education, and that both behavioral and educational standards must be set and enforced.

To find the best ways to reform education, the first place to look is at the schools themselves. Not all have failed. Many have succeeded, some spectacularly. We should stop doing what demonstrably fails and do instead what demonstrably succeeds. We should not blame the teachers. It has to be a labor of love for anyone to teach in one of our crime-ridden, drug-infested urban schools.